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Ray Dalio bought his first stock at age 12 : here's his lesson for young investors
02-05-2019, 06:50 PM.
Post: #1
Ray Dalio bought his first stock at age 12 : here's his lesson for young investors
Billionaire Ray Dalio bought his first stock at age 12 — here’s his lesson for young investors

Tom Huddleston Jr.
Published Wed, May 1 2019 • 11:17 AM EDT

Long before he became a billionaire, Ray Dalio was a successful investor as a pre-teen.

Dalio now heads Bridgewater Associates, the world’s largest hedge fund with roughly $160 billion in assets. But when he was only 12 years old in the early 1960s, Dalio just wanted somewhere to invest the money he’d earned caddying on a golf course and everyone he knew was talking up the stock market.

“In the ’60s, the stock market was the hottest it has ever been,” Dalio said in an interview at the Stanford Graduate School of Business that was posted online last week. “Literally, if you got a haircut or anything, we would talk to you about the stock market. And, so when I was caddying, [the golfers] were talking to me about the stock market.”

Dalio would save the money he made caddying — about ”$6 a bag,” he says in the interview — and eventually he took about $300 and bought shares of Northeast Airlines, a Boston-based airline that was later acquired by Delta Air Lines in 1972.

He decided on the stock after hearing the golfers mention it, he wrote a Reddit “Ask Me Anything” interview last year, and his jazz musician father introduced him “to a kind broker” who helped Dalio buy it.

Born in New York City, Dalio has said he grew up caddying at a local golf club frequented by wealthy Wall Street traders and even powerful politicians (including a future president, Richard Nixon).

Northeast, Dalio says, “was the only company that I ever heard of that was selling for less than $5 a share.” The billionaire investor admits now that this was a “stupid rationale” for buying Northeast shares, especially since it turned out the company was near bankruptcy at the time, he says.

However unsophisticated, the buy still ended up being a profitable move when billionaire Howard Hughes’ company bought control of Northeast, sending the company’s stock price surging. With that, Dalio became a successful investor right out of the gate, and he never looked back.

“I thought, ‘This game’s easy; I can make a lot of money [on] games that easy,’” Dalio says in the interview at Stanford. “But, that’s what got me hooked.”

Dalio kept investing his modest earnings from caddying and other side-jobs, such as mowing lawns and delivering newspapers. He read companies’ financial filings and asked professional investors for advice, and he’d built a stock portfolio worth thousands of dollars by the time he graduated from high school in the late 1960s.

Dalio went on to study finance at what is now Long Island University, and then he graduated from Harvard Business School in 1973. He founded Bridgewater Associates a few years later, first working out of his two bedroom New York City apartment, and he’s built the firm into the world’s largest hedge fund. Dalio’s personal fortune has also grown considerably, as Forbes recently estimated his net worth at $18.4 billion.

Last year, when Dalio discussed his first attempts at investing on Reddit, one user asked the billionaire for his top piece of advice for young investors looking to hone their abilities.

“Dive into the markets, have the sh-- kicked out of you, and learn how to do things differently,” Dalio said in response.

More details in https://www.cnbc.com/2019/05/01/billiona...ge-12.html
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Specuvestor: Asset - Business - Structure.

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04-05-2019, 09:34 AM.
Post: #2
RE: Ray Dalio bought his first stock at age 12 : here's his lesson for young investors
Starting early, with small capital, and the necessary endurance/desire/ability to (eventually) win at the game. A lot like WB. Extremely few individuals are like this.

For the majority, they start late, using capital that they cannot afford to lose, and their endurance/desire/ability to win is not as strong. The first and second factors are not particularly limiting, though it means a shorter runway for learning, and hence, compounding returns.

Usually, the third factor is the reason why investing is not for everyone.

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04-05-2019, 12:59 PM. (This post was last modified: 04-05-2019, 12:59 PM by opmi.)
Post: #3
RE: Ray Dalio bought his first stock at age 12 : here's his lesson for young investors
In SG, you cannot really buy shares before 21 years. Usually people get into investing through someone who is involved in investing, relatives, teachers or schoolmates etc. So it is hit-or-miss thing.

One important trait I would look out for potential investor is whether they gamble. I believe one cannot be a good investor if they dont like to gamble. This one cannot teach one. But propensity to gamble not lacking among Chinese race.  

"The game of professional investment is intolerably boring and over-exacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate toll. - Keynes"
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"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster

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04-05-2019, 03:38 PM.
Post: #4
RE: Ray Dalio bought his first stock at age 12 : here's his lesson for young investors
Actually I think strategic understanding of what are the business / cyclical/ operational etc risks vs what are the upside to intrinsic value is more important.

I think non professional gamblers generally only look at desired outcome.
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Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

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04-05-2019, 07:37 PM. (This post was last modified: 04-05-2019, 07:43 PM by opmi.)
Post: #5
RE: Ray Dalio bought his first stock at age 12 : here's his lesson for young investors
^^^ this one can be taught by apprenticeship or mentoring...

Propensity to gamble and ability to associate disparate info...harder to teach
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"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster

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04-05-2019, 07:43 PM.
Post: #6
RE: Ray Dalio bought his first stock at age 12 : here's his lesson for young investors
https://www.cbsnews.com/news/dont-get-be...ment-club/
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"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster

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05-05-2019, 09:07 AM. (This post was last modified: 05-05-2019, 09:09 AM by karlmarx.)
Post: #7
RE: Ray Dalio bought his first stock at age 12 : here's his lesson for young investors
I suppose you need to have both. Smart enough to know what are good investments, and bold/gutsy enough to buy in large quantities when they are offered at a bargain.

On occasion such as CNY, I have indulged in some form of social gambling. And at about the same time of the year, punt on the Toto hong bao draw. Sometimes during my travels, I also try my luck at the local casinos. Thankfully, these activities are engaged with amounts most would consider to be 'loose change.' Upon reflection, I am absolutely certain I am not a good gambler (or card counter), and that I have not made money from it. The excitement was perhaps the main attraction.

After spending some time on this 'value investing,' it became even clearer to me that there is no way that I can/will make any money on a sustainable basis, when I gamble. And by gamble, I mean on the traditional games you find in a casino. The odds are simply not favourable. And so I no longer do; a $3 system-7 once a year being the only exception.

But in the stock markets, my bets have only become larger. And they are only placed on what I think has attractive odds/payout.

N.B. WB played and lost big on horse races when he was a kid.

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