King of hedge funds Ray Dalio offered an analogy for economic and credit cycles that even an 8-year-old could understand.

During the first part of the game, "property is king" as everyone converts cash into investments. During the second part, "cash is king" as losers are forced to liquidate investments to pay bills.

Right now we're in the second part of the game.

Here's an excerpt from Dalio's "Template For Understanding":

A cycle is nothing more than a logical sequence of events leading to a repetitious pattern. In a capitalist economy, cycles of expansions in credit and contractions in credit drive economic cycles and they occur for perfectly logical reasons. Each sequence is not pre-destined to repeat in exactly the same way nor to take  exactly the same amount of time, though the patterns are similar, for logical reasons. For example, if you understand the game of Monopoly®, you can pretty well understand credit and economic cycles. Early in the game of Monopoly®, people have a lot of cash and few hotels, and it pays to convert cash into hotels. Those who have more hotels make more money. Seeing this, people tend to convert as much cash as possible into property in order to profit from making other players give them cash. So as the game progresses, more hotels are acquired, which creates more need for cash (to pay the bills of landing on someone else’s property with lots of hotels on it) at the same time as many folks have run down their cash to buy hotels. When they are caught needing cash, they are forced to sell their hotels at discounted prices. So early in the game, “property is king” and later in the game, “cash is king.” Those who are best at playing the game understand how to hold the right mix of property and cash, as this right mix changes.

Now, let’s imagine how this Monopoly® game would work if we changed the role of the bank so that it could make loans and take deposits. Players would then be able to borrow money to buy hotels and, rather than holding their cash idly, they would deposit it at the bank to earn interest, which would provide the bank with more money to lend. Let’s also imagine that players in this game could buy and sell properties from each other giving each other credit (i.e., promises to give money and at a later date). If Monopoly® were played this way, it would provide an almost perfect model for the way our economy operates. There would be more spending on hotels (that would be financed with promises to deliver money at a later date). The amount owed would quickly grow to multiples of the amount of money in existence, hotel prices would be higher, and the cash shortage for the debtors who hold hotels would become greater down the road. So, the cycles would become more pronounced. The bank and those who saved by depositing their money in it would also get into trouble when the inability to come up with needed cash caused withdrawals from the bank at the same time as debtors couldn’t come up with cash to pay the bank. Basically, economic and credit cycles work this way

Now check out the 22 richest bankers in the world >

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We're all familiar with the mystique and cult-like atmosphere that surrounds Ray Dalio's Bridgewater. Rumors are rampant and imaginations tend to run wild when it comes to discussing what it's really like to work in the Westport, Connecticut-based hedge fund. 

Well, imagine no more. DealBook's Kevin Roose happened upon a blog post that Kathleen O'Grady, a former personal assistant of Dalio's, wrote about her experiences working for the king of hedge funds.

O’Grady is now an "authenticity coach" based in North Carolina, and she told Roose that working at Bridgewater was much like the story of the book/film "The Devil Wears Prada," in which a college graduate works for a high powered fashion magazine editor.

Now, before you start drawing comparisons of Ray Dalio to Miranda Priestly (or Meryl Streep, for that matter), O'Grady said it was the erratic and surprising nature of many of her tasks that fueled the metaphor. She also looked upon the experience fondly and wrote that she learned more in six months at Bridgewater than most people do in a lifetime.

Here's the story behind one of those strange tasks that she was charged with:

As I remember it, one of Ray’s clients from Japan had visited his home in Vermont and the two of them went hunting. The client shot a very large and unique looking bird. In what I imagine was a gesture of respect for the man and the bird, Ray had the thing stuffed by taxidermy and mounted on an engraved plaque. It was my job to get it shipped to Japan. I’ll never forget. It was a particularly windy day in Westport, CT and I delicately placed the mounted bird in my passenger seat, gingerly wrapping the seat-belt around its midsection without mussing the feathers. Carrying the bird in and out of the post office and several shipping stores became more hilarious each time. People stared. I smiled back. Finally though, when I’d reached the last place in the area that I could try before getting back to the office on time, I wasn’t going to take ‘no’ for an answer. The clerk gave me a look of disbelief when I placed the bird on the counter and I said, “I need to ship this to Japan.” He just laughed at me. I then looked at him sternly and said, “This is no laughing matter. This bird needs to make it to Japan in flawless condition or I will lose my job.” The guy looked back at the bird and then back at me. By then I had used my acting skills and summoned some tears. Finally he agreed to try and crate the bird for shipment. I still don’t know to this day if it made it past customs, but I was satisfied that I had not given up on my task.

Read more about O'Grady's stories here >

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Right now, he's the most successful hedge fund manager in the world, and according to Forbes he's the 88th richest person on the planet with an estimated net worth of $10 billion.

Those are definitely notable numbers, but Dalio's life and work vacillate between being very public and very private.

His hedge fund, Bridgewater Associates, for example, is known for its secrecy — some even say that it's cultish — and potential employees are often vetted for their personalities. They need to match the rest of the team on campus in Westport, Connecticut.

Then again, Dalio is also very public about certain things. He's very open about his manifesto on investing, which he calls his 'Template for Understanding.' How many hedge funders do that?

Bottom line: There's only one Ray Dalio, so you should study up.

Dalio was born in Jackson Heights Queens in 1949.

He wasn't a great student when he was younger, saying he had a bad memory and didn't like studying. Dalio got into investing after he got a great stock tip while caddying at Links Golf Club.

Source: The New Yorker

He holds a BA from Long Island University, and an MBA from Harvard.

He continued trading independently when he went to Harvard Business School, and landed a job on Wall Street when he got out.

Sometime in his 20s, he found out the Beatles were into transcendental meditation and tried it out.

He said it made him better at school and now he does it every day, and he thinks it's the reason for his success. Here's why:

"I notice a difference from the moment I meditate. I can be stressed, or tired, and I can go into a meditation and it all just flows off of me. I'll come out of it refreshed and centered and that's how I'll feel and it'll carry through the day."

Watch him explain the whole thing below:

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Much has been said and reported about Bridgewater founder and legendary hedge funder Ray Dalio's odd habits and beliefs. Now, some proof that those eccentricities have been passed on to his offspring—Dalio's son, Paul, is set to direct a film "Mania Days," Forbes reported.

Generating more buzz than Paul's Dalio connection is the fact that famed filmmaker Spike Lee is attached to the film and will be overseeing its production on a "hands-on basis," according to Forbes.

Paul wrote "Mania Days," which is about "a manic depressive rapper who gets involved with a manic depressive poet in a passionate affair that results in a pregnancy." Sounds intense.

We're pretty excited about the young Dalio's burst of creativity. But this isn't Paul's first foray into entertainment, and he's worked on several films in the past. Currently, he's a producer at the David Lynch Foundation. His bio at the foundation reads:

Paul Dalio was always a seeker of spirituality. So naturally when that combined with his love for filmmaking he made it his life mission to bring the Kama sutra to the pornography business to spread enlightenment to mankind but got kicked out of college because it was in violation of thesis regulations. He then found refuge in David Lynch with a newfound hope that a disturbed person could also find enlightenment

What? Kama sutra? Okay then.

Paul's dad isn't that ordinary either, check out Ray Dalio's life here>>

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Having investing experience with Bridgewater—arguably the largest and most successful hedge fund in the world—should mean the opening of many employment doors in the financial industry.

Right?

Not so much, according to one hedge fund recruiter who has dealt with employees of Bridgewater. He told Business Insider that despite Bridgewater's high returns and brilliant reputation in the industry, they don't produce individuals that are appealing to most funds hiring these days.

These days, candidates with quantitative experience are in high demand, but firms hiring for those positions are not impressed when they see Bridgewater as the latest employer, the recruiter said.

The issue seems to be that the trading models at Bridgewater are considered to have been perfected, so there's not much progress or innovation to be made, the recruiter said.

Also consider: The firm's culture is so unique that employees are pretty much molded for Bridgewater. People have told us that culture is really important to recruiting at Bridgwater before, when you interview there they want to make sure your personality will fit in. But if you fit in there, the question is, will you fit in anywhere else?

"No doubt a Bridgewater fundie has an impressive academic/tech background, but Bridgewater does not make someone more compelling than someone with equal background coming out of a Credit Suisse fund, a small quant fund or even academia," he added.

The recruiter said it is also harder for head hunters to track down Bridgewater employees because of the firm's secrecy and former Bridgewater employees also tend to not continue working in financial industry after they leave the firm—factors that may also contribute to why we rarely hear of those who have gone on to greater heights and fame after Ray Dalio's tutelage.

That cultural aspect of the firm does seem to help out some who seek ventures outside of finance. Remember when we happened upon the tale of Kathleen O'Grady, Dalio's former personal assistant? O'Grady, who is currently a life coach based in North Carolina, said she she said learned more in 6 months with Dalio than most people learn in a lifetime.

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As if he needs any more plaudits and recognition, Bridgewater's Ray Dalio has taken home the crown of the top-paid hedge fund manager of 2011.

FT:

Ray Dalio, head of Bridgewater, the world’s largest hedge fund, personally made $3.9bn in a year that his $70bn Pure Alpha fund produced $13.8bn of investment profits for its investors, according to industry rankings.

The list of the best paid managers was put together by Absolute Return magazine.

Second and third place went to Carl Icahn and James Simons.

Ray's track record is totally outstanding, and he's well-known for both his management principles, and his culture.

Click here to learn Bridgewater's secrets >

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Bridgewater's Ray Dalio personally made a mind-blowing $3.9 billion last year, making him the top-paid hedge fund manager of the year.

In fact, his income beats that of many countries—and not just the tiny ones you've never heard about.

The following countries recorded a nominal GDP of less than or equal to $3.9 billion last year, according to the CIA World Factbook:

1. Suriname ($3.9 billion)
2. Swaziland ($3.9 billion)
3. Togo ($3.6 billion)
4. Fiji ($3.4 billion)
5. Lesotho ($2.7 billion)
6. Eritrea ($2.6 billion)
7. Guyana ($2.5 billion)
8. Somalia ($2.4 billion)
9. Central African Republic ($2.3 billion)
10. Maldives ($2.1 billion)
11. Sierra Leone ($2.1 billion)
12. Cape Verde ($1.9 billion)
13. Bhutan ($1.8 billion)
14. Burundi ($1.7 billion)
15. San Marino ($1.6 billion)
16. Belize ($1.5 billion)
17. Antigua and Barbuda ($1.3 billion)
18. Djibouti ($1.3 billion)
19. Saint Lucia ($1.3 billion)
20. Liberia ($1.2 billion)
21. Guinea-Bissau ($1.0 billion)
22. Seychelles ($1.0 billion)
23. Grenada ($800 million)
24. Solomon Islands ($800 million)
25. Vanuatu ($800 million)
26. Saint Kitts and Nevis ($700 million)
27. Saint Vincent and the Grenadines ($700 million)
28. Timor-Leste ($700 million)
29. Comoros ($600 million)
30. Samoa ($600 million)
31. Dominica ($500 million)
32. Tonga ($400 million)
33. Kiribati ($200 million)
34. Sao Tome and Principe ($200 million)
35. Palau ($164 million)
36. Marshall Islands ($161.7 million)
37. Tuvalu ($32 million) 

(h/t to @BarbarianCap for proposing this post)

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No hedge funder made more money last year than Bridgewater Associates founder Raymond Dalio — he made $3.9 billion.

Not bad for the son of a jazz musician from Jackson Heights, Queens.

Most of the time we imagine powerful Wall Streeters growing up in the lap of luxury, going to boarding school and attending Ivy League Universities.

But it isn't always like that, there are a handful of other Wall Streeters who started their lives in either impoverished or very humble conditions before they made their journey to the top of the financial world.

We've compiled a list of these Wall Streeters with a rags to riches tale to tell.  Some of them might surprise you.

Ray Dalio

Ray Dalio grew up in Jackson Heights, Queens. His father was a jazz musician.

He bought his first stock (Northeast Airlines) in the 1960s with money earned working as a golf caddy. He was just 12 years old, and the shares eventually tripled in value.

He attended Long Island University in 1967. After that, he clerked at the NYSE before attending Harvard Business School.

He worked at Dominick and Dominick LLC and then Shearson Hayden Stone before founding his hedge fund, Bridgewater Associates in his NYC apartment in 1973. Now it's the largest hedge fund in the world.

Source: Insider Monkey

John Stumpf

John Stumpf shared a room with his brothers until he was married — enough said, right?

Well there's more. He grew up on a dairy and poultry farm in Minnesota. He had bad grades and high school and his parents had no money so he ended up working as a bread maker after he graduated.

He finally got into St. Cloud University and worked as a repossession agent at First Bank in St. Paul, Minnesota. That's what lead him to getting his MBA at the University of Minnesota.

Now he's the CEO of Wells Fargo.

Source: LA Times,

Jon Corzine

Disgraced former MF Global chief executive Jon Corzine touted his humble beginnings during political campaigns for office.

Corzine grew up on a small family farm in Illinois. 

His father farmed the land and sold insurance and his mother taught elementary school. 

He later became the chairman and CEO of Goldman Sachs. 

When he left Goldman he was believed to have a net worth of $350 million.

After his stint at Goldman, he was a U.S. senator and the governor of New Jersey. 

Then he became the CEO of MF Global, which recently filed for bankruptcy. 

Source: New York Times

Source: Fox Business

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While more and more analysts are beginning to agree that the effects of the European Central Bank's two three-year long-term refinancing operations have been fleeting, Ray Dalio and Bridgewater Associates have gone a step farther.

The fund argues in a recent note to investors that Spain is even worse off than it was before the ECB announced its two LTROs in December.

Dalio argues that the tenuous circle of fragile Spanish banks providing funding for the Spanish government which in turn supports the troubled banks is swiftly eroding, if not vanished already:

We summarize some key points

• Spanish banks have no desire to purchase more Spanish government debt.

• Foreign banks continue to sell Spanish sovereign bonds.

• The LTROs may have briefly brought down Spanish borrowing costs, but they did not translate into a thaw in interbank lending. Further, another LTRO would have "muted" effect, particularly since the last two were so recent.

The severity of these problems has left Spain in far more dire straits than before, even worse than it was before the LTRO. Dalio and his team believe that funding gaps will soon force Spain, the EU, and/or the ECB to take extraordinary measures to save the country and its financial system from economic disaster.

But policy action will be complicated:

• Dalio and his team believe that since the burden is being shifted to the public sector and domestic banks, we will be less likely to see the kind of private sector debt restructuring used in Greece.

• They also predict that EU leaders could soon tire of the slow progress of Spanish bank mergers meant to clean up Cajas' balance sheets.

• Dalio believes that EU policymakers remain committed to ill-fated attempt to "save almost everyone" by using under-capitalized bailout funds like the European Financial Stability Facility.

• But they will also have to act in a much more of a hurry than they previously believed, given Spain's predicament. This will show the inadequacy of currently budgeted resources to deal with the problem, and could pain EU leaders' abilities to deal with crisis problems in a negative light.

• Ultimately, Dalio thinks, trying to save Europe without restructurings will prove to costly, and EU leaders will have to accept that more restructurings will be necessary.

SEE ALSO: 10 Horrible Facts About Spain >

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We're all familiar with the eccentric hiring practices at Ray Dalio's Bridgewater—the world's largest, most successful and perhaps most mysterious hedge fund. Sources that have experienced Bridgewater's hiring process told Clusterstock that the interview includes spending about 30% of the time talking about one's weaknesses, videotaped in-person sessions and discussing opinions on torture.

And just as ambiguous as the process is, what qualifies a candidate to be hired at Bridgewater is equally elusive.

But now, thanks to a Bloomberg Businessweek feature on "How to Get Hired At...," we have another enigmatic answer from the king of hedge funds himself. Dalio told Businessweek—

Interest in the subject matter is a minor consideration. Unlike a lot of firms, we look at what someone is like rather than what they did before. We are first interested in people’s values, second interested in their abilities, and least interested in their precise skills. We want independent thinkers who are willing to put aside their egos to find out what is true. Did the candidate come up with a new idea and build it out? Like if when he was 15 he mowed lawns and developed that into a business by getting others to mow lawns with mowers he bought them. We ask people questions that actually don’t have a right or wrong answer, such as: Should there be a market for transplant organs? The answer doesn’t really matter. It’s totally great if the person’s thinking on the subject ends in a different place than the beginning, because moving forward together to get at the best answer is more important than being right from the outset.

Read the whole Businessweek report here >

(hat tip DealBreaker)

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TIME Magazine has released their list of the 100 most influential people in the world, and we really weren't too surprised to find Ray Dalio, the founder of Bridgewater—one of the most successful hedge funds in the world—and newly minted King of Hedge Funds, on the list.

To add even more fanfare to the honor, former Federal Reserve Paul Volcker wrote the short explanation of why Dalio deserves the title, citing not only Dalio's brilliance as a hedge fund manager, but also his support of jazz music and the ownership of a ship suited for deep-sea exploration.

From TIME:

What matters more is that he has strong and a bit unorthodox convictions about the workings of the economic machine. The judgments that have emerged have been prescient. Ray was, for example, one of the first to recognize the risks of the excessive indebtedness and leveraging of the U.S. and some European economies.

Read the whole TIME piece here >

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Today, on Bloomberg TV's 'Money Moves', host Deirdre Bolton sat down with Bob Rice of Tangent Capital Partners for a segment called 'Bob's Buzz Words.'

The term of the day was 'overlay' and Rice especially focused on what that  means in the hedge fund world.

If you've never heard of it before, in brief, it's when you design a new group of investments to compliment a group of investments you already had — either to reduce that initial group's risk, or to juice them up a bit.

That's interesting, but what was even more interesting was the anecdote Rice shared about someone using the strategy.

Rice said that when Ray Dalio started Bridgewater, he mostly offered clients overlays so that they could turn hum-drum investments into Alpha generating power houses.

Watch the video below:

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Dealbreaker reported earlier this month that Bridgewater is requiring all of their employees to take a test on Principles, the book on investing written by the firm's founder Ray Dalio. 

Now, more details about the test, which is suppose to take place in two sessions from 9 a.m. to 5 p.m. on April 24th, has been leaked to Deabreaker.

What we found most amusing was the list of reasons given to rationalize the test (which sounds pretty darn boring, except for the picnic in between)—

We've heard of the eccentric inner culture of Bridgewater before, much likened to a cult. Now, they're referring to their employees minds as "dots" and talking about building and evolving a machine. Your guess on what he's really up to is as good as ours.

See the entire run-down of Bridge water's big test day at Dealbreaker >

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Barron's Sandra Ward recently scored an interview with Ray Dalio, one of the world's most successful yet secretive hedge fund managers.

Dalio offers his view of the global economy and markets including his take on Europe, U.S. Treasuries, and gold.

However, his assessment of deleveraging was particularly interesting.

Dalio notes there are three types of deleveraging:

• austerity: "pull in you belt, spend less, and reduce debt"
• debt restructing: "creditors get paid less or get paid over a longer time frame or at a lower interest rate"
• printing of money: "typically happens when interest rates are close to zero, because you can't lower interest rates any more"

Dalio describes the U.S. deleveraging process as beautiful.  Here's an excerpt from Barron's:

A beautiful deleveraging balances the three options. In other words, there is a certain amount of austerity, there is a certain amount of debt restructuring, and there is a certain amount of printing of money. When done in the right mix, it isn't dramatic. It doesn't produce too much deflation or too much depression. There is slow growth, but it is positive slow growth. At the same time, ratios of debt-to-incomes go down. That's a beautiful deleveraging.

We're in a phase now in the U.S. which is very much like the 1933-37 period, in which there is positive growth around a slow-growth trend. The Federal Reserve will do another quantitative easing if the economy turns down again, for the purpose of alleviating debt and putting money into the hands of people.

We will also need fiscal stimulation by the government, which of course, is very classic. Governments have to spend more when sales and tax revenue go down and as unemployment and other social benefits kick in and there is a redistribution of wealth. That's why there is going to be more taxation on the wealthy and more social tension. A deleveraging is not an easy time. But when you are approaching balance again, that's a good thing.

Read Ward's entire interview with Ray Dalio at Barrons.com.

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CNBC's Hedge Fund Specialist/"Squawk Box" producer Maneet Ahuja's new book "The Alpha Masters" is out today.

Ahuja—who is known for her massive Rolodex filled with the biggest names in the hedge fund industry—gives her readers a peak into the lives and careers of the most well-known and legendary investors

What's more is she also reveals some of their earliest trades, many of which were stock picks these hedge fund heavyweights made when they were kids. 

Ray Dalio, Bridgewater Associates

Background: When Dalio just 12-years-old, he spent time working at a nearby golf course as a caddie.  With his first job, he was able to collect tips from golfers, many of whom happened to be Wall Streeters.  He would then take those funds and research stock ideas in the Wall Street Journal.  Any stock he would pick at this age had to cost less than $5 a share and it had to be a name he recognized.

First Stock Pick: Following his own investment method, the first stock Dalio decided upon was Northeast Airlines.

Result: Dalio's first stock pick ended up tripling in value right after he bought it.  In the book, Dalio recalled that if it wasn't for that successful stock pick, he may of ended up in a different field. 

Source: The Alpha Masters 

John Paulson, Paulson & Co.

Background: Paulson first starting trading stocks when he was 14-years-old with money his father gave him.  When searching for an investment idea, Paulson would comb the New York Times for stocks trading at their lows with the widest discrepancy. 

First Stock Pick: The first stock pick he settled on a company called LTV, which had a high of $66 and a low of $3.  He bought it when it was trading at $3 thinking he would sell when it went back to $66.

Result:  LTV ended up going bankrupt.  But don't feel too bad for him.  Paulson kept LTV in his portfolio and eventually the company emerged from bankruptcy and he received out-of-the-money warrants in LTV Aerospace.  The stock price for LTV Aerospace soared.  While he was at Harvard, the company was bought out and his stock was worth ~$18,000.  

Source: The Alpha Masters 

David Tepper, Appaloosa

Background: Tepper became interested in stocks because of his father, an accountant (not a CPA), used to to discuss investing with him.

First Stock Pick: When Tepper was in high school, he bought 100 shares of Career Academies for $2 a piece. 

Result: That company ended up going bankrupt, but that didn't stop him from wanting to pursue a career in investing.   

Source: The Alpha Masters

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As the son of hedge fund legend Ray Dalio, Matt Dalio should be no stranger to raising money.

But this time, it's for a good cause.

Dalio is organizing a fundraiser for his charity, China Care Foundation, in Greenwich that will feature country music stars the Dixie Chicks and Willie Nelson. The event is taking place June 23 at the exclusive Belle Haven Club, and is expected to cost over $3,000 a head, according to the Stamford Advocate.

China Care offers support to orphanages in China by offering medical aid, and social and educational opportunities to special needs orphans. Dalio founded China Care in 2000 when he was only 16 after he was inspired by visits to the country and personally witnessing the orphanage system in China. The non-profit has has various chapters in high schools and colleges across the U.S.

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Billionaire hedge fund king Ray Dalio, the founder global macro fund behemoth Bridgewater Associates, encourages all of his employees to live by his famous set of Principles.

Dalio's Principles include hundreds of nuggets of wisdom, which are available for all of his employees on a custom iPad app. 

According to Daily Intel's Kevin Roose, Bridgewater has developed another app. 

It's being described as a "Baseball Cards" app and it organizes all of the fund's employees and their respective skills, strengths and weaknesses, sources told Daily Intel.  It also rates them on job performance and how they fit into the company's culture, the report said.

Here's what Dalio says about baseball cards in his Principles. 

Imagine if you had baseball cards that showed all the performance stats for your people: batting averages, home runs, errors, ERAs, win/loss records. You could see what they did well and poorly and call on the right people to play the right positions in a very transparent way. These would also simplify discussions about compensation, incentives, moving players up to first string, or cutting them from the team.

We would love to see what Dalio's card looks like, but, unfortunately, it's an in-house app only. 

Read more about the new app here >

DON'T MISS: The Mysterious Life Of Ray Dalio -- The Hottest Hedge Fund Manager In The World >

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Interesting comments from one of the world’s most influential investors, Ray Dalio of Bridgewater (via Zero Hedge):

Be Careful When Betting Against Human Nature

Alliances are shifting in a logical manner. The German-French alliance is breaking down in favor of contributor (higher rated credit) countries aligning against recipient (lower rated credit) countries. Similarly, the terminology to describe who is reasonable and who is unreasonable reflects these parties’ respective interests. Those who don’t have to contribute use terms like “inflexible” and “irresponsible” to describe the contributors’ reluctance to “do enough” to prevent collapse by lending more to recipients who can’t service their existing debts, while those who have to contribute use terms like “inflexible” and “irresponsible” to describe the recipients’ reluctance to “do enough” cutting of their spending and borrowing to service their debts. Students of human nature and deleveragings know that this is to be expected.

Similarly, talk of a fiscal union to resolve these problems has to be looked at in light of the question of whether it is in the interest of fiscally strong contributors to have a fiscal union with fiscally weak recipients in which the majority rules how the money is divided.

For this reason, we think the popular assumption that the Germans and the ECB (which requires agreement of the key factions within it) will come through with the money to make all these debts good should not be taken for granted. Said differently, we think there are good reasons to doubt that European bank and sovereign deleveragings will be prevented from progressing to the next stage in a disorderly way, without a Plan B in place. This “fat tail” event must be considered a significant possibility.

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In the last few years, Ray Dalio's hedge fund Bridgewater Associates has catapulted to stardom, and it's because, quite frankly, he's amazing at what he does.

In 2011, Dalio's Pure Alpha fund returned a staggering 16%, while many famous hedge funds were hit by double digit losses.  

From Bridgewater's huge returns during 2010-11, Dalio was able to bring home about $7 billion over the two years. And now, he's the 34th wealthiest person in the US, according to Forbes, with a net worth of approximately $10 billion.  

It's quite a lot of money, so we thought we'd come up with some comparisons (and do a little imaginary shopping) so we could visualize how much Ray Dalio's fortune means in real terms. 

Dalio could buy almost 5 million 2013 Super Bowl tickets.

• 4,930,966 2013 Super Bowl Tickets at $2028 each.
• 92,592,592 Tampa Bay Buccaneers at New York Giants regular season tickets at $108 each.

He could pay almost 200,000 teacher salaries.

• 198,019 Elementary School Teacher Salaries at $50,500/ year.
• 50,403 Harvard Professor Salaries at $198,400/ year. 

He could put over 260,000 kids through college.

• 261,917 in-state students could attend Arizona State University for four years($9,545/year)
• 62,736 students could attend Harvard University for four years($39,849/year)

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The "world's most successful hedge fund manager" Ray Dalio is in the red after the first six months of 2012.

The New York Post reports that Dalio's Bridgewater Associates, the world's largest hedge fund with $120 billion AUM, did not have many of its strategic investments pan out in first half of 2012.

Dalio's Pure Alpha fund, which had double-digit returns in 2011, fell 2.7% during the first six months of 2012, the report said.  

Bridgewater is known for having a global macro investing style, meaning that much of its bets are centered on inflation, exchange rates, GDP and other economic trends.  

The firm has a strong devotion to the dollar.  With Europe failing to do much of anything and a rising yen, Dalio's dollar position pulled Pure Alpha into negative territory, according to The Post. 

Pure Alpha also holds positions in gold and other commodities, which have had a rough first half of 2012.

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