Ray Dalio

Ray Dalio grew up in Long Island, N.Y. and was the only child of a jazz musician and a homemaker. As a boy in the early 1960s, he worked caddying at a golf course near his home. Then the stock market was booming and, at age 12, Dalio heard enough hot tips that he decided that he wanted to profit, so he went to see his father’s broker. When his first purchase, Northeast Airlines, succeeded, he was hooked.

After graduating Long Island University, Ray Dalio got an MBA at Harvard. Then he spent a year as the director of commodities trading at brokerage Dominick & Dominick, and worked under Sandy Weill at CBWL Hayden Stone. There, his work was to help businesses hedge their market risks using futures. After a year he went independent as a consultant, helping companies hedge interest rate and currency risk. On the side, he invested his own money and began to learn trading “decision rules” – at first written down in notebooks, later stored on computers – that could be back-tested to determine whether they worked in different eras and markets. In the mid-1980s, he parlayed his reputation for quality research into an opportunity to manage $5 million of fixed-income money for the World Bank, and produced spectacular returns. Dalio founded his hedge fund portfolio in 1990 with money from Loews Corp. and Kodak.