📖Ray Dalio
All Weather Valuation
Diversify across economic environments, not just assets.
Don't bet on any single economic scenario. Diversify your bets across different environments so you always have something working in your favor.
🏠 Everyday Analogy
📖 Core Interpretation
In All Weather Valuation, Ray Dalio focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：True diversification means being prepared for any scenario.
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❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
Navigating the Global Financial Crisis (2008)
Bridgewater’s ‘economic machine’ framework anticipated deleveraging and deflation. The firm reduced risk in equities and credit, increased quality sovereign bonds and some hedges.
✨ Outcome：Pure Alpha performed strongly in 2008, protecting client capital and demonstrating the power of model-driven thinking about the economy as a machine.
2
Bet on Falling Interest Rates (1982)
Dalio predicted recession and falling inflation, buying long-term US Treasuries when yields were historically high.
✨ Outcome：Bonds rallied sharply as rates fell; Bridgewater’s returns surged, reinforcing his principles-based macro approach.
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