It’s Dalio Versus Everyone Else as Money Flows to Europe Stocks

Billionaire Ray Dalio has $18.45 billion in bets against Europe’s biggest stocks. Most of the rest of the investing world is headed in the other direction.

U.S. stocks lost $9.7 billion in investment so far this month while Eurozone shares have gained $3.2 billion, according to data compiled by Bloomberg. Peers of Dalio’s firm, Bridgewater Associates, are mostly wagering that Eurozone equities will rise.

“I’m surprised. That’s a big bet. Dalio and his team are very confident,” said Rick Herman, managing director of asset allocation who helps oversee about $30 billion at BB&T Institutional Investment Advisors Inc. “That’s definitely out of consensus. European stocks are cheaper, and they also have stronger earnings growth.”

Dalio has always marched to the beat of his own drummer, so his big short position, especially when other hedge funds are betting in the opposite direction, could be seen in that context.

Even among those who are short, Bridgewater stands out, according to a Bloomberg survey of hedge funds. The combined value of their shorts stands at $23 billion. Dalio’s position has decreased from $22 billion on Feb. 15 but is still a whopping 43 percent larger than the outstanding bets by Cliff Asness’s AQR Capital Management.
Above the Rest

One Eurozone stock is popular with big U.S. hedge funds. Paul Singer’s Elliott Management Corp., San Francisco-based Farallon Capital Management and Dan Och’s Och-Ziff Capital Management Group LLC are all investors in NXP Semiconductors NV, based in the Netherlands. Qualcomm Inc. is trying to buy the company. Shares are up more than 7 percent since the beginning of the year.
Source: Bloomberg