Ray Dalio, founder of the hedge fund Behemoth Bridgewater Associates, believes investors have not made continuous investments and this is a condition that will eventually need to be corrected.
"They sell dreams, they don't sell profit, and they don't even sell the way to profit."
During a particularly suppressed interview with CNBC on Tuesday, a prominent investor suggested that investors were being flooded with money because of monetary policy, but did not understand about the choice of investment strategies. They "buy dreams, not profits and stocks," he said.
His comments come as a parent of WeWork We Co. canceled some public sales of flames over its business model and valuation.
At the same time, the results for the third quarter were better than they feared, but otherwise poor in absolute terms.
Dalio, whose fund totals about $ 1
The Dow Jones Industrial Average
DJIA, + 0.23%
registered its first close on Monday, July 15th, joining the S&P 500
and Nasdaq Composite
COMP, + 0.15%
on record, amid growing hopes that a longstanding trade dispute between China and the US can be resolved.
Read : Are jobs and trade news ahead to blind investors to the dangers of the stock market?
The hedge fund investor also said he believed that monetary policy was "stuck … you cannot raise interest rates because incentive companies and various businesses have a lot more debt," he said.
He therefore warned that the financial markets could face "great pressure".
Dalio told CNBC at the Greenwich Economic Forum that he thinks companies will struggle to increase profit margins that are close to records and more likely to produce lower margins as companies they are struggling to cut their spending more than they already have.
"There is not much to raise this higher," Dalio said, explaining that his profit margin is estimated to have increased from 7% to 14%.
The 70-year-old investor is also complaining about the US government's budget deficit, which is just under $ 1 trillion in the fiscal year just ended, according to the most recent near-formal estimate by Congressional Budget Office.
Checking the excerpt from the interview below: