Quite a pivot: Ray Dalio has just reversed his long-standing position on this key asset class.

For years, Ray Dalio has made his contempt for money very clear.

The founder and co-chief investment officer of Bridgewater Associates, the world’s largest hedge fund, told anyone who would listen that money was trash, a point he repeated at MarketWatch’s “Best New Ideas” festival. In Money” just two weeks ago. Dalio said silver was still a “junk investment”, although he may have shown signs of changing his long-held worldview, as he said the true usefulness of silver depends how it compares to others.

Now he has changed his mind. “I don’t think cash is trash anymore,” Dalio said, in a tweet on Monday evening. “At existing interest rates and with the Fed shrinking the balance sheet, this is now a neutral situation, neither a very good nor a very bad deal. In other words, the short-term interest rate term is now roughly correct.

It’s a view investment bank Morgan Stanley has taken for some time. Virtually Risk-Free 6-Month Treasury Bill BX:TMUBMUSD06M
Tuesday morning brought in just under 4%. This compares to the 1.74% dividend yield on the S&P 500 SPX,
the yield of 3.57% on the 10-year Treasury note BX:TMUBMUSD10Y
and the 2% return of the iShares Core US Aggregate AGG bond ETF.

Certainly, if the market turns higher, cash will be left behind. This is the risk/reward trade-off. Stocks rallied on Monday and equity futures were stronger early Tuesday. Dalio generally has a more dexterous touch than, say, Jim Cramer, but perhaps his abandonment of the cash is a sign that now is the time to get out there and put some cash to work.

The steps

After Monday’s explosion of 765 points for the Dow Jones Industrial Average DJIA,
US Equity Futures ES00

NQ00
were pointing up on the second day of the fourth quarter. The 10-Year Treasury Yield BX:TMUBMUSD10Y
fell to 3.57%. BitcoinBTCUSD
was back above $20,000.

The buzz

The US economic calendar features a number of Fed speakers, including Philip Jefferson’s first speech as governor. Data on August job openings and factory orders is due out at 10 a.m. Eastern.

Is it a swivel? The Reserve Bank of Australia hiked 25 basis points lower than expected, hurting the Aussie dollar AUDUSD,
with financial markets now expecting the terminal rate to slide to 3.6% from 4.3% on Monday.

Warren Buffett’s likely successor Greg Abel has made his biggest investment in Berkshire Hathaway BRK
with a purchase of $68 million. That summer, Abel had sold the company his $870 million stake in a utility division he ran.

Naver from South Korea KR: 035420
agreed to pay $1.6 billion, or $17.90 per share in cash, for online fashion retailer Poshmark POSH.
Poshmark went public in 2021 at $42.

The best of the web

A utility has received billions in government green grants to cut down environmentally important forests.

Some retailers are sticking to “Made in Myanmar” after the coup.

Georgia senatorial candidate Herschel Walker has reimbursed a woman for an abortion, according to the Daily Beast, a claim Donald Trump’s Republican ally denies. Walker’s adult son Christian criticized his father for running for office.

Best Tickers

Here are the most active stock tickers as of 6 a.m. Eastern Time.

Teleprinter

Security Name

TSLA

You’re here

EMG

GameStop

CMA

AMC Entertainment

AAPL

Apple

NIO

Nio

MONKEY

Favorite AMC Entertainment

BBBY

Bed bath and beyond

AMZN

Amazon.co.uk

NVDA

Nvidia

AMD

Advanced micro-systems

Table

BitcoinBTCUSD
suddenly moves in the same direction as gold GC00.
Admittedly, this is not a one-to-one relationship, but the correlation with gold is at its highest level in more than a year, according to analysis by digital asset data provider Kaiko. The company said that as the US dollar continued to strengthen, this had a negative impact on both asset classes.

Random plays

The Onion has filed an amicus brief with the U.S. Supreme Court, telling the nation’s highest court that it has a daily readership of 4.3 trillion, with manual labor camps in the whole world.

A company that sells bottled water is valued at $700 million.

How this spray dress worn by model Bella Hadid was created.

Need to Know starts early and updates until the opening bell, but sign up here to get it delivered to your inbox once. The email version will be sent around 7:30 a.m. EST.

Listen to the Best New Ideas in Money podcast with MarketWatch journalist Charles Passy and economist Stephanie Kelton

.

Add Comment