• Bridgewater Associates, the world's largest hedge fund, laid off dozens of employees across the firm this month, the Wall Street Journal reported Friday.
• The job cuts spanned Bridgewater's research team, client services, recruiters, audit groups, and the core management team, according to the report. 
• Bridgewater told the Journal that "team members will be working more from home so we won't need the same number of support people, new technologies are changing what type of people we need and how we serve our clients, and we also want to become more efficient."
• Most Bridgewater employees have been working remotely due to the coronavirus pandemic, according to the WSJ.
• Read more on Business Insider. 

Ray Dalio's Bridgewater Associates has laid off several dozen employees across the firm this month, the Wall Street Journal's Juliet Chung reported Friday.

The layoffs include some Bridgewater veterans with more than 15 years at the firm, and span the group's research team, client services, and recruiters. There were also job cuts to the hedge fund's audit groups, which assess employee performance, and the core management team, a management training program founded by Dalio, according to the report.

Bridgewater told the Journal in a statement that "team members will be working more from home so we won't need the same number of support people, new technologies are changing what type of people we need and how we serve our clients, and we also want to become more efficient."

The statement continued: "While this will produce more than normal attrition in terms of people leaving the firm this year it won't be greatly more than normal and we will continue to invest and hire in key areas."

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Bridgewater employees have been working remotely due to the coronavirus pandemic, according to the report. The layoffs occurred in Zoom meetings. Outgoing employees will receive 18 months of healthcare, extra months of severance, a prorated annual bonus, and outplacement help, the Journal reported. 

The layoffs come during a rough period for the firm, which in March saw the worst monthly performance ever in its flagship Pure Alpha fund as the coronavirus pandemic roiled global markets. Through June, Pure Alpha was down nearly 14%, erasing the last five years of returns, according to the Journal. 

The firm's assets under management have also shrunk to $140 billion at the end of June from $168 billion at the end of 2019, the Journal reported. 

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• Legendary hedge fund manager Ray Dalio said that the stability of the US dollar is under threat as tensions between Beijing and Washington could lead to a "capital war." 
• In an interview with Fox News, Dalio said if the US government bans investments in China or withholds bond payments on Chinese debt, that could lead to big declines for the US economy.
• "There's a trade war, there's a technology war, there is a geopolitical war and there could be a capital war," he said.
• On Monday, the dollar index fell to a multi-year low, dropping 0.5% to its lowest level since 2018. 
• Visit Business Insider's homepage for more stories.

Billionaire investor Ray Dalio has warned that escalating tensions between the US and China could lead to a "capital war" with major repercussions for the value of the dollar.

Dalio, the founder of investment management firm Bridgewater Associates, said on Fox News' "Sunday Morning Futures" that both countries are currently in an "ideological civil war" and if they didn't work together, the US economy would decline. 

"We are in conflict with China. You can call it a war," Dalio said. "There's a trade war, there's a technology war, there is a geopolitical war and there could be a capital war."

He went on to say that if the US government bans investments in China or withholds bond payments on Chinese debt, it would become more problematic for the US economy.

"If you say, by law, don't invest in China or even possibly withholding the payment of bonds that the United States owes payment on in China, these things are possibilities and they have big implications such as for the value of the dollar because investors, premarket investors, are not used to having those things dictated by the government," he said.

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He said he is most worried about the "soundness" of US money because it is currently its own worst enemy.

"We are our own worst enemy, so how we deal with each other soundly and productively in a way that most people in the country believe is fair is going to determine our future."

Dalio recently warned of armed conflict between the two global powers, as he drew comparisons between the current economic tensions and the years before World War II. 

In the most recent geopolitical offensive, China ordered the closure of a US consulate in the city of Chengdu, just days after US ordered the closure of a Chinese consulate in Houston.  

On Monday, the dollar fell to a multi-year low and analysts expect it to weaken further against major currencies. 

The dollar index, a measure relative to other foreign currencies, fell as much as 0.5% to its lowest level since 2018.

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• Double-digit losses in a flagship hedge fund, an arbitrator finding that it made up evidence, a lawsuit from a former executive: 2020 has been painful, even for the world's largest hedge fund.
• Last week, Bridgewater laid off dozens of people, and former co-CEO Eileen Murray is suing the firm for millions that she says she is owed but not getting because she disclosed her gender discrimination claims to a third party.
• Earlier this month, an arbitration proceeding between Bridgewater and the founders of a small hedge fund became public — showing how the world's biggest hedge fund manufactured evidence against the small fund and ultimately lost.
• Visit Business Insider's homepage for more stories.

Life is typically pretty good for Ray Dalio.

The billionaire founder of Bridgewater Associates, the largest hedge fund in the world, has a net worth nearing $20 billion, is one of the most respected commentators on the markets in the world, and became a best-selling author thanks to his "radical transparency" corporate culture.

But even he hasn't been spared from 2020's wrath.

See more: Ray Dalio's Bridgewater Associates reportedly lays off dozens of employees

Dalio has had to deal with poor performance in one of his flagship Pure Alpha funds, layoffs, and lawsuits from former executives and employees while a global pandemic rages on.

The poor performance caused assets at Bridgewater to fall 15% from the beginning of February to the end of April, according to SEC filings, from $163 billion to $138 billion.

Of course, that hasn't stopped people from wanting to get into the Greenwich-based asset manager's funds. Anthony Scarmucci's Skybridge Capital for instance is pumping $100 million into Pure Alpha, despite the rocky start to the year for the long-running fund, according to an earlier report from Bloomberg.

Below is a rundown of Bridgewater's challenges so far in 2020. 

SEE ALSO: These 5 slides from a small hedge fund's pitchdeck were at the center of a legal fight with Ray Dalio's Bridgewater — and it shows the lengths the billionaire went to in a losing battle

SEE ALSO: Investors are pouring billions into hedge funds in an attempt to ride the market's resurgence. Here's how firms are responding to spiking interest and sky-high expectations.

Poor performance in Pure Alpha

In March, Dalio told investors that the firm's risk-control protocols worked as designed, despite the fact that several funds, such as All-Weather and Pure Alpha, fell double-digits. 

"While it's not what I would want, it's similar to what I would have expected under the circumstances," he said after global markets tanked at the end of the first quarter.  

But months later, after the markets and competing hedge funds have rebounded, Pure Alpha is still down more than 13% on the year. The average hedge fund lost 3.5% in the first half of the year, according to Hedge Fund Research. 

See more: Read the 2-page note billionaire Ray Dalio just sent investors laying out his coronavirus game plan

He wrote in March that the firm used a similar playbook to 2008, with zero percent interest rates triggering a slew of defensive moves. The Fed has held rates near zero and millions remain out of work thanks to the pandemic, but the markets have been incredibly optimistic about the recovery of the economy. 

In the second quarter alone, the S&P 500 surged more than 20%, and many hedge funds have ridden the wave to get back in the black for the year. 

Eileen Murray's lawsuit

Eileen Murray, the former co-CEO of Bridgewater and current chair of FINRA, told a conference audience in late 2019 that she planned to do something she was passionate about after leaving Bridgewater.

Murray, who was rumored to be in the running for the top job at Wells Fargo, is now suing Dalio for tens of millions in withheld compensation. Her claim states that the firm is not paying her because she disclosed her gender discrimination complaint to a third party, according to the suit filed Friday in Connecticut's federal court.  

See more: Outgoing Bridgewater co-CEO Eileen Murray hints at her next moves and explains how she smashed the hedge fund world's glass ceiling

Her suit also states that Murray's departure from Bridgewater feeds into claims against the firm of "gender discrimination, unequal pay, and breach of contract."

In a statement, Bridgewater says "there is a big difference between accusations and realties, particularly when millions of dollars are at stake. We have mutually agreed upon, legally sanctioned ways of resolving disputes with mutually agreed upon, objective parties hearing the cases and making the decisions. We're confident the process will confirm that these claims have no merit. We also have a long standing policy of resolving disputes without trying them in the media where sensationalism can stand in the way of getting at the truth. "

Tekmerion arbitration reveals a Bridgewater loss

Tekmerion Capital founders Lawrence Minicone and Zachary Squire, pictured above, had already begun the process of starting their own fund before they were on the radar of the legal team at their ex-employer. 

The former Bridgewater analysts were embroiled in a years-long legal battle with Dalio and his team over trade secrets and more that ultimately resulted in the world's largest hedge fund losing. The arbitration decision spilled into public view after Minicone and Squire asked a court to confirm that Bridgewater owed them $2 million in legal fees. 

The arbitration finding states that Bridgewater manufactured evidence against the young fund, and co-CIO of Bridgewater Greg Jensen is quoted in the finding saying he didn't have hard evidence that Tekmerion stole trade secrets.

"I don't have any other evidence. I don't need any other evidence," Jensen is quoted as saying.

See more: These 5 slides from a small hedge fund's pitchdeck were at the center of a legal fight with Ray Dalio's Bridgewater — and it shows the lengths the billionaire went to in a losing battle

The hedge fund told Business Insider it was appealing the arbitrators' decision that the fund has to pay for Minicone and Squire's legal fees and pointed to the opinion of the one arbitrator who dissented from the case. That arbitrator said the majority's findings were an "incomplete, inaccurate and one-sided summary of the evidentiary record."

Dozens of layoffs to different teams

Last week, it was reported that "dozens" of layoffs hit different teams at Bridgewater. Research, recruiting, client services, and more were all affected.

The Wall Street Journal noted in its story that some people went into Zoom meetings expecting to do their mid-year review and were fired. 

In response to the Journal, the firm said that "team members will be working more from home so we won't need the same number of support people, new technologies are changing what type of people we need and how we serve our clients, and we also want to become more efficient."

The statement also noted that the lay-offs will increase the attrition rate beyond normal for the year, but that the firm is still planning to hire and invest in key areas.

• Billionaire Ray Dalio's hedge fund invested more than $400 million in gold in Q2. 
• 13F filings show his Bridgewater Associates firm piled into two of the world's largest gold-back ETFs: The iShares Gold Trust and the SPDR Gold Trust. 
• Bridgewater's holding in the SPDR Gold Trust alone is now worth $914.3 million, up from closer to $600 million in Q1. 
• Gold prices have risen 26% since the start of the year, and hit record highs. 
• Visit Business Insider's homepage for more stories.

Billionaire investor Ray Dalio's hedge fund poured more than $400 million into gold in the second quarter of this year, as the price rallied towards record highs, luring in high-profile and amateur investors alike.

Bridgewater Associates, which Dalio founded in 1975, increased its investment in gold through the world's largest largest exchange-traded funds, (ETFs), according to a 13-F regulatory filing the company made late on Wednesday.

Bridgewater raised its holdings in the SPDR Gold Trust from $600.6 million to $914.3 million, making it one of the largest investors in the fund, according to data from Bloomberg. The fund's holding in SPDR is now its second-most valuable.

The company increased its holding in the iShares Gold Trust from $176 million to $268.4 million. This investment is now Bridgewater's sixth biggest stake, up from ninth the previous quarter.

ETFs are a common vehicle that investors use to gain exposure to the underlying gold price, without having to take delivery of, or store the metal themselves. The fund issues shares that are then backed up by physical gold.

With the rally in the gold price, investors have piled into ETFs at break-neck speed this year. ETFs around the world now own more gold than the German central bank, the world's second biggest holder of bullion after the US. 

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Bridgewater's total portfolio was worth $5.96 billion by the end of Q2, up by around $1 billion since the first quarter.

SPDR Gold is the world's largest gold-backed ETF, boasting 1,251 tonnes of gold, or around 40.21 million ounces, in holdings.

The iShares Gold Trust is the second biggest, with around 16.1 million ounces in holdings.

Gold has faced a roller coaster journey all year, hitting record highs above $2,000 an ounce. 

Gold's volatile journey since July 

Gold broke the $2,000 mark for the first time ever at the start of the month.  The price has gained more than 26% so far this year, making it one of the best-performing commodities and outpacing several peers, even the tech-heavy Nasdaq.

After appearing unstoppable, the gold price tumbled by the most in a single day in seven years on Tuesday, as analysts warned the rally was overextended and investors secured profits.

Gold, which has profited all year from a weaker dollar, got another boost in late July when diplomatic relations worsened between US and China.

The US government is expected to agree another multi-billion dollar stimulus package to help Americans struggling to cope with the economic devastation of the coronavirus pandemic. This will likely weigh further on the dollar and depress US borrowing rates, as Washington seeks to keep credit cheap.

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As gold does not yield a return, it makes it more attractive for would-be savers to hold it, as they end up sacrificing a lower return than they normally would when rates are high. 

Gold is currently trading at $1935.69, 1.1% higher as of 7:20 am. ET.  On Tuesday, it crashed by over $100, its biggest one-day loss since June 2013. 

But while gold's decline this week initially caught traders off guard, the outlook for the market remains bright.

Analysts told Business Insider that despite Tuesday's near-6% drop,  several factors factors such as the weaker dollar and growing geopolitical uncertainty suggest gold has more room to rally.

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• Bridgewater Associates, the largest hedge fund in the world, released in an SEC filing what investments it bought and sold in the second quarter on Wednesday.
• The hedge fund, founded by billionaire investor Ray Dalio, exited positions in a number of exchange-traded funds and Canadian banks amid the coronavirus pandemic recovery. 
• Here are the top five investments that Bridgewater Associates dumped last quarter. 
• Read more on Business Insider.

The largest hedge fund in the world, Bridgewater Associates, dumped a number of investments in the second quarter as the coronavirus pandemic recovery raged. 

The hedge fund, founded by billionaire investor Ray Dalio, exited 153 holdings entirely and decreased holdings in 177 investments in the second quarter, according to a Wednesday Securities and Exchange Commission filing.

A majority of the positions that the firm exited were exchange-traded funds that track Treasury bonds, high-yield corporate debt, and emerging markets. Bridgewater also dumped shares of a number of Canadian banks during the quarter. 

On the flip side, the firm also added to its portfolio during the quarter, boosting its total value to $5.96 billion, a roughly 18% jump from the previous three-month period. Bridgewater bought 137 new holdings and added to 68 existing positions, including plowing nearly half a billion dollars into gold.

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Here are the top five holdings that Bridgewater exited in the second quarter, according to a list compiled by Bloomberg: 

1. iShares Barclays 20+ year Treasury Bond ETF

• Ticker: TLT
• Shares sold: 1.69 million
• Market value: $279.1 million 

2. iShares iBoxx High Yield Corporate Bond ETF

• Ticker:HYG
• Shares sold: 1.49 million
• Market value: $115.2 million 

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3. iShares JPMorgan USD Emerging Markets Bond ETF

• Ticker: EMB
• Shares sold: 812,571
• Market value: $78.6 million

4. Royal Bank of Canada

• Ticker:RY
• Shares sold: 465,072
• Market value: $28.6 million 

5. Toronto-Dominion Bank

• Ticker:TD
• Shares sold: 593,053
• Market value: $25.1 million 

Read more:'We are going to pay the price': Famed investor Jim Rogers sounds the alarm on central bank money-printing and exorbitant debt — and warns the next market meltdown will be 'the worst in my lifetime'

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Billionaire investor Ray Dalio is known for his "principles" on everything from power dynamics to calling for "reform capitalism" in America. He authored a best-selling book, "Principles: Life and Work," which elaborates on his core philosophies and the lessons throughout a more than 40-year career — from building the world's largest hedge fund to now passing on what he's learned. 

Dalio draws inspiration from more than just his own ruminations. He's fond of reading and scouring through interviews, and he's often vocal about turning to books for advice. 

Dalio's recommendations range from books on history to politics to psychology to offer a comprehensive look into the investor's worldview. 

Whether you're a college student trying to figure out your next steps, an experienced investor looking for a career boost, or even just looking to find an interesting read to add to your library, Dalio recommends that you find answers and glean meaning from these 15 books. 

SEE ALSO: Ray Dalio says anyone who wants to understand today's world should read a 32-year-old book about empires

“The Rise and Fall of the Great Powers” by Paul Kennedy

Dalio thinks this is an important read if you're looking to better understand the hegemonic shifts between the US and China. He told Business Insider in a 2019 interview it's the best thing he'd read. 

Author Paul Kennedy tracked the arc of world powers since 1500 and drew parallels in how leaders rise and fall over five centuries. Each power mentioned in the book fell due to over-investment in military spending and a lack of attention toward other aspects of society like education and income inequality.

Dalio noted that the US could face a similar predicament if leaders don't treat inequality as a "national emergency,"Business Insider reported. Dalio read this book to understand where we are in history — predicting that US power will eventually decline while China expands. 

"That dynamic has happened many, many times in history," he said, "and understanding that well, I think is very important."

Get it here »

“The Hero with a Thousand Faces” by Joseph Campbell

Joseph Campbell's 70-year-old mythology book helped Dalio process and reframe his business and personal failures, he told Business Insider. 

"The Hero with a Thousand Faces" outlines the phases of a hero's journey — it shows how many mythologies, folk tales, and religious narratives follow a similar story structure, including a call to adventure, a descent into the underworld, and a comeback into society. 

Dalio's son Paul gave him this book in 2014, and he immediately identified with it, he wrote in his book. The Bridgewater chairman used Campbell's roadmap of a hero's journey to understand where he is along that path, and what he should do next. 

Get it here »

"The Lessons of History” by Will and Ariel Durant

In "Principles," Dalio described "The Lessons of History" as a 104-page distillation of the major forces through history.

The book was published in 1968 by a Pulitzer Prize-winning husband-and-wife duo that studied thousands of years of Western history. This work tracks the cycles of history, and Dalio writes that it shows "how the same things happened over and over again throughout history."

Get it here »

“An Unquiet Mind” by Kay Redfield Jamison

In his book, Dalio wrote that his son Paul struggled to manage his bipolar disorder for three years. Dalio came across Jamison's "An Unquiet Mind" while seeking answers to better understand his son's battle with mental illness. His personal experience taught him that many mental differences are physiological.

"The experience not only taught me a lot about how brains work but why creative genius often exists at the edge of insanity," Dalio writes in "Principles." He then lists creative, productive people who have bipolar disorder, including Kay Jamison, the author of this book.

Jamison "has written frankly about her own experiences with the disease in her book 'An Unquiet Mind,'" Dalio writes.

Get it here »

"Super Mind: How to Boost Performance and Live a Richer and Happier Life Through Transcendental Meditation" by Norman E. Rosenthal

Dalio has meditated every day since 1969, CNBC reported. The practice has had a huge impact on him. 

"It gives you an equanimity, a centeredness, a calmness — so that you can thoughtfully deal with things in a better way without being emotionally hijacked," Dalio told CNBC. 

He recommended "Super Mind," a psychiatrist-written book on the benefits of transcendental meditation. The book discusses how regular meditation can result in greater productivity, emotional resilience, and, ultimately, success. 

Get it here »

“River Out of Eden” by Richard Dawkins

In an episode of Tim Ferriss' podcast, Dalio said he thinks evolution is "the greatest force in the universe."

In "River out of Eden," author and biologist Richard Dawkins drew similarities between DNA-coded information and computer language, in which we are all "survival machines" looking to carry on our genetic makeup and the "database" we carry. 

"I think the purpose of everything is to evolve,"Dalio said in the podcast. "I think individuals are just vessels for our DNA evolving."

Get it here »

“Originals: How Non-Conformists Move the World” by Adam Grant

Adam Grant of the Wharton School has written extensively about Bridgewater and the unique way Dalio runs it.

In "Originals," Grant focused on how leaders can build on their ideas and how to fight groupthink. He gave examples of individuals who experienced success after challenging a norm or approached a business decision in an unusual way. 

Grant was one of a number of behavioral psychologists who went to Bridgewater to evaluate their operational style and concluded that Dalio's "unusual" leadership style was necessary to its growth.

Get it here »

“Thinking, Fast and Slow” by Daniel Kahneman

Kahneman, a psychologist who won the Nobel Prize in economics, breaks down human thought into two systems: the fast and intuitive "System 1," and the slow and deliberate "System 2."

His book brings an awareness to when we can and can't trust intuition, and how can make the best choices professionally and personally. The author added we are easily influenced by our surroundings and often automatically respond to things without much filtering.

"Thinking Fast and Slow" lays out the framework of cognitive biases that affect our everyday behavior, from halo effects to planning fallacies.

Get it here »

“Beyond Religion: Ethics for a Whole World” by the Dalai Lama

In his book, Dalio reminisced about a conversation he had with the Dalai Lama about the overlap between spirituality and religion. 

"His view was that prayer and meditation seemed to have similar effects on the brain in producing feelings of spirituality (the rising above oneself to feel a greater connection to the whole)," Dalio wrote, "but that each religion adds its own different superstitions on top of that common feeling of spirituality."

Get it here »

“Welcome to Your Brain: Why You Lose Your Car Keys but Never Forget How to Drive and Other Puzzles of Everyday Life” by Sam Wang and Sandra Aamodt

This is the first book listed in Dalio's bibliography in "Principles."

Coauthors and neurologists Sandra Aamodt and Sam Wang outlined brain processes and addressed common questions we've probably all thought of.

By offering explanations to random questions like whether drinking alcohol kills cells or whether a head injury can make us forget our names, "Welcome to Our Brain" serves as a myth-dispelling guide on how our brain works.

Get it here »

“Einstein's Mistakes: The Human Failings of Genius” by Hans C. Ohanian

The title "Einstein's Mistakes" by Hans Ohanian is really as on the nose as it sounds. Dalio read this book in 2011 and explained that reading the analysis of Albert Einstein's failures taught him to learn from his mistakes rather than being stuck on them. 

Einstein's pitfall, according to Ohanian, is that people gifted with a genius mind naturally have a more difficult time believing or accepting that they're wrong. They become blind to their mistakes, and if they are stubborn, cling to a mistake forever without correcting it.

Get it here »

“My Stroke of Insight: A Brain Scientist's Personal Journey” by Jill Taylor

This New York Times best-seller was included the bibliography of "Principles." It describes how a brain scientist's stroke 24 years ago led to her enlightenment.

Though it took eight years to fully recover from the impairment in the left hemisphere of her brain, Taylor wrote that the stroke led to greater access to her intuitive right brain, where she felt "well-being and peace."

Get it here »

“The Undoing Project: A Friendship That Changed Our Minds” by Michael Lewis

"The Undoing Project" by Michael Lewis delves into the partnership between Daniel Kahneman (whose book "Thinking Fast and Slow" also appears on this list) and Amos Tversky, two psychologists who pioneered the field of behavioral economics. Despite having drastically different personalities, Kahneman and Tversky worked together and developed a fruitful partnership. 

Lewis explored the workings of the human mind in looking at how people with fundamental differences can still become great collaborators. 

Get it here »

“The Upside of Inequality: How Good Intentions Undermine the Middle Class” by Edward Conard

Dalio has voiced his concerns about the state of America, and said that inequality is an urgent problem. According to Dalio, inequality should be treated as a "national emergency," and this book explores the nuances of inequality as it relates to the middle class.

In "The Upside of Inequality," author Edward Conard argues that the success of the world's top 1% can push upward pressure on employment rates in the US. He tracks data on the American economy and proposes that a good way to bridge income gaps involves training and retraining talent to fit relevant jobs in today's day and age. 

Get it here »

"The Power of Habit: Why We Do What We Do in Life and Business" by Charles Duhigg

Dalio thinks this is a critical read for leaders who want to create healthy habits, especially ones that stick. The "Power of Habit" by Charles Duhigg uses scientific findings to describe why habits exist and how they can be changed.

The book says that the key to achieving successful habits, like exercising regularly, spending less money on takeout, and becoming an early riser, is to understand how habits work. 

Dalio credits this book for teaching him how to develop new, more productive habits, while also ditching ones that are harmful.

"If you really want to change, the best thing you can do is choose which habits to acquire and which to get rid of and then go about doing that," Dalio wrote in a blog post for LinkedIn.

Get it here »

Sherin Shibu and Tat Bellamy Walker contributed to an earlier version of this post. 

• Ray Dalio told Top100funds.com that a Joe Biden win will be a "negative initially" for markets but won't be bad in the longer term. 
• The founder of Bridgewater Associates explained: "It's all a matter of money and spending." 
• Dalio said that markets will do well in the long term if Biden were to raise spending, because this would depreciate the dollar and cause other assets like stocks to rise. He said this happened in the 1930s under President Roosevelt.
• He added: "A Trump win I think would probably produce an initial beneficial reaction, probably longer, a little bit less. "

•  Visit Business Insider's homepage for more stories.

Billionaire investor Ray Dalio said that a Joe Biden victory will be "a modest negative initially" but won't be bad for markets in the long run, while a Trump victory will produce an initial beneficial reaction, but "a little bit less" in the longer term.

The founder of the world's largest hedge fund explained in an interview with Top 1000 Funds released on Tuesday: "It's all a matter of money and spending."

Dalio said that if Joe Biden wins the presidency in November, the initial market reaction will most likely be "not good." Corporate tax rates will rise, capital gains rates will rise, and offshore income will be taxed more. And then, there will be large fiscal stimulus, he said.

The markets would then react positively to the stimulus, but Dalio said that would really be because "the value of money is going to go down — that's what makes everything go up."

"We look at markets through the lens of a currency and so we judge everything on whether it goes up in that currency. But we sometimes make the mistake of not realizing that sometimes those things going up are really because the currency is going down, Dalio said.

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"When you print a lot of money and you produce a lot more debt, it makes it an unattractive asset. And so what we've seen is other assets – stocks, gold and so on – rise as real interest rates have gone down."

Dalio also said that the Biden administration will implement policies similar to the Roosevelt administration in 1933. Roosevelt raised taxes through the marginal tax rate, but at the same time raised deficits and "spent a lot," which deprecated the value of money. 

Even though the value of money had gone down, " the stock market went up and the bond market went up because the deficits and the printing of money and the fiscal stimulation," the billionaire investor said.

When asked what a Trump victory would mean for markets, Dalio said: "A Trump win I think would probably produce an initial beneficial reaction, probably longer, a little bit less. Capitalists like capitalists and capitalism … Either way you're going to get a lot of stimulation, you'll just get more with Biden."

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• Billionaire investor Ray Dalio told Bloomberg that the US is in a period of "great risk" because of rising deficits and the uncertainty around the upcoming US election. 
• The most important thing investors can do to manage this risk is to diversify their portfolios by asset class, country, and currency, he said. 
• "Diversification is a wonderful, mechanical, good way to reduce risk without reducing expected return," the founder of Bridgewater Associates added.

•  Visit Business Insider's homepage for more stories.

Ray Dalio told Bloomberg on Tuesday that the US is currently in a period of "great risk" because of rising deficits and the upcoming election, and the most important thing for investors will be to know how to diversify well.

The founder of Bridgewater Associates said if there's no clear winner of the election and no agreed-upon way for concluding the winner, "you could start to see bad things happening."

A situation where "power politics" and different states get involved could become an "extreme risk," he added. "It exists as a possibility. I'm not saying what the probability is, but it's a major thing."

Dalio added that in either outcome of the election, there will be "very large deficits going forward."

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The most important thing investors can do to manage this risk is to diversify by asset class, country, and currency, Dalio said. He suggested gold and inflation-indexed bonds as good diversification tools, and suggested more global holdings for investors with all their assets in the US.  

The investor who founded the world's largest hedge fund added that diversification can be achieved with no costs.

"Diversification doesn't cost you anything. Because when your asset classes are going to — if you balance them right — have approximately equal expected risk-adjusted returns, so you can balance them, because they all compete with each other, so not one is necessarily clearly better," he said.

He added: "Diversification is a wonderful, mechanical, good way to reduce risk without reducing expected return." 

And investors shouldn't subscribe to the "dangerous bias" that the past is representative of the future, he said. "If you go through history, when you have some of these conflicts, you might have a different result."

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• The billionaire investor Ray Dalio has argued that "everybody is underweight on China" and that what he calls the "right type of balance" investing in the country can yield positive results. 
• "Our approach is — we call it the all-weather approach — it's a certain balance in which you achieve balance without lowering the expected return. From that, you want to make the tactical moves," he told CNBC.
• Dalio says the Chinese yuan will gain use outside China in the face of a weaker US dollar. 
• He also says Indian markets provide potential, though with less liquidity.
• Visit Business Insider's homepage for more stories.

The billionaire investor Ray Dalio told CNBC's "Street Signs Asia" on Wednesday that "everybody is underweight on China" and that he believes investing in the country with the "right type of balance" can yield positive outcomes.

"I think almost everybody is underweight on China if you look at any of the benchmarks relative to world capitalization," Dalio, the cofounder of the hedge fund Bridgewater Associates, said.

"The first move is to get exposure to China in a diversified portfolio," he said. "That means to achieve the right kind of balance of assets in China. Our approach is — we call it the all-weather approach — it's a certain balance in which you achieve balance without lowering the expected return. From that, you want to make the tactical moves."

Dalio said China's currency, the yuan, might be more actively used outside China at a time when the US dollar — the world's reserve currency — and other major currencies had taken a beating with economic growth struggling.

"It's a natural consequence," he said, "because as the dollar and the major reserve currencies are having the challenges that we are talking about, some element of void will be there."

The US Dollar Index, which tracks the strength of the greenback relative to a basket of currencies, has lost about 7% in the past six months. In the same time, the Chinese central bank has allowed the yuan to rise by about 4% against the dollar. The current exchange rate is roughly 1 dollar per 6.8 yuan.

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Dalio acknowledged tactical investments would shift over time.

"And of course those change, depending on the relative pricing of assets, classes and so on. But first ... get the exposure, I believe, to those markets and the currency too," he said.

Major Chinese indexes have risen in recent months underpinned by a recovery from the COVID-19 pandemic and low cases of the virus. China's Shanghai Composite is up 6% this year. By way of comparison, the S&P 500, which hit an all-time high in September, has risen 4% in 2020.

Dalio sees investing opportunities outside China in the region but says many countries, such as India, are lagging behind.

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"There's much less liquidity in those markets," he said.

He said India boasted many "cutting-edge technologies" but was tougher to invest in.

"If there was a much greater development of the capital markets, more liquidity, more opening up of those markets, that would revitalize entrepreneurship," Dalio said. "Being able to raise money in that way and circulate money in a more efficient way would revitalize the Indian economy."

India has recorded the second-most coronavirus cases in the world — nearly 7 million — behind only the US. India has also recorded more than 104,000 COVID-19 deaths.

India's gross domestic product shrank by 23.9% in the April-to-June quarter.

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• Legendary investor Ray Dalio told CNBC on Wednesday that Trump's halting of stimulus talks will be a "significant negative" for the economy.
• The absence of what could have been nearly $2 trillion of stimulus will cause "a lot of stress" on "those who are not going to get the money," he said.  
• The founder of Bridgewater Associates also said that he agreed with Fed Chair Powell's statements that the failure to pass an adequate and timely stimulus could give way to a "weak recovery" in the economy.

• Visit Business Insider's homepage for more stories.

Legendary investor Ray Dalio said the delayed stimulus will be a "significant negative on the economy," following President Trump's decision to halt negotiations for a deal until after the election. 

"That's a lot of money, whatever it would have been," Dalio said in a Wednesday interview with CNBC. Lawmakers were negotiating a plan that could have provided between $1.6 trillion and $2.4 trillion of aid. Dalio said the absence of stimulus will cause "a lot of stress" on "those who are not going to get the money."

The founder of Bridgewater Associates also said that he agreed with Federal Reserve Chairman Jerome Powell, who said Tuesday morning that that failure to pass an adequate and timely stimulus could give way to a "weak recovery" in the economy.

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Both monetary support from the Fed and fiscal support in the form of stimulus is necessary for the economic recovery, Dalio said. The Federal Reserve helps financial markets, "but it doesn't do the trick in terms of providing the income, the spending, and the targeted money getting it in the hands of who needs it the most."

According to Dalio, the most important thing investors can during this "particularly risky period" is to diversify their portfolios over countries, asset classes, and currencies — and avoid cash.

"There's an instinct to think that cash is the lowest risk asset, because it has less volatility and because we look at everything through the lens of cash," the investor said. "But you don't realize that when there's so much a production of cash, and so much a production of debt, that it does poorly relative to other asset classes."

"It is not a safe investment ... diversification is much better than cash," he added.

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• Billionaire Ray Dalio told Bloomberg that investors should buy Chinese bonds regardless of who wins Tuesday's election. 
• The Bridgewater Associates founder said no matter who's the next president, the US will run larger deficits and sell more debt, causing global investors who are overweight in US bonds to diversify into China. 
• "I'd much rather own Chinese bonds than US bonds," Dalio said, citing a Chinese currency benefit from increased capital flows.
• Visit Business Insider's homepage for more stories.

Billionaire hedge fund manager Ray Dalio told Bloomberg on Monday that the world is "structurally underweight China" and investors should buy Chinese bonds for diversification no matter the outcome of the US election. 

The Bridgewater Associates founder said that regardless of who wins the presidency, the US will run larger deficits and sell more debt, according to Bloomberg. This will cause global investors who are overweight in US bonds to diversify into China. 

Citing the favorable capital inflows in China, he said: "I'd much rather own Chinese bonds than US bonds." China's 10-year government bonds yield over 3%, while US treasuries yield less than 1%. 

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Dalio also said he understands the need to have a "significant portion" of a portfolio in China: "The interest-rate differentials are favorable. The growth rate differentials are favorable," he said. 

He added that the Renminbi, the Chinese currency, will become a reserve currency faster than many investors expect. 

"I don't believe the renminbi will be a viable reserve currency quickly," Dalio said. "But I do believe it will happen much faster than anybody expects."

SEE ALSO: Leaked documents show Universa Investments made a 105% annual return on capital from 2008 to 2019. Here's a behind-the-scenes look at its 'tail-risk hedging' strategy pioneered by 'Black Swan' investor Nassim Taleb.

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• Ray Dalio, founder of the world's largest hedge fund Bridgewater Associates, lent support on Wednesday for China's sudden decision to suspend Ant Group's historic $37 billion listing.
• Dalio said there's a risk of being too lax on innovation since Ant is a "whole new concept in terms of banking."
• He also said not investing in China would be hugely risky, because a lot of money-printing in the US is threatening the dollar's reserve status.
• Dalio, who has long advocated going all-in on China, said "people have accused me of being biased, naive, and in some cases unpatriotic. I think I'm just being objective."
• Visit Business Insider's homepage for more stories.

Hedge fund legend Ray Dalio showed support on Wednesday for China's sudden suspension of Ant Group's record-breaking $37 billion public listing, saying the regulatory decision was reasonable.

The suspension was a huge blow for Ant Group and boss Jack Ma, as the company hit a hurdle after a series of new regulations clamped down on its lending business.

Dalio, the founder of Bridgewater Associates, said the sudden pulling of the IPO should not hurt investor confidence, as there may be a risk of being too flexible on innovation.

"Ant is a whole new concept in terms of banking, and almost could replace or threaten the banking system in China. And it hasn't yet been properly established in terms of regulatory review and the like," he said at a virtual China Town Hall conference on Wednesday.

Ant was ready to shatter records with its IPO, which was touted as the largest in history, and the potential listing positioned the Chinese fintech as a disruptor in the banking sector. 

"And it's important to be clear that what we have in China is state capitalism. So the state is going to control those things," Dalio said, describing regulators in the world's second-largest economy as "reasonable, caring, and highly-informed."

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The investor who founded the world's largest hedge fund also said that not investing in China would be "very risky." After researching the rising and falling trends of reserve currency empires over the last 500 years, Dalio reckons that China is evolving into one.

"To be absent [from] the Chinese capital markets is very risky," Dalio said, adding that "the fundamentals are undermining the US dollar."

The US is "creating a lot of debt and printing a lot of money, which in history was a threat to reserve currencies," he said.

Dalio, who has long been an advocate of going all-in on investment in China, said "people have accused me of being biased, naive, and in some cases unpatriotic. I think I'm just being objective."

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• Ray Dalio tweeted on Tuesday he "might be missing something about bitcoin," and that he sees a handful of reasons why it can't serve as an effective currency.
• Bitcoin's wild volatility diminishes its use as a medium of exchange and as a store of wealth, the billionaire hedge fund manager said.
• Even if the cryptocurrency becomes successful enough to compete with central banks' currencies, governments will ban bitcoin and "make it too dangerous to use," he added.
• Bitcoin traded above $17,000 for the first time in three years on Tuesday as its fall rally surged on.
• Watch bitcoin trade live here.

Billionaire investor Ray Dalio admitted on Tuesday he "might be missing something about bitcoin," and still sees plenty of reasons why it can't serve as a reliable currency.

The world's most popular cryptocurrency ripped above $17,000 to a three-year high on Tuesday as its fall rally continued. Bitcoin began surging higher in October after PayPal announced it will allow users to buy, sell, and hold the token. Crypto bulls cheered other firms' adoption of the digital currency, but Dalio remains skeptical bitcoin can serve such a purpose.

For one, bitcoin is "too volatile for merchants to use," the Bridgewater Associates founder said in a tweet.

The token also isn't "very good as a store-hold of wealth because it's volatility is great and has little correlation with the prices of what I need to buy," he said. Owning bitcoin does nothing to protect buying power, Dalio added.

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Even if bitcoin becomes successful enough to replace central bank currencies, governments will likely ban the cryptocurrency "and make it too dangerous to use," Dalio tweeted. Central banks including the Federal Reserve are researching the possibilities of a central bank-issued digital currency, but the decentralized nature of bitcoin and other cryptocurrencies has long been critiqued as an easy way to fund illegal activities.

Dalio also doubts that central banks, institutional investors, businesses, or multinational corporations would ever buy large amounts of bitcoin to hold as a reserve asset. 

Still, the billionaire investor told his roughly 515,600 followers that, if he's "wrong about these things," he's open to being corrected.

Bitcoin traded at $17,797.48 as of 12:55 p.m. ET Tuesday, up 146% year-to-date.

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• Ray Dalio told investors to not own bonds or cash in an interview at the Bloomberg New Economy Forum on Tuesday.
• The Bridgewater Associates founder explained that central bank policy has "changed the economics of borrowing."
• "In my opinion, don't own bonds, and don't own cash because they're producing a lot of debt and producing a lot of money to fund it, and so that's changing the nature of capital flows," said Dalio. 
• He told investors to diversify between currencies, asset classes, and countries because it's the best way to reduce risk without reducing opportunity.
• Visit Business Insider's homepage for more stories.

Billionaire investor Ray Dalio told the Bloomberg New Economy forum on Tuesday that diversification is one of the most important portfolio strategies, but investors shouldn't own bonds or cash right now. 

The Bridgewater Associates founder explained that the capacity of central banks to print money and buy financial assets has "changed the economics of borrowing."

"In my opinion, don't own bonds, and don't own cash because they're producing a lot of debt and producing a lot of money to fund it, and so that's changing the nature of capital flows," added the investor, who claimed back in January that "cash is trash."

Dalio suggested instead that investors diversify between currencies, asset classes, and countries as the best way to reduce risk without reducing opportunity.

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Dalio's advice to stay out of bonds comes as interest rates remain at historic lows and investors raise doubts over the traditional 60/40 portfolio composition.  According to research from JPMorgan Asset Management, a portfolio with 60% global equities and 40% bonds is projected to provide an annual return of just 4.2% over the next 10 to 15 years. A year earlier, returns on the same portfolio were projected at 5.4%.

Beyond diversification, Dalio said that liquidity and differentiation should  guide investor portfolios right now. Liquidity allows an investor flexibility to change as "circumstances change," he said.

Dalio also guided investors to differentiate between companies and countries that are "orderly and will prosper in this environment" and those that are prone to bankruptcy and disorder. Disorder in a  company or country depends on the entity's income relative to its expenses, and its assets to liabilities. Dalio said differentiation will allow investors to see "radical differences in financial consequences." 

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• Investing legend Ray Dalio's hedge fund poured millions into Alibaba, Walmart, and Coca Cola, and sold some positions in Chinese equity ETFs in the third quarter this year.
• The billionaire also invested heavily in McDonald's, Abbott Labs, Procter & Gamble, and Johnson & Johnson.
• While the fund's largest withdrawal was from an ETF that tracks large-cap US equities, it sold out positions worth several millions in three China ETFs.
• Dalio also pumped over $100 million in two ETFs that track emerging markets.
• Earlier this week, he said investors should not own bonds or cash right now.
• Visit Business Insider's homepage for more stories.

Ray Dalio's Bridgewater Associates poured millions into some of the world's biggest companies and ditched several holdings in China ETFs, according to a 13F filed with the US SEC. 

The investor who founded the world's largest hedge fund now owns a position worth $392 million in Alibaba, $195 million in Walmart, and $100 million in Coca Cola, the filing showed. 

Dalio already owned stock in Alibaba but the other two investments are new. He also invested substantially in McDonald's, Abbott Labs, Estee Lauder, Mondelez, Procter & Gamble, Johnson & Johnson, and Danaher.  

The billionaire, who has long been an advocate of going all-in on investment in China, decreased his positions by several millions in three China ETFs.

His largest decrease, of about $309 million, was made in a fund that tracks large-cap US equities -  IShares Core S&P 500 ETF. He made smaller reductions, between $12 million to $34 million, to holdings in funds that track Chinese stocks. Dalio has previously said that not investing in China is "very risky."

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He also pumped over $100 million in two ETFs that track emerging markets — IShares MSCI Emerging Markets and Vanguard FTSE Emerging Markets.

The investing legend said this week that while diversification is one of the most important portfolio strategies, investors should not own bonds or cash right now. Interest rates on government bonds currently remain at historic lows and investors are raising doubts over the traditional 60-40 portfolio composition.

Instead, he recommended diversifying between currencies, asset classes, and countries as the best way to reduce risk without reducing opportunity. 

Ray Dalio's hedge fund Bridgewater Associates manages about $140 billion in assets as of April 2020.

You can see the investments that Bridgewater Associates bought and sold in the third quarter this year here.

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Add civil war and revolution to the list of consequences that could arise from how the US's fiscal and monetary coffers have been managed in recent years. 

Those severe outcomes are top of mind for Ray Dalio, the billionaire founder and co-chief investment officer of Bridgewater Associates.

His concerns about these worst-case outcomes are grounded in a study of how global empires have evolved over time, from when they emerge as superpowers in a new world order to the downward spiral that eventually forces a political restructuring. 

While Dalio's latest thesis is steeped in historical analysis, it is relevant to the biggest forces driving financial markets today, namely: the pandemic-induced economic crisis, income inequality, deep political divides, and massive government debt. He says these forces — excluding the specific COVID-19 crisis — have broadly been prevalent since the 1930-1945 period, but they have now pushed the US towards the brink. 

In the latest chapters of his ongoing "Principled Perspectives" series, Dalio described five stages that he observed global empires — including the US and China — typically undergo. Each one leads to the other, in his view: 

1. The start of a new order, during which new leadership consolidates power.
2. Systems to allocate resources are created. 
3. Peace and prosperity prevails if Stage 2 is executed well. 
4. There's consequently a build up of excess spending and debt, while wealth and political gaps widen. 
5. Financial conditions worsen and conflict deepens.
6. As a result, civil war or revolution takes place. 

The chart below further illustrates Dalio's progression. 

"When one is in late Stage 5 (like the US is now) the biggest question is how much the system will bend before it breaks," he wrote on LinkedIn. 

In terms of what might 'break' the system, Dalio cites a "classic toxic mix of forces" that consists of: 

• Widespread debt and/or non-debt obligations like healthcare and pensions. As the pandemic developed in Q1, US household debt rose to a record $14.3 trillion, according to New York Fed data.
• Large income and wealth gaps. The US has the highest income inequality among G7 nations, based on the so-called Gini coefficient compiled by the OECD.
• Last but not least in the mix is a severe economic shock. 

Dalio writes that these circumstances are at their worst since the 1930s, and it would be foolish to proceed without considering the consequences in eras gone by.

If this prognosis sounds alarmist or extreme to you, know that even Dalio loaded his work with caveats. 

It's first worth noting that the US maintains monetary sovereignty, meaning that it exclusively mints its own currency and therefore cannot run out of money or default unto itself. That means the biggest concerns about a debt crisis — despite the $27 trillion mountain — may be overblown because of the US' unique status. 

Dalio injects skepticism into his analysis by noting that "hardly anyone" currently expects the US to devolve into civil war. That's because there has only been in one time in the nation's 244-year history when peaceful dialogue failed to resolve the biggest national conflict. 

Despite these caveats, Dalio's message for readers is to not cast the aforementioned threats aside as political or financial theory. In his view, the US is close enough to the worst-case scenario that investors should at least be aware of what may happen next, based on precedents from history. 

"To be clear, I am not saying that the United States or other countries are inevitably headed that way; however, I am saying that now is an especially important time to know and watch the markers in order to understand the full range of possibilities for the period ahead," Dalio said. 

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Last week, Ray Dalio, investor and founder of the world's largest hedge fund Bridgewater Associates, gave away 10,000 "charity gift cards" each worth $100. Anyone could claim a gift card and donate it to their charity of choice. 

All 10,000 gift cards were claimed within two hours, a sign of the massive need many nonprofits find themselves in due to the coronavirus pandemic's economic downturn. 

Now, other leaders in the business community are joining Dalio in his effort to fund another round of giveaways. The list of leaders include Netflix CEO Reed Hastings, Instagram co-founder Kevin Systrom, media mogul and Thrive Global founder Arianna Huffington, and author and podcaster Jay Shetty. 

"I was so happy that so many people signed up, but felt terrible that others were closed out," Dalio said in a social media post. 

The number of gift cards to be made available in this upcoming round has yet to be determined, per a spokesperson for Dalio. The new gift card launch is expected this week. 

For the famed investor, the initiative is a chance to rethink holiday gifting amid a time of dire need. Dalio has previously spoken about inequality in America, saying in an April interview that America's jarring inequality is a "national emergency" that is threatening capitalism.

"Imagine the impact we could have if people started giving each other the ability to donate to their favorite charities rather than giving them useless material stuff," Dalio said in a statement.

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• Investor Ray Dalio hosted a plain-spoken Reddit session on Tuesday at which users had the chance to ask him anything from his outlook for financial markets, to the potential of Bitcoin.
• The billionaire also discussed China's leadership, emphasized the importance of diversification in a portfolio, and how a "flood of money" is lifting asset prices.
• Here are the 10 best quotes from Dalio's "Ask Me Anything" session.
• Visit Business Insider's homepage for more stories.

Hedge-fund manager Ray Dalio hosted a Reddit "Ask Me Anything" session on December 8. In response to Redditors' questions on what he expects for financial markets, he explained why a "flood of money and credit" that's unlikely to recede will lift asset prices.

The self-made billionaire also touched upon his thoughts on Bitcoin, why he admires China's leadership, his concerns over the US economy, and the future of jobs.

Dalio, founder of the world's largest hedge fund Bridgewater Associates, has a net worth of $15.5 billion, according to the Bloomberg Billionaires Index. 

Here are Dalio's 10 best quotes from the Reddit session:

1. "I think that Bitcoin (and some other digital currencies) have, over the last ten years, established themselves as interesting gold-like asset alternatives, with similarities and differences to gold and other limited-supply, mobile (unlike real estate) store holds of wealth."

2. "As far Bitcoin relative to gold, I have a strong preference for holding those things which central banks are going to want to hold and exchange value in when they are trying to transact."

3. "The Chinese leadership is extremely knowledgeable in the lessons of its history and how things work. What I would convey to you and my fellow Americans is that they have a lot of internal disagreement and processes for dealing with it well within the government, so it does exist. Whether or not it is more productive to have the entire population in those discussions is a matter of opinion."

4. "It is a very civilized society that is doing extraordinarily well and is not consistent with the stereotypes that one might believe are true. It is by no means perfect (nor is any other country) and should be open-mindedly assessed based on evidence, rather than emotionally reacted against based on derogatory characterizations."— on what people that ignore China are missing.

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5.  "We are in a flood of money and credit that is lifting most asset prices and distributing wealth in a way that the system that we've come to believe is normal is unable to, and that is threatening to the value of our money and credit."

6. "It is important to diversify well in terms of currencies and countries, as well as asset classes. Internally, this is taking place in a politically and socially threatening environment, which will affect taxes, spending, and how we are with each other. Externally, there will be greater competition, particularly by China."

7. "I think that between now and the mid-term elections in 2022, and between then and the next presidential election in 2024, we will face critical choices both domestically and internationally that will define the likelihood of having an internal and/or external existential conflict."— on the evolution of US leadership.

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8. "I worry that we are our own worst enemies and/or that we collectively aren't willing to make the revolutionary changes that are needed to be on the best path for dealing with our circumstances. However, it is certainly possible that we can get on that path."— on the superpower status of the United States.

9. "My fear, which is turning into a reality, is those countries that are working the hardest are also increasingly finding ways to work the smartest, which is hurting the competitiveness of those who are working less hours and less efficiently."— on the future of jobs and workplace culture.

10. "What is most important is inventiveness — the capacity to get much more out of an hour's work."

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If you're starting a business this year, one of the best ways to learn the ins and outs of entrepreneurship is to read advice from those who have gone before you. 

Whether you need to know how to pitch, get funding, or create an effective company culture, there's a book written by experts who have spent much of their lives helping businesses thrive. To find the best reads out there, we asked founders, business owners, and executives which books they recommend to anyone starting a business.

One of the most frequently mentioned books is "The E-Myth" by Michael E. Gerber, which was originally published in 1986 but remains a timeless staple in business literature. Tim Ferriss, the angel investor and New York Times best-selling author of "The 4-Hour Workweek," is also a popular author among entrepreneurs.

Here are 16 books to read if you're launching a company, want to hone your leadership skills, or need help reaching the next milestone of your business.

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'The E-Myth: Why Most Small Businesses Don't Work and What To Do About It' by Michael E. Gerber

Though it was originally published in 1986, the New York Times best seller "The E-Myth" is one book you'll hear about frequently in today's entrepreneurial world. Its relevance withstands economic changes, thanks to Gerber's expertise in business consulting — Inc. magazine has called him the No. 1 small-business guru.

Ginger Siegel, the North America small-business lead at Mastercard, recommends the book for teaching entrepreneurs that there is more to business than pursuing a passion — in fact, understanding numbers and spreadsheets is very necessary. "Even if you went into the business and love baking cookies or love consulting, you have to know the other side," she told Business Insider. 

Ken Lineberger, the cofounder and CEO of Waters Edge Wineries, a winery franchise based in California, said the book is eye-opening for both new and veteran business owners. "It really changes your paradigm about how you see your role in the business as an owner and how you see your employees," he said. 

Buy the book on Amazon

'Profitable Partnerships: Improve Your Franchise Relationships and Change Your Life' by Greg Nathan

As the CEO of a franchise business, Lineberger said it's common for franchisees to rely heavily on corporate leadership during startup, but once they are running smoothly, they stop seeing value in the relationship. "It doesn't matter if you're McDonald's or Subway or Water's Edge, you go through this evolution as a franchisee where you can start to resent the corporate mothership if you don't get back on track," he said.

That's why he makes "Profitable Partnerships" required reading for all of his franchisees. "I want them to know how to correct it and how do you value the relationship from both sides of it," he said.

Buy the book on Amazon

'The 4-Hour Workweek' by Tim Ferriss

Ferriss' book is a popular choice in self-help, particularly for career success and time management. He puts practicality behind the saying, "Work smarter, not harder," by explaining how he cut his hours from 80 to four per week and earned more money.

Daina Trout, the cofounder and CEO of Health-Ade Kombucha, said the book showed her that the higher up you get in a business, the better it does. It helped her "to push away from being a technician and into a manager, and then to push away from being a manager to a leader," she said.

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'Shoe Dog: A Memoir by the Creator of Nike' by Phil Knight

Another book recommended by Trout is "Shoe Dog," which tells the story of Nike's creator, Phil Knight, who was CEO of the company from 1964 to 2004.

After he graduated business school, Knight borrowed money from his father to sell shoes out of the trunk of his car. His success in building a company with a market capitalization of more than $125 billion set a precedent for startups, sneaker culture, and brand power. 

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'This Is Marketing: You Can't Be Seen Until You Learn To See' by Seth Godin

Adii Pienaar, the vice president of the marketing company CM Commerce, said he found this book fascinating because it explains marketing in terms of finding like-minded people. "It really gets into storytelling and how to think about building a brand in a business and not necessarily trying to be everything for everyone," he said.

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'The Tipping Point: How Little Things Can Make a Big Difference' by Malcolm Gladwell

Though Gladwell's "The Tipping Point" has been around for 20 years, Angela Wator, the owner of the party-supply store Bash Party Goods, said the concepts felt especially relevant today. "I've read it a few times, and I find it really helpful in marketing to millennials and also analyzing my business growth," she said. 

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'Start With Why: How Great Leaders Inspire Everyone To Take Action' by Simon Sinek

Simon Sinek is known for having one of the most popular TEDx Talks of all time, with more than 47 million views on Ted.com. His message on leadership is based on his book "Start With Why," which says people won't buy into a product until they understand the "why" behind it.

Jessica Morelli, the owner of Palermo Body skin-care brand, found this book helpful for her business. "It shows that all humans really want is connection and to be understood. If you approach business in the same way, and find how to connect with your customers, you'll end up being a heck of a lot more successful than the gimmicks that trap so many businesses from next-level success," she said. 

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'Business Plans for Dummies' by Paul Tiffany and Steven D. Peterson

Before starting her Cleveland bakery, Colossal Cupcakes, Kelly Kandah read "Business Plans for Dummies" to write her first business plan. She didn't go to business school, so the book made the concepts easy to understand, and she recommends it to any first-timers, regardless of experience or degrees. "It helped me know if I was able to afford my location, and it put everything in front of me that I was probably unaware of or afraid to even look at," she said. 

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'Tools of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers' by Tim Ferriss

Matthew Cummings is the owner of Pretentious Glass Co. and Pretentious Beer Co., a glassware company and a beer brewery in Knoxville, Tennessee, respectively. As a self-proclaimed recovering workaholic, he said the content and approach in "Tools of Titans" were refreshing.

"This book really pushed me to dive deeply into entrepreneurial self-education and was one of the first times in my adult life I started to think about my own self-care," he said. 

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'Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!' by Robert T. Kiyosaki

Mark Stallings is the CEO of Casely, an e-commerce company that sells fashionable phone cases, which he cofounded with his sister Emily. Before starting Casely, 17-year-old Stallings operated a small eBay business out of his bedroom. That's when he read "Rich Dad Poor Dad," which helped him think differently about business and investing. "I always knew I did not want to take the traditional path that most people follow, and this helped me feel confident that I was not making a mistake," he said. 

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'The Effective Executive: The Definitive Guide to Getting the Right Things Done' by Peter F. Drucker

Mark Stallings read "The Effective Executive" in early 2019, when Casely was gaining traction. As an introvert, he said leadership has always been daunting. The book changed his mindset and taught him that "effectiveness can be learned and must be earned." 

"There may be some individuals better suited for leadership roles, but to be an effective manager, you need to develop the skill of effectiveness," he said. 

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'Steal Like an Artist: 10 Things Nobody Told You About Being Creative' by Austin Kleon

Before she became the lead designer and cofounder of Casely, Emily Stallings loved taking on creative projects in her spare time. But she was never formally trained in graphic design or art. She said "Steal Like an Artist" was transformational for her creative confidence.

"Creative ideas don't just come out of nowhere, you need to seek them out. After reading this book, I couldn't stop coming up with case-design ideas," she said. 

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'Principles: Life and Work' by Ray Dalio

"Principles" is a compilation of advice from the most successful hedge-fund founder, Dalio. Emily Stallings had a friend who worked at Bridgewater and recommended the book to her. "I found his principles to be harsh but very honest and full of important lessons," she said. 

Stallings found one principle in the book particularly influential in the way she and her brother approach their roles at Casely. "Everybody has their strengths and their weaknesses in the workplace — and it's important to identify them and use people efficiently," she said. 

The cofounders identified their unique strengths and compartmentalized the tasks best suited to those strengths. "Often what I was bad at, Mark was able to take the lead on and vice versa. And when neither of us were proficient, we looked to outsource or hire someone who would be better suited for the job," she said. 

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'Clockwork: Design Your Business To Run Itself' by Mike Michalowicz

Deidre Mathis is the owner of Wanderstay hostel in Houston. On top of running her business, she's an avid reader. "I have 15 books on queue," she said. One of her favorite books, "Clockwork," gives advice to entrepreneurs who feel bogged down by daily tasks and shows them how to manage their businesses more effectively so they have more free time. 

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'Leadership 101: What Every Leader Needs to Know' by John C. Maxwell

Mathis has won 12 pitch competitions, raking in a total of $75,000 to help fund her hostel. Her leadership presence, defined by the way she knows every detail of her business, is one of the traits that helped her stand out in these competitions. 

For entrepreneurs who want to learn how to lead and pitch successfully, she recommends reading "Leadership 101," written by the leadership speaker, writer, and coach Maxwell. 

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'The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail' by Clayton M. Christensen

Apple's cofounder Steve Jobs was deeply influenced by Clayton M. Christensen's book the Innovator's Dilemma. Christensen showed how even the most successful companies, that seemingly do everything correct, can still lose market leadership.

When Jobs return to Apple, he applied principles from Christensen's book — focusing on products instead of profits — and helped the company rebound.

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