Billionaire Ray Dalio said his macro hedge fund firm Bridgewater Associates doesn’t have a net bet that the stock market will fall.
A Wall Street Journal article published earlier Friday is “wrong,” Dalio wrote in a LinkedIn post. “I want to make clear that we don’t have any such net bet that the stock market will fall.”
The Journal reported that Bridgewater had wagered more than $1 billion on put options on the S&P 500 and Euro Stoxx 50 indices expiring in March. The newspaper said it couldn’t determine whether the investment was a directional bet against the market or a hedge for other exposure the firm had to equities.
In his post Friday, Dalio added: “I believe that we are now living in a world in which sensationalistic headlines are what many writers want above all else, even if the facts don’t square with the headlines.”
He also took to Twitter.
"The Wall Street Journal wrote an article that said “Bridgewater Bets Big on Market Drop.” It’s wrong. I want to make clear that we don’t have any such net bet that the stock market will fall," he wrote in a tweet.
“To convey us having a bearish view of the stock market would be misleading,” Dalio said
Earlier Friday, Bridgewater, which manages the world’s biggest hedge fund firm, said in a statement to Bloomberg that its positions are often interrelated, mostly as hedges, and change frequently.
“It would be a mistake to look at any one position at any one time to try to deduce the motivation behind that position,” the firm said. It added that it currently has no positions hedging or betting on political developments in the U.S.
The bet, assembled over a span of months and executed by a handful of Wall Street firms, including Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS), would pay off for the world's biggest hedge fund if either the S&P 500 or the Euro Stoxx 50 — or both — declines, the WSJ report said.
The bet is made up of put options, contracts that give investors the right to sell stocks at a specific price by a certain date. The options expire in March and currently represent one of the largest bearish bets against the market, the report added.
The firm paid about $1.5 billion for the contracts, about 1% of Bridgewater’s $150 billion in total assets under management, the report said.
This report uses material from Bloomberg and Reuters.
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