WEF 2024: 'India is at a very special moment for a number of reasons,' says Bridgewater's Ray Dalio

Ray Dalio, the founder of the world's largest hedge fund, Bridgewater Associates said on Tuesday that he believes in market cycles and that he would have exposure to Indian markets but "wouldn't be overextended" at their current valuations. 

Speaking to Siddharth Zarabi, Managing Editor, Business Today TV at World Economic Forum (WEF) 2024 in Davos, Dalio said, "To me, the (Indian) markets look expensive and I believe in cycles. People get overextended, markets get overextended, a lot of buying and and so on and that they progress in cycles. So my own view would be that the long term is a very optimistic, very good picture, but it's relatively expensive. So, I'd have exposure but I wouldn't be overextended," said Dalio. 

He also said that "India is at a very special moment for a number of reasons".

"India is not burdened by an excessive amount of debt and it is now at the takeoff point at a point. With the combination of education and economics, enough money to invest in the right things, and the way that it's dealing with technology and in this environment, it strikes me very much similar to where China was when Deng Xiaoping came in roughly 1980. And so in my opinion, you have a great leader in Prime Minister Narendra Modi," he said.

He also said that he hoped to be in India in late March and that if he gets to meet PM Modi, he'll ask him to open the Indian capital markets to other investors. 

"I think that would be great for India, it would be great for the world. And I think it would really bring in the capital and the innovation in a way that would be very good," said Dalio.

He said that he's tracking five "major forces" in 2024. 

"There are five major forces that each is important but how they're interacting is most important and some of them are at a critical point. The first is the debt money dynamics that is existing around the world. And I'm particularly focused on the United States now because it's so important in that way. The second is the internal conflict, particularly in the United States where there are irreconcilable differences. There's populism at both sides and unacceptable. Neither side will accept the ways of living the ways that they want. 2024 will be a defining year of whether democracy and how the working together is, this is going to be very, very critical, a big risk. And if either party gets in, you'll have very, very different policies. The third of course, is the great geopolitical conflict that through time we've seen when a rising power is challenging an existing power. 

"We have a war in Europe, we have a war in the Middle East and how that is contained or whether it's contained will certainly be important. And when you put those two together, the domestic uncertainty and the international uncertainty, we have not seen anything like this in our lifetimes. The fourth influence is this acts of nature throughout history. I studied the last 500 years of history and you can see that droughts, floods and pandemics have been the greatest influence on the well being of people. And so in one way or another, we have climate change, not just the implications of the climate, but the cost, the actual amount of money, it's estimated between five and $10 trillion a year and how that's 5 to 10% of world GDP. And number five has always been but now more than ever technology," explained Dalio.