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Ray Dalio explained in a LinkedIn post He believes that the corona virus could have a significant impact in the short term, but that the sell-off did not reflect the temporary nature of the outbreak.
The release followed comments made by Dalio at a conference in Abu Dhabi on Tuesday that the coronavirus "was likely to have a somewhat exaggerated effect on asset pricing because it is only temporary".
Dalio, who heads Bridgewater Associates – the world's largest hedge fund – corrected what he meant by these comments in his post.
"I think the most likely result is that this virus will be a larger version of SARS that has a significant temporary effect but doesn't have much long-term impact, so the associated price cuts in the market are likely to be exaggerated," he said.
At the height of investor fear of the Wuhan corona virus, markets across asset classes and countries were sold out. US stocks mostly have recoveredHowever, other markets such as oil and copper remain in the lurch. Has corona virus infected 45,000 and killed 1,100 in its distribution in more than 20 countries.
The economic impact is already evident: US companies such as Apple, Disney and Starbucks have ceased operating in the region, while Chinese production and retailing have also suffered disruptions. Several economists have warned that the virus could undermine growth in China, the second largest economy in the world.
In his Tuesday lecture, Dalio pointed out wealth and political inequalities as trends for the global economy.
(tagsToTranslate) Ray Dalio (t) Coronavirus