Dalio on what corona means for the global economy

Ray Dalio just had 52 min interview on TED NY almost interrupted, sharing great content (Thank you，TED!). When Ray talks, we all should listen. The video is worth watching in entirety here.

For those too busy, here are my 3 key takeaways:

1) This crisis is more like 1930’s not 2008

Ray says this going to take years to unwind. The massive government stimulus and free money printing is similar to the 30’s depression. He also states a “new order” is coming. The world is being changed forever – just going take some time to figure out what and how exactly.

I agree. Neither the politicians nor the stock markets are behaving rationally. We are far from out of woods yet but with daily mixed and irresponsible message/actions from leaders playing politics, and stock market traders, I don’t get – at all why any rational mind would think we are on route to V recovery or even have bottomed yet.

2) Our behaviour will dictate the severity of outcomes

Ray reminds us to study history and leverage as guidance. He laments the massive politicizing of this crisis. The massive blame game and cover-you-ass behaviour of the leaders. Ray cited China is trying to help but due to politics, it’s very difficult to even accept help. Anyone looking sympathetic to China is called out as the enemy, the traitor.

In times of uncertainty and fear, humans always look for scapegoats and sow fear and hatred – but at what price? Many actions are self-defeating. The world post Trump was already anti-internationalist and globalism – covid-19 is intensifying and accelerating it, at at time when leaders of the world need to work together to bring solution.

This is not happening now, and Ray asked his hosts to step up and bring different viewpoints to their audiences, be brave. His hosts agreed.

3) How to invest now

Ray repeated several of his smart investment principles:

• Staples with strong balance sheets e.g. Campbell Soup, should be good investments now
• There will emerge many winners in innovators that can help solve problems in the emerging New Order
• Cash is ‘seductive’ as not as volatile but never good investment due to quantities easing/inflation (about 2% deprecation/year)
• Stay diversified

Thank you, Ray, for your generous sharing of your wisdom.