Ray Dalio clarifies his previous comments that the market impact of coronavirus has been exaggerated
Eoin Noonan/Web Summit/Getty Images
Ray Dalio clarified in a LinkedIn post that he believes coronavirus could have a substantial impact in the near term but that the market sell-off did not reflect the temporary nature of the outbreak.
The post followed comments Dalio made on Tuesday at a conference in Abu Dhabi, United Arab Emirates, that the coronavirus “probably had a bit of an exaggerated effect on the pricing of assets because of the temporary nature of that.”
Dalio, who runs Bridgewater Associates — the largest hedge fund in the world — corrected what he meant by those comments in his post.
“I think the most likely outcome is that this virus will be a larger version of SARS that will have a significant temporary effect but won’t have a big long term influence, so the downward market price moves related to it are probably becoming exaggerated,” he said.
The economic effects are already apparent: US companies including Apple, Disney, and Starbucks shuttered their operations in the region while Chinese manufacturing and retail have seen disruptions as well. Multiple economists have warned the virus could undermine growth in China, the second-largest economy.
In his Tuesday talk, Dalio pointed to wealth and political inequalities as trends he finds concerning for the global economy.