He put significant heart into the company, not to mention groundbreaking work like Pure Alpha. I'll never see a fractional cent of what he's made but I only remain impressed by what I've read by him and seen of him. Good for Ray for successfully negotiating the hell out of his exit!
Isn't his strategy just a mix of various asset classes? Bonds have done really well for the past 2 decades, save for 2022. I think it shows the dangers of overcrowded strategies like what happened last year.
The comparison would be more accurate with the relative sizes of each industry. Pretty sure there are more software engineers than people working in similarly skilled finance jobs.
Not a finance guy, but from what I read and listened to, yes: "The fund combined multiple uncorrelated return strategies that are leveraged appropriately to maximize returns, while lowering risk." (from CNBC). I think this was a novel approach at the time, finetuning those gains specifically due to lack of correlation, further to specific assets within each class. Side-note, cool asset coorelation (or lack thereof) map: https://www.guggenheiminvestments.com/mutual-funds/resources...
In Principles, he describes some high-level decision making processes. Bridgewater is split into groups of about 300 people. Within those groups, smaller groups are formed to discuss particular strategies. Everybody has "baseball cards" of their coworkers with stats showing peer-rated talent in various sub-domains. When a decision is made, there are two rounds of voting: a raw vote, and a vote weighted by stats (e.g. somebody whose peers have rated them as knowledgeable about agricultural trades would have more votes in this phase). If the two rounds of voting don't align, they try to keep discussing the issue until they do align (though there are tie-breaker rules if deadlock is reached). I'm not saying this system is perfect, but it's interesting to me as a meta-strategy for evaluating potential strategies.
Absolutely loved Principles so much that I bought copies for my team members and some leadership. I implemented small measures of radical transparency with the teams I managed where it made business sense as well. Wasn't always popular with fellow managers but my people absolutely trusted me (and produced accordingly).
The book is highly recommended even if you don't implement half of what he's suggesting as it's based on hard-won experience. His Principles tweets are largely expounding on what's in the Principles book if you don't want to buy it, with some regurgitation which I felt was kind of marketing driven to promote book sales. Definitely worth the read.
> Since the beginning of 2012, Bridgewater’s Pure Alpha II has posted an annualized return of 2.5 percent, according to a document reviewed by Bloomberg Markets, a far cry from its historic average of 12 percent. It’s down 2.8 percent this year through July. (A smaller Bridgewater hedge fund, Pure Alpha Major Markets, has fared better, as has the company’s long-only product.)
I remain appalled by everything I've read by him and seen of him. Shame on him for refusing to set the stage for the next generation, and instead being an avatar of greed and avarice.
> “Should I not invest in the United States because of our own human rights leadership?”
I agree with that retort. It undercuts a "whataboutism" fallacy because its not saying the United States has similar facets to China as a deflection, its about whether an action of an individual is disqualified due to those overlapping realities.
I don't see why you think this isn't whataboutism. You could rephrase it as, "What about the attitude towards human rights in the United States? Should I not invest there either?" without changing it's meaning. Whether the statement relates to an individual or organization's choices is orthogonal to whether it's whataboutism or a deflection. You can't take whataboutism and transmute it into a good faith response by rephrasing it to emphasize your own agency. That seems an absurd suggestion to me, I don't really understand where you're coming from.
A statement is whataboutism if it introduces irrelevant information in order to assert a moral equivalence. If the question is, "Are you concerned about China's human rights record?" (as distinct from, say, "Which of these countries has the better human rights record?"), then the United States is not the subject and pivoting the conversation over to the United States is whataboutism.
> In a CNBC interview in the fall of 2021, Mr. Dalio dismissed concerns about China’s human rights track record, likening the country’s government to a “strict parent.” (Bridgewater manages billions of dollars for companies partly owned by the Chinese government.)
> “Should I not invest in the United States because of our own human rights leadership?” he asked.
Can you honestly tell me that referring to, say, the genocide of the Uighur people, as merely "strict parenting" is an honest and good faith engagement in the discussion with no elements of deflection and no attempt to minimize and dismiss the problem?
My perspective is the line of questioning was to suggest having no exposure to China. At best other companies just reduced exposure to that one state in China or avoided the output of that state. I can completely see a standard thats not different enough than exposure to other major markets to go further than that.
If you have a different view on what he was responding to at all, then I could see why you would say that.
> during the heat of the exit negotiations, Mr. Dalio described the hedge fund as his “property rights,” according to one employee, and indicated that he expected to be compensated accordingly.
Bridgewater is a publicly traded company which manages public institutional resources and funds.
Why should it continue to pay out to the founder after they've departed? Has Mr. Ray not already received numerous remarkably healthy payouts along the way?
I don't understand how this makes any sense, what am I missing?
Edit: thank you @jmillikin, super helpful.
This makes a tremendous difference. Had not heard of Bridgewater until today.
I don't even see what the issue is here. He started the company, built it up to be a large, successful firm, and is the main reason why they now have so many long-term, institutional clients. He's supposed to just give this away to the workers? He's well within his rights to do basically whatever he wants! Most big hedge funds actually close up shop and become family offices to the founder when the founder decides to slow down (e.g, Stan Druckenmiller, Soros, Icahn, etc.), which is way worse for employees. He could do that, or he could sell the firm, or take it public, or anything else that his voting shares legally allow him to do.
Selling the firm to the top employees, and offering them generous "seller financing" terms to do so over 10 years, actually seems like a good deal for them, and has the added benefit of clearly determining who actually believes in the company and its prospects over the long term. These are not regular "rank and file" employees, anyway-- the average net worth of these people is probably at least $30mm.
If I allow myself to be cynical, what this really sounds like to me was an attempt to use his regrettable comments (about China acting like a "strict parent" towards dissenters) as a bludgeon to extort him into giving away an extremely valuable asset to his top executives--who were basically betraying him by trying to force him out in the first place. If I were in his place, I would terminate all of those executives and promote younger, more loyal workers to replace them, and then sell the company to them after they prove themselves for a few years.
There is no issue here. This is simply a story of the transfer of ownership between a company's founder to employees. The framing is incredibly weird, I hate it. The article could simply be rewritten as (not GPT3):
- Ray started to sell the ownership of Bridgewater in the mid 2010s, but retained a controlling interest in the company.
- He financed the buyout of his shares, providing liquidity to employees.
- There were struggles finding leadership that could competently carrying the fund forward.
- Current leadership has a vision of how the fund should operate going forward, and that vision conflicts with some of Ray's stated principles.
- As a result, leadership wants to buy him out entirely, but probably do not have the funds to do so. As a result, Ray is converting his ownership into non-voting preferred stock, conferring him dividend until the sooner of Bridgewater or Dalio's death.
All I can say is finally. The early stories of Bridgewater (pre 250 employees) from former employees with whom I have talked make Bridgewater seem like a truly special place to have worked at. Ray facilitated meetings across the org in a very personal, constructive way. Then AUM ballooned and they went to 2,000+ employees in a snap. Then they brought in consultants like IBM to scale their intimate management style and the last vestige of magic dissolved.
The fund was a zombie asset aggregator for a good 5-7 years. We'll see how it goes going forward.
> I don't even see what the issue is here... He's supposed to just give this away to the workers?
I think the issue (poorly put in the article) is that the founders shares he has still gave him control, whilst the company was ‘owned’ by others, forcing them to do a secret deal giving him better returns than other shareholders.
Surely the workers and board should be loyal to the current shareholders and investors rather than the guy who started and ran the company previously (however successfully)
Technically the board is responsible for all shareholders but his extra voting rights means he can force it to give him preferential treatment. The reason the deal was secret is probably to try to stop any shareholder lawsuits.
> The board has a fiduciary duty with respect to the shareholders; that is, the board has financial and other responsibilities to keep the corporation running efficiently so the shareholders don't lose money."
> He started the company, built it up to be a large, successful firm, and is the main reason why they now have so many long-term, institutional clients.
Maybe. Or maybe hard-working employees are the main reason for that success, and the figurehead at the top was just in the right place at the right time.
> He could do that, or he could sell the firm, or take it public, or anything else that his voting shares legally allow him to do.
In most developed economies a company owner cannot arbitrarily destroy their employees' careers. You have a responsibility to the people who've devoted a substantial chunk of their lives to you.
> Selling the firm to the top employees, and offering them generous "seller financing" terms to do so over 10 years, actually seems like a good deal for them, and has the added benefit of clearly determining who actually believes in the company and its prospects over the long term.
If you can't see how it's inherently inappropriate for a superior to pressure a subordinate to take on a large personal debt to buy an asset of questionable value from that superior, with the implication that their continued employment depends on this, then I don't know what to tell you. What's next, expecting them to "volunteer" to work unpaid hours to prove their commitment to the company?
> In most developed economies a company owner cannot arbitrarily destroy their employees' careers. You have a responsibility to the people who've devoted a substantial chunk of their lives to you.
Again, these aren't poor downtrodden factory workers toiling away in the mines... these are unbelievably well compensated non-founders who have made far more than even the founders of most successful startups, all without taking true entrepreneurial risks. They are already rich beyond measure, and yet their greed is so extreme that they think they are entitled to extort the founder's shares at some knock-down price because of "reasons"-- to the point where they cry about it to the NYT in violation of their NDAs.
Also, you are quite mistaken about the legal duty owed to employees in any capitalist society. You absolutely can wind down a firm, especially if you give sufficient notice in advance to employees (i.e., "we will shut down in 1.5 years from today").
> Also, you are quite mistaken about the legal duty owed to employees in any capitalist society. You absolutely can wind down a firm, especially if you give sufficient notice in advance to employees (i.e., "we will shut down in 1.5 years from today").
Not necessarily. In Germany for example the employees are entitled to set up a works council (under certain conditions), and that council has a right to negotiate for the worker's interests if a restructuring is proposed, including on the point of whether it happens at all, and if they can't reach agreement with management then they're entitled to independent arbitration.
The US government also can and does "force a company to keep operating" in the case where e.g. there's a dispute between two groups of shareholders and/or creditors, one of whom wants to shut it down and the other doesn't. Bankruptcy courts do that all the time; for the court of chancery to do it is rarer but it happens. The difference is that Germany recognises that the workers are also legitimate stakeholders with an interest in the business' continued operation.
That's a different situation that the grandparent mentioned. If I'm running a business in the US and I decide that our goose is cooked and it's eventually going to fail, I can just decide to wind it down and close it (if I have control of the company).
You're saying that Germany can actually tell the company "no, you're not shutting down"? That's just odd.
And there's the rub. If it's not clear who has control and two competing groups think they have control, the court will mediate, at least until things are sorted out (and might force e.g. a Texas Shootout).
In Germany, subject to certain conditions (the company being large enough, having enough employees with long enough tenure, etc.), you can't have 100% control of the company even if you've bought 100% of the shares. The employees are a recognised stakeholder and you have to reach consensus with them to make changes, the same as any other situation where you share control of a company with some other party.
It seems natural to me. You may have poured a lot into the company but so have the employees; you shouldn't be able to unilaterally tear up everything you've built together.
You invest $10M in a new company, most of it in equipment. Hire 10 people who then form a work council (work councils are possible over 5 employees).
3 months in you realize the business will flop, it was a bad idea, so you want to shut it down and sell all the assets and recoup what you can of your investment.
So the work council can say “no”? You're basically forced to run the business until it goes bankrupt?
Well I understand they wouldn't be eligible to form a works council until they've been working there for at least 6 months. But that aside: 10 people have rearranged their lives for you, perhaps relocating or turning down other opportunities, and you think you should be able to shut off their livelihood on a whim? Now that's nuts. The works council can't say "no" arbitrarily - in the worst case you go to arbitration and convince the arbitrator that the business really is going to flop - but they get a seat at the table and a chance to propose/negotiate alternatives to just shutting down.
To say that Ray Dalio was just a figurehead who was in the right place at the right time is about as ridiculous as saying he should get 100% of the credit.
I'm sure he had very hardworking employees and they were necessary for his success and the success of the company. But those employees had to be working on _something_. Deciding what that _something_ is (i.e. the company goal/strategy) and then coordinating the actions of hundreds of employees and motivating them towards that goal is what a leader/CEO does. Doing that successfully over many decades is not easy.
I mean, this is how most successful hedge funds get transferred and how most partnerships do as well.
The next gen takes on loans, often provided by the company to buy out the founders or previous partners. There is nothing strange or in appropriate about that.
> In most developed economies a company owner cannot arbitrarily destroy their employees' careers. You have a responsibility to the people who've devoted a substantial chunk of their lives to you.
No ones career was destroyed unless you know something I don't. Can you cite what you are referring to here?
Most of the people taking over are long term employees who have been making 7+ figures a year for 15+ years now. They aren't been taken advantage of, these are incredibly savvy people.
> No ones career was destroyed unless you know something I don't. Can you cite what you are referring to here?
My point is that even if he's the "owner" (actually not true, he just retains voting control through super-voting shares, which is a whole other rant) he wouldn't (under most developed economies' laws) generally have free rein to arbitrarily do what he wants with the company when that negatively affects the employees. He can probably retire and sell it to the highest bidder, that seems eminently reasonable, but he'd be unlikely to be allowed to arbitrarily downscale or wind up a business that was operating profitably. So the idea that he's somehow doing the employees a favour by keeping the business running at all is pretty lopsided.
Precisely. It’s very… ahem… American… to think that company owners can and should basically treat their employees like livestock. And also that the figurehead deserves thousands of times more compensation than anyone else, by virtue of them being there first. It’s all based on the myth of meritocracy.
Valuing a hedge fund is inherently difficult (past performance is no guide to future returns, after all); valuing one whose reputation is centered on one individual who's about to leave is even more so.
I think it's meant to be Roman numeral abbreviation for a thousand-thousand. You would think MM would be two thousand following the convention, but it's multiplicative like 10^6.
m means mille, Latin for thousand. mille mille is therefore 1 million.
It's used in other business contexts too. If you've ever paid for online ads, you'll know that CPM means cost per mille, the price of 1000 ad impressions.
What’s interesting is that Dalio believes in a massive upcoming crash and a major paradigm change in the markets ie stocks and indexes will no longer always go up long term
Not smart with economics, is the mainstream idea that it will always go up long term? I always kind thought crashes were inevitable occurrence, and that its gotta go down for it to go back up again. And inflation and the ever higher line and so forth is just ultimately a superficial thing to keep things moving.
Or rather, wouldn't it be more rational to strive for the line to stay even? Such that we can save all the tumult, the upticks in suicide, the poverty.
I think that is the point. If it crashes it'll inevitably go back up is the expected behavior. It isn't always true, Japanese market is still lower than 1989. Measured in dollars most international markets have gone sideways for 25 years.
It is massively harder to design a steady state economy than it is to have one with a constant upward trend on things like inflation. You have less degrees of freedom maintaining 0, then you do +.0001 to (some higher number). Also there is game theory elements involved here when it comes to trade. You have to get everyone of any size to also agree to steady state the economy also.
I hear the idea the S&P will go 10% every year (in real value) being treated like a natural law by some people despite the fact that this is obviously impossible. It's a heck of a thing to try and time the peak of the market though.
> I hear the idea the S&P will go 10% every year (in real value) being treated like a natural law by some people despite the fact that this is obviously impossible.
Why is it obviously impossible? It just requires technology to improve at such a rate so that we can extract 10% more value every year from the same amount of labor (minus inflation).
Because we will run out of natural resources. Our supply of natural resources is not going to increase by 10% year over year over the next century unless one of those technologies we develop is alchemy.
As I do this for a living, let me point out, the index is not set in stone, new companies and technologies all replace the old and it will continue forward…
where in the world did you get the idea that the growth of SP500 and natural resources are correlated? This is very naive. There's 0 correlation. SP500 can go up 100x with 0% productivity. It's called hyperinflation.
Boomers retiring in large numbers doesn't seem like a bad place for things to stop going up for a decade or more as they gradually dump their holdings to pay for retirement. Dump unto generations who are strapped for cash trying to buy the overpriced houses boomers also use as their retirement fund.
Nothing against boomers by the way, just stating some random potentially not factual things.
This, and the argument of compounding. That they will take trades that are profitable, and they will reinvest their profits to make more profits and that there are always people who will lose their trades and they will win.
Why does he believe that? Does he think that public companies will capture less of the world's wealth going forward, or does he think that global wealth will plateau?
He has this theory that we basically destroy everything with war and then rebuild. This happens when inequality and debt burdens get too high. The conflicts can be internal to a country and external between countries.
He has two books that outline his theory on currencies and the rise and fall of empires. As in everything is cyclical, and we are at the start of a long downturn. It reads like a real life, analog of Hari Seldon’s Prime Radiant. This is a summary of his latest book which is no longer freely available online
He has to in order to get TV time. He's moved on from being content with being rich - now he's after fame, presence, and recognition and the only way you get that in finance is in making "the end is coming" predictions.
If you say everything will be fine, we might have a year of adjustments before the markets work this out - well, you won't get your air time on cnbc.
McKinsey's Marvin Bower, the person who truly created the firm, made the critical decision to walk away when he was done without extracting anything.
He thus set the standard for future generations of partners, and the result was the creation of an enduring global firm* run by the current partnership group.
Dalio's approach means that the firm is set up to prioritise his personal wealth, not investor and existing partner outcomes. Future partners and investors can read into that as they will, but it doesn't seem sustainable.
It's all related. Maybe that kind of disgraceful behaviour is less likely when the company is closely identified with an individual whose reputation is at stake (whether that's Dalio, Bower or anyone else), and so a pattern where companies close up as that person retires rather than becoming enduring standalone brands would be better for society.
I'm not saying it's necessarily the case, I'm saying it's possible. You can't just assert that ownership structure has nothing to do with it without evidence for that.
The main complaint here is Dalio claims to be transparent, he frequently broadcasts his company meetings in the interest of transparency. In this case the article is implying he wasn't transparent about his plan to extract billions from the business. There was no video call showing the negotiations, heck there was not even an email to the employees.
He kept employees in the dark, in short they are saying he is a hypocrite, and he is a fake social media influencer who says one thing in public and does the opposite in private.
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[ 2.7 ms ] story [ 175 ms ] threadI would say tech probably has worse median outcomes but better right tail outcomes than finance.
It's basically just a textual explanation of Markowitz optimization, known since the 50s.
To me it's as interesting as a trader telling you his secret is "to buy low and sell high".
The book is highly recommended even if you don't implement half of what he's suggesting as it's based on hard-won experience. His Principles tweets are largely expounding on what's in the Principles book if you don't want to buy it, with some regurgitation which I felt was kind of marketing driven to promote book sales. Definitely worth the read.
From mid 2017:
https://www.bloomberg.com/news/features/2017-08-10/bridgewat...
> Since the beginning of 2012, Bridgewater’s Pure Alpha II has posted an annualized return of 2.5 percent, according to a document reviewed by Bloomberg Markets, a far cry from its historic average of 12 percent. It’s down 2.8 percent this year through July. (A smaller Bridgewater hedge fund, Pure Alpha Major Markets, has fared better, as has the company’s long-only product.)
That said, Bridgewater hasn't done that great for awhile.
Why?
I tend to find it okay to compare Sharpes so long that the returns exhibit a somewhat close distribution.
I would expect both the S&P and an equity market neutral L/S to have normally distributed returns.
I agree with that retort. It undercuts a "whataboutism" fallacy because its not saying the United States has similar facets to China as a deflection, its about whether an action of an individual is disqualified due to those overlapping realities.
A statement is whataboutism if it introduces irrelevant information in order to assert a moral equivalence. If the question is, "Are you concerned about China's human rights record?" (as distinct from, say, "Which of these countries has the better human rights record?"), then the United States is not the subject and pivoting the conversation over to the United States is whataboutism.
> In a CNBC interview in the fall of 2021, Mr. Dalio dismissed concerns about China’s human rights track record, likening the country’s government to a “strict parent.” (Bridgewater manages billions of dollars for companies partly owned by the Chinese government.)
> “Should I not invest in the United States because of our own human rights leadership?” he asked.
Can you honestly tell me that referring to, say, the genocide of the Uighur people, as merely "strict parenting" is an honest and good faith engagement in the discussion with no elements of deflection and no attempt to minimize and dismiss the problem?
If you have a different view on what he was responding to at all, then I could see why you would say that.
Bridgewater is a publicly traded company which manages public institutional resources and funds.
Why should it continue to pay out to the founder after they've departed? Has Mr. Ray not already received numerous remarkably healthy payouts along the way?
I don't understand how this makes any sense, what am I missing?
Edit: thank you @jmillikin, super helpful.
This makes a tremendous difference. Had not heard of Bridgewater until today.
https://www.google.com/search?q=is+Bridgewater+publicly+trad...
Card:
> Is Bridgewater Associates a public company?
> Bridgewater Associates is a public company headquartered in Connecticut with an estimated 1,500 employees.
F google, got it dead wrong.
A public company is one that is publicly traded. In other words anyone can buy shares in it which means you become a part owner.
You can read more here: https://en.wikipedia.org/wiki/Public_company
If this is the case, why did you feel a need to respond here?
You have no clue what you are talking about, but made many wild statements based on "is Bridgewater a public company"?
To borrow a bridgewaterism... Everyone is entitled to an opinion, just some are worth a lot less. (meritocracy)
Selling the firm to the top employees, and offering them generous "seller financing" terms to do so over 10 years, actually seems like a good deal for them, and has the added benefit of clearly determining who actually believes in the company and its prospects over the long term. These are not regular "rank and file" employees, anyway-- the average net worth of these people is probably at least $30mm.
If I allow myself to be cynical, what this really sounds like to me was an attempt to use his regrettable comments (about China acting like a "strict parent" towards dissenters) as a bludgeon to extort him into giving away an extremely valuable asset to his top executives--who were basically betraying him by trying to force him out in the first place. If I were in his place, I would terminate all of those executives and promote younger, more loyal workers to replace them, and then sell the company to them after they prove themselves for a few years.
- Ray started to sell the ownership of Bridgewater in the mid 2010s, but retained a controlling interest in the company.
- He financed the buyout of his shares, providing liquidity to employees.
- There were struggles finding leadership that could competently carrying the fund forward.
- Current leadership has a vision of how the fund should operate going forward, and that vision conflicts with some of Ray's stated principles.
- As a result, leadership wants to buy him out entirely, but probably do not have the funds to do so. As a result, Ray is converting his ownership into non-voting preferred stock, conferring him dividend until the sooner of Bridgewater or Dalio's death.
All I can say is finally. The early stories of Bridgewater (pre 250 employees) from former employees with whom I have talked make Bridgewater seem like a truly special place to have worked at. Ray facilitated meetings across the org in a very personal, constructive way. Then AUM ballooned and they went to 2,000+ employees in a snap. Then they brought in consultants like IBM to scale their intimate management style and the last vestige of magic dissolved.
The fund was a zombie asset aggregator for a good 5-7 years. We'll see how it goes going forward.
I think the issue (poorly put in the article) is that the founders shares he has still gave him control, whilst the company was ‘owned’ by others, forcing them to do a secret deal giving him better returns than other shareholders.
Surely the workers and board should be loyal to the current shareholders and investors rather than the guy who started and ran the company previously (however successfully)
In what sense? Having voting control means he gets to pick the (majority of) the board.
> The board has a fiduciary duty with respect to the shareholders; that is, the board has financial and other responsibilities to keep the corporation running efficiently so the shareholders don't lose money."
https://www.cfainstitute.org/en/advocacy/issues/board-respon...
Maybe. Or maybe hard-working employees are the main reason for that success, and the figurehead at the top was just in the right place at the right time.
> He could do that, or he could sell the firm, or take it public, or anything else that his voting shares legally allow him to do.
In most developed economies a company owner cannot arbitrarily destroy their employees' careers. You have a responsibility to the people who've devoted a substantial chunk of their lives to you.
> Selling the firm to the top employees, and offering them generous "seller financing" terms to do so over 10 years, actually seems like a good deal for them, and has the added benefit of clearly determining who actually believes in the company and its prospects over the long term.
If you can't see how it's inherently inappropriate for a superior to pressure a subordinate to take on a large personal debt to buy an asset of questionable value from that superior, with the implication that their continued employment depends on this, then I don't know what to tell you. What's next, expecting them to "volunteer" to work unpaid hours to prove their commitment to the company?
Bahaha. Hilarious.
Also, you are quite mistaken about the legal duty owed to employees in any capitalist society. You absolutely can wind down a firm, especially if you give sufficient notice in advance to employees (i.e., "we will shut down in 1.5 years from today").
Not necessarily. In Germany for example the employees are entitled to set up a works council (under certain conditions), and that council has a right to negotiate for the worker's interests if a restructuring is proposed, including on the point of whether it happens at all, and if they can't reach agreement with management then they're entitled to independent arbitration.
That's doesn't sound like a good thing.
You're saying that Germany can actually tell the company "no, you're not shutting down"? That's just odd.
And there's the rub. If it's not clear who has control and two competing groups think they have control, the court will mediate, at least until things are sorted out (and might force e.g. a Texas Shootout).
In Germany, subject to certain conditions (the company being large enough, having enough employees with long enough tenure, etc.), you can't have 100% control of the company even if you've bought 100% of the shares. The employees are a recognised stakeholder and you have to reach consensus with them to make changes, the same as any other situation where you share control of a company with some other party.
That sounds terrible.
You invest $10M in a new company, most of it in equipment. Hire 10 people who then form a work council (work councils are possible over 5 employees).
3 months in you realize the business will flop, it was a bad idea, so you want to shut it down and sell all the assets and recoup what you can of your investment.
So the work council can say “no”? You're basically forced to run the business until it goes bankrupt?
Thats nuts.
I'm sure he had very hardworking employees and they were necessary for his success and the success of the company. But those employees had to be working on _something_. Deciding what that _something_ is (i.e. the company goal/strategy) and then coordinating the actions of hundreds of employees and motivating them towards that goal is what a leader/CEO does. Doing that successfully over many decades is not easy.
The next gen takes on loans, often provided by the company to buy out the founders or previous partners. There is nothing strange or in appropriate about that.
> In most developed economies a company owner cannot arbitrarily destroy their employees' careers. You have a responsibility to the people who've devoted a substantial chunk of their lives to you.
No ones career was destroyed unless you know something I don't. Can you cite what you are referring to here?
Most of the people taking over are long term employees who have been making 7+ figures a year for 15+ years now. They aren't been taken advantage of, these are incredibly savvy people.
My point is that even if he's the "owner" (actually not true, he just retains voting control through super-voting shares, which is a whole other rant) he wouldn't (under most developed economies' laws) generally have free rein to arbitrarily do what he wants with the company when that negatively affects the employees. He can probably retire and sell it to the highest bidder, that seems eminently reasonable, but he'd be unlikely to be allowed to arbitrarily downscale or wind up a business that was operating profitably. So the idea that he's somehow doing the employees a favour by keeping the business running at all is pretty lopsided.
Then why don't/didn't they start a company where they are more in control?
Why do people use "mm"?
It's used in other business contexts too. If you've ever paid for online ads, you'll know that CPM means cost per mille, the price of 1000 ad impressions.
Or rather, wouldn't it be more rational to strive for the line to stay even? Such that we can save all the tumult, the upticks in suicide, the poverty.
I think that is the point. If it crashes it'll inevitably go back up is the expected behavior. It isn't always true, Japanese market is still lower than 1989. Measured in dollars most international markets have gone sideways for 25 years.
This is not even remotely true if you include dividends.
Why is it obviously impossible? It just requires technology to improve at such a rate so that we can extract 10% more value every year from the same amount of labor (minus inflation).
If technology improves by 10%, we can still see a 10% increase in wealth even if labor and natural resources remain steady.
If technology improves by a whole lot, we could theoretically even see an increase in wealth amidst decreasing labor and natural resources.
Nothing against boomers by the way, just stating some random potentially not factual things.
People state this like some law of nature.
https://www.marketplace.org/shows/marketplace-morning-report...
His first is still free.
https://www.principles.com/big-debt-crises
If you say everything will be fine, we might have a year of adjustments before the markets work this out - well, you won't get your air time on cnbc.
He thus set the standard for future generations of partners, and the result was the creation of an enduring global firm* run by the current partnership group.
Dalio's approach means that the firm is set up to prioritise his personal wealth, not investor and existing partner outcomes. Future partners and investors can read into that as they will, but it doesn't seem sustainable.
*like it or not.
said who?
What relationship are you claiming he had with the firm as I can't really find anything about him and Bridgewater at all.
He kept employees in the dark, in short they are saying he is a hypocrite, and he is a fake social media influencer who says one thing in public and does the opposite in private.