A Considered Opinion About a Trump Administration's Potential Effect on the Economy

Having absorbed a fair amount of commentary and put some thought into this, we found the following view, expressed by billionaire hedge fund manager Ray Dalio, posted on Linked In. It's from a bright, thoughtful person, who understands the way the economy works. We don't know whom he supported in the election, but suspect he's capable of judging things in a reasonable arms-length fashion, otherwise he wouldn't be as successful as he has been. Remember, money trumps (no pun intended) all when it comes to successful money managers.

(As a side note, James Comey, now-controversial FBI Director, was once employed by Dalio's firm, Bridgewater Associates, which famously hires not only the best and brightest, but those who can think outside the box, as well as those who can stand direct, sometimes confrontational criticism of their ideas.)

Our very preliminary assessment is that on the economic front, the developments are broadly positive—the straws in the wind suggest that many of the people under consideration have a sufficient understanding of how the economic machine works to run reasonable calculations on the implications of their shifts so that they probably won’t recklessly and stupidly drive the economy into a ditch.  To repeat, that is our very preliminary read of the situation, which is too premature to take to the bank. Of course, we should expect big bumps resulting from big shifts regardless of who is engineering this big ideological shift.

So, what are we trying to say? The headline is that the ideological/environmental shifts are clear, their magnitudes will be large, and there’s a good chance that the “craziness” factor will be smaller and play a lesser role in driving outcomes than many had feared. In fact, it is possible that we might have very capable policy makers of the previously mentioned ideological persuasion in control. As always, we will keep you posted of our thinking as it will certainly change as we learn more.

You can read the entirety of Dalio's remarks HERE.