GP Academy Letter 250817: Ray Dalio Explains How To Lose Your Gold

Ray Dalio is a billionaire hedge fund manager and founder of Bridgewater Associates, the world's largest hedge fund. 

BIG IDEA: See below for an excellent video from Dalio in which he states that most people will lose their gold and silver because:

• They don't understand the economic system.

• They are unprepared for economic cycles.

• They make emotional decisions.

I’ll summarize the video in outline form, then comment below.

The Cyclical Nature of Economics

• Economic history follows a predictable cycle driven by human emotions.

• This cycle has two phases:

• Phase 1 — Optimism leading to growth and expanding credit.

• Phase 2 — A correction triggered by rising interest rates or a shock.

• Most people ignore this cycle, which leads to significant financial losses.

The Illusion of Wealth

• Paper assets like stocks and bonds can become worthless.

• Real assets are tangible, like physical gold, silver and land.

• You don't truly own an asset if you cannot physically control it.

The Psychology of Investing

• The biggest risk is human behavior.

• Most people follow the herd mentality.

• They buy high and sell low.

• Driven by fear and optimism rather than logic.

• Independent thinking and discipline are required to build lasting wealth.

The Role of Government and Confiscation

• Governments may confiscate assets in a severe economic crisis, as in 1933.

• Modern confiscation can be subtle.

• Such as capital controls or taxes.

• Assets held within the financial system are vulnerable.

The Importance of Preservation

• Preserving wealth is as important as accumulating it.

• Prepare for risks by understanding historical patterns

• Ensure true ownership and control of assets, rather than live in fear.

Gordon: I could not agree more. I’ve been urging friends for years to accumulate numismatics to avoid the future possibility of confiscation or nationalization of precious metals.

The same government that could care deeply about your bullion holdings (coins and bars) could care less about your rare coins, any more than they do your collections of postage stamps or first edition Beanie Babies.

I highly recommend that you contact Rare Coins of New Hampshire and tell Chris Kahler I sent you.

Chris welcomes those who are brand new and there are no dumb questions. Make a small purchase and enjoy the ownership of a piece of history as a long term investment and economic hedge.