“The flagship fund uses the relatively rare combination of a
fundamentally based systematic approach. (Most hedge funds that are
fundamentally based use a discretionary approach, and most hedge funds that use
systematic approaches base them on technical input.)….Dalio describes his
approach as “timeless and universal.” He believes an economic model should
encompass multiple times and countries. Bridgewater employs a fundamentally
based computer model that incorporates trading rules gleaned from both Dalio’s
four decades of market observations as well as Bridgewater’s analysis of
markets going back hundreds of years and spanning a broad range of developed
and emerging economies….The idea that the same fundamentals would have
different implications under different circumstances and environments is an
essential component of Dalio’s analytical thinking. As a result, categorization
is an important tool for both conceptualizing problems and finding solutions.”
