The following originally appeared on Finbox.io
Most investors are well aware of the investing prowess of Raymond Dalio. He's the billionaire investor, hedge fund manager, and philanthropist that founded the largest hedge fund on Wall Street (Bridgewater). However, investors may not be aware that today Dalio released Principles, an expanded and revised edition of the manifesto he published in 2011.
To celebrate the new release, we wanted to discuss the original 2011 manifesto and also review Dalio's stocks reported in Bridgewater's recent Form 13F SEC filing to understand what he's investing in today.
The Original Principles
"Principles are ways of successfully dealing with reality to get what you want out of life."
With original Principles, the 123-page manifesto gave readers a glimpse into the billionaire's philosophies about living life and managing people and organizations.
According to the book's new website, the original Principles has been downloaded over three million times. You can download the old PDF of Principles here. In the text’s abstract he explains:
“Above all else, I want you to think for yourself—to decide 1) what you want, 2) what is true and 3) what to do about it. I want you to do that in a clear-headed thoughtful way, so that you get what you want. I wrote this book to help you do that.“
Principles is a required read for all Bridgewater employees which hints at how core he believes these guidelines are to their investment strategy and resulting performance. Soon, Principles will be available in print. It’s available on Amazon for pre-order and purchase.
"Truth, more precisely an accurate understanding of reality is the essential foundation for producing good results."
Ray Dalio also gave a recent TED talk that discussed how he converted his principles into a computer algorithm that now helps him make decisions:
Bridgewater's Latest Form 13F Filing
One of the better-kept secrets in investing is a form called the 13F-HR that all institutional investors who manage over $100 million in assets must submit to the SEC. In the Form 13F, managers have to disclose their holdings giving intelligent observers a sneak peek into their strategy and investments.
Last month, on August 10th, 2017 to be exact, Dalio's firm Bridgewater Associates filed their quarterly Form 13F regulatory filing. We reviewed the 13F filing to get a sneak peek at holdings in Bridgewater's massive portfolio.
Portfolio Overview and Statistics
Bridgewater's stock portfolio totals nearly $11 billion according to the latest filing.
Quarter-over-Quarter Turnover (QoQ Turnover) is a measure used to gauge the level of trading activity in a portfolio. QoQ Turnover is calculated by taking the lesser of the total value of new securities purchased or the total value of securities sold over the last quarter and dividing it by the total value of holdings.
Bridgewater's QoQ Turnover for the latest quarter was over 25%, so the firm appears to trade a significant percent of its portfolio each quarter.
Bridgewater's Largest Holdings
The Ideas section of finbox.io tracks top investors and trending investment themes. You can get the latest data on the holdings discussed below here. The following table summarizes Bridgewater's Largest Holdings reported in the last filing:
Ticker | Name | Holding ($mil) | % Of Portfolio |
---|---|---|---|
SWN | Southwestern Energy Company | 50.1 | 0.5% |
ESRX | Express Scripts Holding Company | 39.1 | 0.4% |
M | Macy's Inc | 35.7 | 0.3% |
INTC | Intel Corporation | 32.4 | 0.3% |
BBBY | Bed Bath & Beyond Inc. | 31.7 | 0.3% |
DVN | Devon Energy Corporation | 28.2 | 0.3% |
CHK | Chesapeake Energy Corporation | 26.1 | 0.2% |
Bridgewater's Top 7 Most Undervalued Holdings
To determine which stocks are trading below their intrinsic value, aka "fair value" we used the finbox.io Fair Value estimates. We also wanted to blend in some indication of which stocks might be ready to make a move up soon because they're popular with Wall Street analysts. We calculated an average using the finbox.io fair value upside and analyst upside to create a blended upside which we then used to rank the most undervalued holdings. Here are the Top 7 stocks based on our calculations:
Ticker | Name | Upside (finbox.io) | Upside (Analyst Target) | Blend Upside |
---|---|---|---|---|
TAHO | Tahoe Resources, Inc. | 66.8% | 54.2% | 60.5% |
UAL | United Continental Holdings, Inc. | 76.6% | 36.1% | 56.4% |
SWN | Southwestern Energy Company | 53.4% | 44.4% | 48.9% |
SBGL | Sibanye Gold Limited | 61.0% | 33.7% | 47.3% |
RRC | Range Resources Corporation | 23.5% | 61.5% | 42.5% |
BTG | B2Gold Corp | 26.3% | 47.6% | 36.9% |
AUY | Yamana Gold Inc. | 41.7% | 28.0% | 34.8% |