“What was he talking about?” she vented afterwards.
Financial analyst Jim Grant, the self-styled “prophet of reason,” watched the interview with amazement. He had a mysterious newsletter, Grant’s Interest Rate Observer, which was popular in the sense that many serious investors claimed to have read it.
For years, Grant had privately pondered dark questions about Bridgewater. He assigned his top deputy to investigate. They spread out widely, examining the company’s public documents and furtively speaking to anyone who might have an idea of what was going on. They were inundated with “all kinds of people winking and nodding,” Grant recalled, “that something was really wrong.” In October 2017, Grant dedicated an entire issue of his publication solely to Bridgewater and the themes of “distraction, adulation,” and “mystery.”
The bulletin claimed a litany of problems. Shareholders of Bridgewater’s parent company, a group that includes employees and customers, did not automatically receive copies of the company’s financial statements. Five separate Dalio family trusts each appeared to own “at least 25 percent but less than 50 percent of Bridgewater, something that seems mathematically difficult,” the bulletin said. According to public disclosures, the hedge fund lent money to its own auditor, which the longtime analyst found precarious and unusual. “We’ll take our chances, Bridgewater isn’t forever,” the bulletin concluded.
At 8:30 pm on the day the report was published, Mr. Grant settled on the couch in his home with his wife to watch a New York Yankees game. When his home phone rang from an unknown number in Connecticut, Mr. Grant let the call go to voicemail. It wasn’t until about half an hour later that his wife heard a distant beeping sound. She walked over and pressed play on the answering machine, putting the message on speaker. Mr. Dalio’s voice, measured and calm, resounded:
“I’m not sure I’ve seen the current issue of Grant’s,” Dalio said, according to Grant. Mr. Dalio’s message lasted almost half an hour detailing his complaints about the article.