Ray Dalio's Bridgewater Raises Stake by Over 800% in 9 Stocks, Including Netflix and Verizon, in Q3; Sells Lyft and JPMorgan

Bridgewater Associates, founded by billionaire investor Ray Dalio, made significant adjustments to its portfolio in Q3, according to the latest 13F-HR filing with the US Securities and Exchange Commission. Known for its risk parity, 'Pure Alpha,' and 'All Weather' investment strategies, the hedge fund has been reshaping its holdings amid changing market conditions.

Bridgewater Associates was shaped by Dalio's strategies around risk parity to balance risks across asset classes, 'Pure Alpha' to attain maximum return-to-risk ratios via active management, and the 'All Weather' investments for consistent returns regardless of the economic landscape.

Dalio's Legacy and Recent Challenges

Ray Dalio, worth approximately $15.4 billion, stepped down as co-Chief Investment Officer in 2022 to entrust the fund's management to younger leaders. He retired as CEO in 2017 but remains a board member and mentor. The market upheaval of 2022 impacted Bridgewater's performance, but recent restructuring and cost-cutting measures have helped restore profitability.

Major Trades in Q3: Focus on Growth and Recovery

During the three months ending 30 September, Bridgewater increased stakes in sectors like streaming, telecommunications, e-commerce, beverages, and biotech, while reducing holdings in major banking stocks. Here are some of the fund's most notable purchases:

• Netflix (Nasdaq: NFLX): 23,490 shares for $29.8 million (£22.6 million), an increase of 896.6%
• Verizon Communications (NYSE: VZ): 505,010 shares for $22 million (£16.7 million), up 860%
• MercadoLibre (Nasdaq: MEL): 24,510 shares for $60.6 million (£46 million), up 1,237%
• Popular (Nasdaq: BPOP): 158,390 shares for $18.7 million (£14.2 million), up 2,906%
• Evercore (NYSE: EVR): 66,540 shares for $20.2 million (£15.3 million), up 1,402%
• Monster Beverage (Nasdaq: MNST): 571,710 shares for $37.1 million (£28.2 million), up 1,447%
• Exelixis (Nasdaq: EXEL): 822,100 shares for $35 million (£26.6 million), up 3,940%
• Westinghouse Air Brake Technologies (NYSE: WAB): 64,870 shares for $13.2 million (£10 million), up 4,239%
• Trane Technologies (NYSE: TT): 31,640 shares for $13.5 million (£10.2 million), up 5,343%

Bridgewater Offloads 10 Stocks, Including Lyft, JPMorgan, United Airlines

The hedge fund also made some unexpected trades, completely offloading its entire stake in major companies across diverse industries like:

• Lyft (Nasdaq: LYFT)
• Spotify (NYSE: SPOT)
• JPMorgan (NYSE: JPM)
• United Airlines (Nasdaq: UAL)
• Pfizer (NYSE: PFE)
• Synopsys (Nasdaq: SNPS)
• Lennar (NYSE: LEN)
• CoStar Group (Nasdaq: CSGP)
• Chart Industries (NYSE: GTLS)
• BHP Group (NYSE: BHP)

The fund also trimmed positions in large-cap stocks within the so-called Magnificent 7, such as Nvidia (Nasdaq: NVDA), Amazon (Nasdaq: AMZN), and Alphabet (Nasdaq: GOOGL).

Market Volatility and Strategic Rebalancing

Bridgewater's significant portfolio reshuffle suggests a possible move away from US tech megacaps and a cautious stance on industries like biotech, air travel, real estate, and mining. Dalio recently warned of an AI bubble, warning that valuations of leading AI companies might be overstretched.

'There's a lot of bubble stuff going on. But bubbles don't pop, really, until they are popped by tightness of monetary policy and so on,' Dalio said in a recent interview. He noted that outside of AI-related stocks, the market has performed relatively poorly.

Implications for Investors

The shifts indicate a strategic recalibration as Dalio and Bridgewater navigate uncertain economic conditions. The increased stakes in streaming and telecom companies point to a focus on sectors with more stable growth prospects, while the divestments reflect a cautious approach to high-flyer stocks and sectors vulnerable to economic shifts.

Bridgewater Associates' Q3 activity underscores the evolving landscape of global markets and the importance of adaptive investing. Dalio's warnings about an AI bubble and the fund's reshuffling highlight the ongoing uncertainty and the need for careful risk management.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.