Ray Dalio, founder of Bridgewater Associates, gave an interview to The Diary of a CEO podcast. The investor discussed the current state of the financial markets. He noted the growing interest in companies in the field of artificial intelligence. Dalio compared the current situation with the historical periods of 1929 and 2000. The investor pointed to the simplification of procedures for issuing new shares. Companies attract tens of millions of dollars in financing. The valuation of the business exceeds the funds raised by twenty times. Individual market participants receive the status of billionaires on paper. At the same time, the real cash flow remains limited. Dalio drew attention to the activity of retail investors. Private participants use borrowed funds for transactions. Traders are actively buying exchange-traded funds for indexes. Margin trading volumes have increased significantly over the past year.

The financier recalled the difference between the concepts of wealth and money. Wealth requires the sale of assets to generate cash. The ratio of these indicators in the United States is 8.5 to 1. The volume of financial wealth exceeds real money by 750 percent. Dalio noted the similarity with historical peak values. Similar indicators were observed before the corrections of previous years. Rising interest rates increase the cost of debt servicing. Asset owners have to sell securities to cover their obligations. This process puts pressure on stock prices. The massive issue of new securities also affects the market. Companies seek to raise capital on the wave of investor interest. An increase in the supply of shares changes the balance of demand. Dalio mentioned the behavior of technology startup executives. Management attracts financing for future strategic deals.

The investor considers the market within the framework of long-term economic cycles. Dalio studies debt dynamics and property stratification. These factors form the overall macroeconomic picture. The investor identified two key market parameters. The first parameter was the level of interest rates. The second parameter is the volume of new share placements. The combination of these factors determines the behavior of investors. Dalio gives an example from professional practice. The manager of one AI company attracts hundreds of millions of dollars. The manager plans to use the funds to buy competitors. The strategy is designed to change market conditions. Startup managers are preparing for various scenarios of development. Investment decisions are made with a long-term perspective in mind. Financial institutions continue to analyze industry trends. Analysts at Bridgewater monitor the performance of the technology sector.