➡ Ray Dalio’s investment strategy, which was once successful, has been failing over the past decade, causing his hedge fund, Bridgewater, to lose billions. Despite this, Dalio continues to advise people to diversify their investments across 15 different assets. However, Mark Moss, a successful tech entrepreneur and bitcoin venture fund partner, argues that this approach is outdated and ineffective. Instead, he suggests that investors should focus on a few key areas that are currently outperforming and rapidly increasing in value.
➡ The US Federal Reserve’s actions affect the entire world due to the dollar’s global reserve status. The current rate of monetary debasement is 13%, which is the minimum return you need from your investments to keep up. Diversifying across multiple assets may not be beneficial if they’re not beating this rate. For instance, Bitcoin has been the best performing asset with a 144% return, while others like the S&P 500 have only returned 12.5%, which is below the debasement rate. Therefore, it’s crucial to invest in assets that can beat this rate, especially in a high inflation environment.
➡ Warren Buffett, a highly successful investor, believes that diversification in investments is a sign of lack of knowledge. He suggests investing heavily in a few areas that you understand well, rather than spreading investments thinly across many areas. This approach contrasts with Ray Dalio’s strategy of diversification, which has not been as successful. The article also discusses the concept of ‘quantum shifts’ in the market, where significant changes create opportunities for massive wealth creation, such as the current shift towards decentralized systems like Bitcoin and AI.
➡ The speaker is inviting you to join a live session where they will discuss around 30 to 35 charts, answer questions, and help you apply the information to your own strategy. They advise not to invest all your assets into high growth areas, but to have some winners. The session is free and includes a live Q&A. They also suggest watching a video on investing.

Ray Dalio built the largest hedge fund in the world. His investing strategy was supposed to be foolproof, able to survive any market condition. And for decades, it worked. But over the last decade, it hasn’t at all. Bridgewater has been bleeding billions. Investors are pulling their money out in droves. Over 70 billion in redemptions. And yet Dalio still tells people to diversify across 15 different assets, even though the numbers prove it’s a disaster. What if I told you that diversification is a trap? That spreading your money across outdated assets is actually making you poor? In this video, I’m going to show you exactly why Dalio strategy is dead.

I’m going to show you what’s replacing it. We’re in the middle of a quantum shift in investing. The old rules, they just no longer apply. So if you want to build wealth, real wealth, you need to be in the right assets, the ones actually beating inflation and multiplying fast. Now, real quick, I’m Mark Moss. I’ve built and exited multiple tech companies, invested through several booms and busts cycles, and today, I’m a partner at a leading bitcoin venture fund. I’m an advisor to multiple public tech companies. I also write the Quantum Wave investment report, where I help investors navigate the biggest shifts in technology and money.

Now, I make these videos to share the insights that we’re using so you can profit from the massive shifts before the rest of the world wakes up. And by the end of this video, you’ll see why the smartest investors are moving their money into just a few, few key places and how you can do the same thing before it’s too late. So let’s go. My mantra of investing is 15 good, uncorrelated return streams, risk balanced. Because I know that if I can pick good investments and they’re uncorrelated investment, I won’t lower my return because I’ll have the average of those returns, but I will lower my risk by up to 80%.

So my mantra is, you know what? I don’t know what? The risks are always out there. And risk balance them. It’s not necessarily dollar balance. All right, that video sounds great, right? I mean, Ray Dalio calls it the holy grail. I mean, it sounds like you found the secret. Now, the one piece of advice I’ll give you, if you’re ever going to get advice from somebody else, see what that advice has done for them. So let’s take a look at what Ray Dalio’s advice has done. So Ray Dalio is the father of what’s called the All Weather Portfolio.

He sort of became popularized because Tony Robbins wrote about him. I don’t know, was it a dozen years ago or more in his book A Money Master the Game. I will note that Tony has written a final financial investing book where all of that is out the window because there is a new paradigm. So read Tony Robbins new book. But I can just break it down for you. So let’s just first look at what Ray Dalio calls the all other portfolio, the holy grail of investing. And then I’m going to break down what he said part by part by part.

Show you the data, show you the graphs and then of course what we should be doing about it. Okay, Number one, sounds great, right? We can make money no matter what the market does. We can lower our risk by 80%. Sounds amazing, right? We can average out our returns. Sounds amazing, right? It’s the Holy grail, as I said. But here’s sort of the problem. Do you want to be average or do you want to be great? Do you actually want to get ahead or do you want to get behind like the average person? I don’t want to get behind like the average person, but that’s what he is doing.

So here we have returns by period. This is as of July 6th of 2024. So it’s about six months old. Ray Dalio’s all weather portfolio returned 4.4percent year to date.5% of annualized returns in the last 10 years. What does that mean? Well, let’s take a look. If you would have just bought The S&P 500, that’s sort of the benchmark, right? If you would have just bought The S&P 500 year to date, you would have done 16% versus Radialios. Four over one year, six months, one year and five years. Over five years the S&P 500 did 13.2% and Ray Dalio’s fund did 4.4.

And over 10 years the S&P 500 would have done 11% while Ray Dalio’s would have done 5%. So that’s great. He is getting the average of those returns just like the average people are not making enough money to retire. And what we are seeing, just The S&P 500 alone year to date did four times better. Four times. That’s hundreds of percent better. Just doing the S&P 500 minus all the fees that you have to pay Ray Dalio and all those things. So that’s just. That’s the data, that’s the facts. But let’s see what that actually does to your investments.

Okay, so here’s a, here’s a chart that we can look at right here. If you would have done what your traditional typical, you know, financial advisor tells you to DO is a 6040 portfolio, that’s also bad. I’m going to show you why. But if I would have invested $1 here in the 70s, here’s how that dollar could have grown the orange line. If I would have put it into the 6040 portfolio, would have gone from $1 to $11. If I would have put it into Ray Dalio’s all weather portfolio, $1 would have turned into $10. Not as good.

6040. Beat it. But if I were to put $1 into just the S&P 500, I would have $26. So you’re starting to see this cost you a lot of money. Not having the right financial information cost you a lot of money. Now you know why Tony Robbins had to write a new book. But Ray Dalio is still going viral on social media. He had almost like 4000 likes on that post. So let’s see what other people have to say about him. Not, not just I gave you the data, but let’s see what other people are saying.

Investors are losing faith in his strategy. It’s a lackluster five year. They’re, they’ve been disappointed for a long time. Look, this hasn’t worked in decades and he is paying the price for it. As a matter of fact, we can see the losses shine as investors yank out billions. I believe he’s at over $70 billion in redemptions, state pension funds. All those people that were giving him money have all taken it away because what sounded really good of averaging out the, the losses, averaging out those winners hasn’t really worked that well. It hasn’t been beating the benchmarks.

Okay, now let’s break down what he said. There’s three pieces I want to break down, so let’s go ahead and just replay this one piece of the clip again real quick. My mantra of investing is 15 good uncorrelated return streams, risk balanced. Because I know that if I can pick good investments and they’re uncorrelated investment, I won’t lower my return because I’ll have the average of those returns. All right, so the first part of what he’s saying there is that if I can do a really good job of, of picking 15 different assets, 15 different investments, we’re going to come back to that in a second.

But if I can do a really good Job, I won’t lower my returns, I’ll get the average of those things, duh, right? So if one does 10%, one does 20%, I average them together, I get the average of the two. Obviously. Right. But here’s the thing, here’s why this is a big deal. Because if we are averaging out the investments, what are we getting? Well, what we can see is that first of all, the math that Ray Dalio is used for the average that he needs to beat is most likely wrong. As in your financial advisor’s number is also wrong.

And so what we have is that what we see is the real rate, what I call the hurdle rate, the rate that we have to beat, the number of to beat is not the 3 or 4%. The government tells you that’s CPI, consumer price inflation. They adjust things for CPI. But that’s all wrong. We have to be adjusting for the real rate of monetary debasement, the rate at which the money supply has been expanding in the United States. We can see us M2 is accelerating at a faster, faster, faster, faster and faster rate. So it’s almost starting to go parabolic now.

Instead of looking back in the average, really, I like to look at just since 2008 or maybe just since 2020, since the paradigm shifted. And what we can see is the money supply has been growing by, by 8, almost 8.4% per year over the last four years. That’s how fast the money supply is growing. And when the money supply grows the denominator, it pushes all the prices up of everything. So we need to beat at least 8.4. I think that number is still on the low side. Why? Because that’s just money overall, money in aggregate. What we really want to look at is what the Fed is starting to bring out.

And so the Federal Reserve, the, the US Federal Reserve, of course this is the dollar is the reserve asset of the entire world. So this affects the entire world. But what we can see is a little bit different. One, yes, we can see the trend line continues going faster and faster, faster. But this four year average is now 13%. And so the real rate of debasement, or the hurdle rate as I call it, is at least 13% that you have to be, not the 3 or 4%. So going back to what Ray Dalio is talking about, he’s like, well, if I can just diversify across 15 different assets and I can get the average of those assets, I’ll be doing pretty good.

Except for the problem is why would you average into a bunch of assets that are not beating the hurdle rate. And so let’s take a look at this chart. This is from 2011 through 2023 up to 2024. I need to update this chart. But what we can see is that the best performing asset class during this period, which still today has been Bitcoin with 144% return. The second best performing asset class, not individual stock, but asset class, was the Nasdaq, and it did 17.4%. Then we have the S&P 500 here. In fourth, the S&P 500 did 12 and a half percent.

Now, that is below the real rate of monetary debasement. That is below the hurdle rate. So that means that every other asset class below that is further away. So why would I average into this one and average into this one at 10%, average into this one at 2%, average this one at 3% and go into this one at 2%? And then I average these across the boards to get me a nice 5% return, which is exactly what he’s been showing, a 5% return. When I could just go into the S&P 500 and at least keep up with.

At least keep up with the rate of monetary basement, or I can go into some of these that are actually beating it and get a higher average. So you can see why the average only works when I’m averaging higher. But why would I want to average in a whole bunch of lower numbers? And of course, I wouldn’t. And that takes me to the next point that he talked about, because what you’re probably saying is it’s because of lower risk. I would average across the board, 15 different investments because I want to lower my risk. Let’s hear what Ray Dalio has to say about that in this video clip right here.

But I will lower my risk by up to 80%. Okay, so he goes across 15 different assets because he lowers his risk by 80%. Well, I don’t believe that’s true. As a matter of fact, the math tells us something different. Why is that? Now? There was a point when it worked. There was a point that Tony Robbins wrote about him in his book as the smartest guy in the world. There was a reason why he pulled in $70 billion, but there’s also a reason why those investors have pulled that money back away. And that is because, yes, something changed.

So you have to understand that things change. And what changed specifically? Well, we’ve seen monetary policy get synced up. We have been in a period for the last four or five years because of the Rate of monetary debasement of high inflation. If you watch my channel regularly, you know that I talk that inflation is not going away. As a matter of fact, we will continue to see high inflation at least for the rest of this decade. And that, that’s partly to do because of the continued rate of monetary basement, but also because the world is breaking apart.

Decentralizing supply chains are starting to break down. It’s gonna be coster, costlier to get goods here. It’s also, you know, a lot of the onshoring, re near shoring things like that is gonna push the prices of things up. And so we’re gonna expect to see more inflation. We’re not going back into a zero inflation or deflationary environment like we’ve seen in the past. And what higher inflation means for stocks and bonds, correlation. So the two assets, stocks and bonds, the 60:40 port, the two assets usually move more in tandem during inflationary periods. So because we’ve been in and will continue to be an inflationary period, these two things work together.

So trying to diversify across them doesn’t work when they move at the same time. All you’re doing is putting yourself in more risk. So we can see here unprecedented territory, the inherent limits, the limits of diversification. I call it die worsification. We’ll come back to that. Stock and bond markets around the globe were down together for the first four months of 2022. How often does that happen? Did diversification fail us or are we misunderstanding how the capital markets interact? Yes, most people misunderstood. And the reason why is. Well, most of your financial advisors, they’re not really advisors, they’re sales reps.

They sell products of their company and they make money by selling you their products. And not just selling you the products, keeping you in those products. Their interests are not aligned with yours. Okay, we can see here again, for those that are paying attention, that we can see that there are times when the stock and bond markets are not correlated, moving differently. And there are times when they are correlated and they move at the same time. When is that? Well, when high inflation happens. So the last time, if you watch my channel or other channels like mine, you know that the last time we saw really high inflation like this was in the 70s.

That was the era of Paul Volcker and saving the market from 1966 to 1981. That was when the dollar was running rampant. Inflation was running rampant. President Richard Nixon severed the ties to the gold standard. Inflation continued on. So from 66 to 81. And during that time we had a Very high correlation between stocks and bonds, similar to the high inflation environment that we’re in today. And so you have to understand that markets change, things change. There are a couple of key lessons to draw. There’s an environment for both inflation and interest rates has been fundamentally changed.

The environment that we’re in today has been fundamentally changed. The correlation between stocks and bonds will probably remain high. So going into a 6040 portfolio, diversifying across 15 assets doesn’t work when you’re in a high inflationary environment, which you’ve been in. The other thing is that if bonds are no longer the hedge, what we’re seeing is that what we need to do is hedge for the right thing. Hedge for the right thing. What do I mean by that? You see what RA Alio is talking about? Lower in risk by 80%. What 6040 portfolio is supposed to do is hedge to the downside.

You see, when markets are going up, up, up, up, up, up, up. If there’s a big drawdown, like we saw in 2000 or in 2008, right. If there’s a big drawdown, those. Those bonds could be a hedge to the downside. So they’re trying to protect you from a big crash. But in a high inflationary environment, we need to protect ourselves against something completely different, which is if you get to watch my videos on a regular basis, you know, I’ve been talking about a reverse market crash. So what that means is that because we’re in a high inflationary environment that’s going like this, we’re right here while everyone’s trying to hedge this downside risk, the real risk is that the market continues to run away from you and you’re not long enough.

So that means that prices are going up faster than your income. That means that the real crash is that your quality of life goes down because you can’t afford as many things, even though the market prices never came back down. So we want to hedge against being left behind while Ray Dalio’s hedging for the drop. That will come eventually, but it’s not here right now. We are in a high inflation environment. Okay, Number three, he talks about. Well, let’s hear it directly from him. So my mantra is, you know what? I don’t know what. The risks are always out there.

All right? So what he says is that the real risks are. The reason why he diversifies so much is because the real risk is what he doesn’t know. Now, look, I’ll give him credit for that, right? There’s a saying that says it’s not what I don’t know that gets me in trouble. It’s the things I know absolutely for certain. So there is a lot of the unknown that we need to be prepared for. However, we don’t need to do that with our investments so much. So what am I talking about? The real issue that he’s talking about protecting against.

The real issue that maybe you’re trying to protect against is that you don’t know. But really you’re hedging against ignorance now. Don’t just take it from me. Let’s hear from good old uncle Warren Buffett. This is in the younger days, and he’s still kind of old, but this is a long time ago. Let’s hear this clip directly from Warren Buffett. We like to put a lot of money in things that, that we feel strongly about. And that gets back to the diversification question. We think diversification is, as practice generally makes very little sense for anyone that knows what they’re doing.

Diversification is a protection against ignorance. I mean, if you want to make sure that nothing bad happens to you relative to the market, you own everything. There’s nothing wrong with that. I mean, that is a perfectly sound approach for somebody who, who does not feel they know how to analyze businesses. Yeah, you know, if all you have to achieve is average, it’s may preserve your job. But it’s a confession in our view, that you don’t really understand the businesses that you own. So you heard it directly from Warren Buffett. Now, just real quick before I talk about what he just said.

Warren Buffett is arguably one of the best investors ever. Ray Dalio is not. Radial is one of the most famous. He raised up one of the biggest hedge funds in the world. His track record is not even anywhere close to Warren Buffett and not even anywhere close to the greats like Stanley Druckenmiller and George Soros and those types of people. Stanley Druckenmiller did 30 years of making money without ever having a loss. I mean, he crushed it. Warren Buffett did as well. Ray Dalio, not so much. But anyway, what, what Warren Buffett said is that diversifying across a whole bunch of things is basically a confession that you don’t know what you’re doing.

He said, there’s nothing wrong with that. You’ll keep your job. Right. You won’t lose a lot of money, but you just don’t know what you’re doing. They prefer to put a lot of money in, into a couple of things. Things. So what are those couple of things. Well, what Warren Buffett talks about is what he calls his deal box. So if you look at like the game of baseball, you’ll know that someone at bat sort of has their zone where if they get balls in this area or balls in this area, or balls in this area, they’re much more likely to hit balls here, here, or there than if they were here, here, for example.

And so we want to think about our investments the same way. What do we know, what do we like, what do we have interest in, what do we like to pay attention to? And those would be our deal box. Right. Warren Buffett says it like this. Everybody’s got a different circle of competence. Some people like some assets, some people like others. I love technology, for example. I’m paying attention to that all the time, I’m using it all the time versus maybe I don’t like industrials as much, I don’t like foreign markets as much. But everyone has a different circle of competence.

The important thing is not how big the circle is. The important thing is staying inside the circle. So what are the things that you know you have interest in that you like to pay attention to and stay in those things? That’s the smart money approach. Dalio has been asymmetric to the downside because he’s diversified across a whole bunch of things that are not keeping up with the rate of debasement versus going for things that will beat that. It’s a sure losing strategy, just like Warren Buffett said. All right, so where should we be focusing? Well, again, that just depends on you figure out where your circle of competence is.

But I can show you where you probably have the highest hit rate. And that is where the smart people, where the smart money is focusing. So what am I talking about? What we find out is that there’s certain parts of the market that we’re much more likely to hit. And so we want to think about quantum shifts in the market and not just cycles in the market. So we can see like, you know, we rotate out of value into growth. We wrote out a rotate of equities to commodities, things like that. So those are cycles. But we really want to understand the shifts.

That’s where the big money is being made. And I talk about it in these 50 year cycles. You’ve seen this chart. About every 50 years we get one of these quantum shifts that happens. And right now we’re in the six, one that’s happening right now. This is the decentralized revolution. This is the bitcoin, this is the AI. This is all these new platforms and protocols that are coming out. And so in those periods you have the greatest chance of falling out of the boat and hitting water as, as, as they say. So what we can see is that each One of these 50 year cycles has create, created some of the greatest wealth in history.

So for the last 50 years it’s been computers, telecom, Internet, Bezos, Musk, Bill gates. The last 50 years it was industrials, that was Ford, GM, GE, things like that. Before that we had steel, we had oil, things like that. So each one of these cycles represented a chance to see the greatest wealth made, legacy wealth being made. And so if you invest into sort of this investing black hole, this period, one of these periods right here, you have the highest chance of getting those outsized returns. Now we can see that what happens is in these cycles the old type of technology, which is now centralized systems, starts falling.

And we’re starting to see, instead of big giant corporations and big centralized systems, we’re starting to see small, little companies, small independent companies, small independent systems and decentralized systems is starting to pick back up. And that’s what this represents. Now we can see this, that capital is consolidating around these things. Of course, it doesn’t take a genius to realize that all the financial outlets are talking about the growth in AI and computers and robotics and autonomous vehicles and yes, Bitcoin and all those types of things. What we can see is just over the last 12 months, Ray Dalio’s fund, the All Weather portfolio, which is the 6040 split, has done 10% over the last 12 months.

Not too bad, right? Beaten inflation at 3%. Except for, again, that’s not the real number. Meanwhile, the S P500 has done 22% more than double, more than a hundred percent better. It’s a big deal. Now that is one way to look at it. We can see here, here’s a chart of the S P500 up 23%. It’s been crushing it. But then we have the Nasdaq, which represents a little bit more volatility. We have the tech stocks now, The S&P 500 has the Mag 7. So it’s been crushing it. Here we have The S&P 500 has beat that number.

We’re almost at 26% right here. And if we want to go a little bit more on the volatility scale, we can see an asset like Bitcoin during that same period has done 95%. So from 10% diversifying across a whole bunch of assets and get the Lower average going to the S and P at 22, the Nasdaq at 27, or Bitcoin at 95. We can see how that changes. Now, during this quantum wave, it’s really easy to understand how to invest because it’s this repeating cycle. This is the sixth time it’s repeated in the last 300 years.

And during these things we have basically four different phases that happens. We have this eruption phase, the first 10 years or so, the frenzy phase, which is what we’re in right now. Eventually we get to what’s called the synergy and maturity phases. And it uses this S curve type of adoption cycle. But we’re right here, right now. And so what that gives us is a roadmap of knowing exactly how to invest. So in phase one, which we’ve just left, there’s an old playbook to follow. But in phase two, right here, we have a new phase, a new playbook to follow.

And this is why you’re seeing these autonomous systems, these decentralized systems, these open source AI models, Bitcoin, all the growth happening on Bitcoin, all the sovereign wealth funds, institutions coming into Bitcoin, because it’s all happening right here. The beauty of this, for all of us watching, is that this is the biggest window of opportunity. It’s not behind us. You didn’t miss out. It’s all right in front of us. Using S curve, it tells us that the time it takes to go from 0 to 10% is the same time it takes to go from 10 to 90%.

So we have all this growth right in front of us right now and it’s representing an entire new investment strategy, which is why Radiallio strategy is not working. If you want to average out and fall behind like everybody else, that’s one way to do it. The better way is to go to the deal box, go to where you have the highest hit rate. Now, if you want to know the exact strategy we’re using, what different assets that I’m buying during this period, I am going to do a free live presentation. There’s a link down below if you want to come join live.

I got like, I don’t know, 30, 35 charts that we’ll go through. I’ll do live Q and A so I can answer all your questions, help you figure out how to apply this to your own strategy. I’m not saying to put 100% of your assets into these high growth things. You can certainly set your hedges in some of those areas, but you at least want to make sure you have some winners set up and that’s what we’ll be discussing. There’s a link down below. Like I said, it’s all free. Come hang out. It’s a good time.

Live Q and A. But otherwise, let me know what you think about this. Leave me a comment down below. And you might want to watch this video on the investing black hole to learn a bit more about it. And that’s what I got. Right to your success. I’m out.
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See more of Mark Moss on their Public Channel and the MPN Mark Moss channel.