Billionaire Ray Dalio's Bridgewater Trims Holdings In 6 Of 'Magnificent 7' Stocks Amid Valuation Concerns, Adds This Automotive Stock After 3 Years

In a recent move, legendary investor Ray Dalio's hedge fund, Bridgewater Associates, has trimmed its holdings in six of the 'Magnificent 7' stocks during the fourth quarter of 2024, while adding a fresh position in Elon Musk-led Tesla Inc. (TSLA). This shift in portfolio composition reflects Dalio's concerns about the valuation of these high-profile tech stocks and his focus on value investing.

Dalio, in a discussion with David Friedberg on the All-In Podcast, cautioned against solely focusing on "good" companies and urged investors to prioritize value and consider pricing dynamics, especially in the current economic climate. He expressed concerns about the "superscalars" like Nvidia, highlighting their potential risks. Instead, Dalio advised investors to prioritize productivity, innovation, and disruptive technologies, while carefully considering pricing and global economic trends.

Bridgewater Associates' decision to add Tesla to its portfolio after a three-year absence reflects the fund's commitment to value-driven investing and its willingness to take on risk in pursuit of potential gains. Tesla's stock price had been volatile and experienced a significant drop in 2024, making it an attractive opportunity for value investors like Bridgewater.

The fund decreased its holdings in Apple Inc. (AAPL) by 40%, Nvidia Corp. (NVDA) by 26%, Meta Platforms Inc. (META) by 23%, Microsoft Corp. (MSFT) by 23%, and Amazon.com Inc. (AMZN) by 35%. These cuts in positions reflect Dalio's concerns about the high valuations of these companies and the potential risks associated with their expensive pricing.

Despite these changes, exchange-traded funds took the highest position in the value terms in Bridgewater's portfolio, indicating the fund's continued focus on broad market exposure. The fund held $4.824 billion and $1.2 billion in ETFs tracking the S&P 500 index and $922.163 million in the ETF tracking the MSCI Emerging Markets index.

In conclusion, Ray Dalio's valuation concerns led him to trim holdings in six of the 'Magnificent 7' stocks, as he warned investors against focusing solely on "good" companies and urged them to prioritize value and consider pricing dynamics in the current economic climate. Bridgewater Associates' decision to add Tesla to its portfolio after a three-year absence demonstrates the fund's commitment to value-driven investing and its willingness to take on risk in pursuit of potential gains.