Editor’s note: This article was updated May 18 to correct the size of Ray Dalio’s stake to just below $700,000.
- Recent 13F filings show that Ray Dalio’s Bridgewater Associates purchased a position in GameStop (NYSE:GME) stock
- The hedge fund also purchased a sizable position in rival meme stock AMC Entertainment (NYSE:AMC)
- This could signal to the market that the hedge fund is advocating for a risk-on approach to equities
It’s 13F filing season again — one of my favorite periods of each quarter. Aside from earnings, 13F filings provide another catalyst for investors to jump on to support their own individual theses on given stocks. For investors in GameStop (NYSE:GME), there’s actually some good news in this regard today.
The world’s largest hedge fund, Bridgewater Associates, has announced a stake in both GameStop and AMC Entertainment (NYSE:AMC) during the past quarter. Reportedly, the stakes in both of these companies were worth just under $700,000 apiece.
GME stock and AMC stock are two of the highest risk equities in the market, so this move is interesting. Perhaps Bridgewater is viewing these companies as high-leverage “option-like” stocks to buy to gain exposure to upside rallies. Whatever the case, it’s clear that Ray Dalio is getting more bullish on the near-term prospects of the market.
Mr. Dalio appears to have gotten the short-term direction of the market right, with most major indices surging in today’s session. That said, let’s dive into some of the other moves Bridgewater made and what the significance of these meme stock bets are for investors.
Ray Dalio’s Bridgewater Buys GME Stock and Others
Interestingly, these popular retail favorites weren’t the only ones Ray Dalio purchased this past quarter. The hedge fund disposed of its position in Tesla (NASDAQ:TSLA), while adding exposure to Airbnb (NASDAQ:ABNB) and Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B).
It appears the market is attempting to make sense of these moves today. On the one hand, the risk-on bets for AMC and GameStop are in contrast to the hedge fund’s sales of high-growth electric vehicle (EV) maker Tesla. Additionally, the acquisition of Berkshire Hathaway shares may signal the hedge fund is looking to diversify toward defensiveness right now. And perhaps the Airbnb addition reflects a value-oriented pick in this beaten-up market.
Hedge funds are stock pickers, and they pick various stocks for different reasons. Mr. Dalio clearly sees something the market doesn’t with many of these stocks. Indeed, there are many investors who may disagree with Bridgewater’s recent moves this past quarter.
I think time will prove whether Bridgewater made the right moves or not. Dalio and his team clearly know what they’re doing, and they seem to be operating with a different mindset than the overall market right now. Perhaps this strategy will yield better returns in the near term. We’ll see.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.