Ray Dalio (Trades, Portfolio)’s Bridgewater, the largest money management firm in the world, was up 12.4% this year through October, and he’s optimistic about the stock market for at least the next 18 months.
“I see no real reason for a problem in the United States now other than too tight a monetary policy and I don’t think they’ll go to too tight a monetary policy.”
He added:
“We’re coming to the end of effective monetary policy because when interest rates hit zero and then there are no risk premiums, the transmission mechanism of monetary policy is ineffective. So think bout what we went through, we first hit zero interest rates, but we had big risk premiums, big spreads, high returns of equities. Then that wen out on the risk curve and it brought down the expected returns of those asset classes, bringing up their prices, and that price appreciation has cause a lot of appreciation. So if we look at the prospective return of asset classes, it’s very narrow.”
Dalio’s Bridgewater added 153 new stocks to their portfolio in the third quarter. The portfolio has a $12.8 billion value and 363 stock positions in total.
The largest new positions of the third quarter were: American Express Co. (AXP, Financial), United Parcel Service Inc. (UPS, Financial), Kimberly-Clark Corp (KMB, Financial), Priceline Group Inc. (PCLN, Financial) and TJX Companies (TJX, Financial).
American Express Co. (AXP, Financial)
Bridgewater purchased 224,123 shares of its largest new position, American Express, giving it a 0.15% portfolio of the portfolio. The stock’s price averaged $90 in the third quarter.
American Express Co. was founded in 1850 as a joint stock association and was incorporated in 1965 as a New York corporation. American Express Co. has a market cap of $94.42 billion; its shares were traded at around $91.26 with a P/E ratio of 17.00 and P/S ratio of 2.90. The dividend yield of American Express Co. stocks is 1.10%. American Express Co. had an annual average earnings growth of 8.70% over the past 10 years. GuruFocus rated American Express Co. the business predictability rank of 3-star.
United Parcel Service Inc. (UPS, Financial)
Bridgewater purchased 149,364 shares of United Parcel Service Inc., a .11% portfolio weight. The stock price averaged $99 in the third quarter.
United Parcel Service Inc. (UPS, Financial) was incorporated in Delaware on July 15, 1999. UPS has a market cap of $97.95 billion; its shares were traded at around $108.20 with a P/E ratio of 26.70 and P/S ratio of 1.80. The dividend yield of UPS stocks is 2.4%. UPS had an annual average earnings growth of 1.6% over the past 10 years.
Kimberly-Clark Corp (KMB, Financial)
Bridgewater purchased 112,198 shares of Kimberly-Clark Corp, for 0.094% of the portfolio. The stock price averaged $104 in the third quarter.
Kimberly-Clark Corp was incorporated in Delaware in 1928. Kimberly-Clark Corp has a market cap of $42.23 billion; its shares were traded at around $113.39 with a P/E ratio of 20 and P/S ratio of 2. The dividend yield of Kimberly-Clark Corp stocks is 2.9%. Kimberly-Clark Corp had an annual average earnings growth of 5.7% over the past 10 years. GuruFocus rated Kimberly-Clark Corp the business predictability rank of 4-star.
Priceline Group Inc. (PCLN, Financial)
Bridgewater bought 6,900 shares of Priceline Group, a 0.062% portfolio holding. The stock’s third quarter price averaged $1,230 per share.
Priceline Group Inc. was formed as a Delaware limited liability company in 1997 and was converted into a Delaware corporation in July 1998. Priceline Group Inc. has a market cap of $61.24 billion; its shares were traded at around $1169.70 with a P/E ratio of 26.30 and P/S ratio of 7.50. Priceline Group Inc. had an annual average earnings growth of 54.70% over the past 10 years. GuruFocus rated Priceline Group Inc. the business predictability rank of 4-star.
TJX Companies (TJX, Financial)
Bridgewater purchased 113,539 shares of TJX Companies, a 0.052% portfolio weight. The stock’s price averaged $56 in the third quarter.
TJX Companies is an off-price apparel and home fashions retailer in the United States and other countries. TJX Companies has a market cap of $44.04 billion; its shares were traded at around $63.56 with a P/E ratio of 20.80 and P/S ratio of 1.60. The dividend yield of TJX Companies stocks is 1.10%. TJX Companies had an annual average earnings growth of 17.50% over the past 10 years. GuruFocus rated TJX Companies the business predictability rank of 5-star.
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