The Morning Brief: Ray Dalio on Learning from Failure

Bridgewater Associates’ Pure Alpha II lost another 2 percent in April. As a result, it is now down 8.9 percent for the year. However, its much smaller risk-parity fund, All Weather, was up more than 2 percent last month and 5 percent for the year. It is not known what trades were responsible for the performance at the Westport, Connecticut firm.

Meanwhile, at the Milken Institute Global Conference on Tuesday, Bridgewater founder Raymond Dalio called himself “a professional mistake maker,” explaining that the firm learns more after it fails than when it succeeds. In a follow-up interview with, Dalio explained: “I think the term ‘failure’ almost seems like an end rather than a step. Failure, you fail. OK, but if you start to realize that you’re going to just pause and it’s a step, and it’s a learning thing, then it’s going to help you climb to the next level. If you realize it’s a journey or even learn to accept failure as self-discovery of a strength and a weakness. I think the preconceptions of what it’s going to be is the thing that’s a problem and it stands in the way of personal evolution.”


Daniel Loeb’s Third Point Offshore, managed by his New York-based hedge fund firm Third Point, jumped 1.9 percent in April, cutting its loss for the year to just 0.4 percent. The Standard & Poor’s 500 was up 1.7 percent through the first four months of the year. All of Third Point’s April gains came from its long credit portfolio, which rose 2 percent. Its equity book fell 0.2 percent last month thanks to losses in its long positions.


Daniel Och’s flagship multi-strategy fund OZ Master Fund gained 0.53 percent in April, trimming its loss for the year to 2.85 percent. OZ Asia Master Fund rose 0.83 percent last month and is now off by 2.39 percent for the year. However, OZ Europe Master Fund lost 0.54 percent in April and is now down about 3 percent for the year. Och’s firm, New York-based Och-Ziff Capital Management Group, reported that it managed $42 billion as of May 1, roughly unchanged from the prior month.



Shares of Valeant Pharmaceuticals International popped nearly 10 percent on an otherwise lousy day for the stock market, essentially because it did not receive more bad news. On Tuesday, Moody’s Investors Services confirmed some of its ratings of Valeant and its subsidiaries, including the corporate family, senior secured bank-credit facilities and senior unsecured ratings. Moody’s also upgraded the probability of default rating and affirmed the speculative grade liquidity rating. Moody’s said the action concludes its rating review accompanying Valeant’s late 10-K filing.