HIGHLIGHTS: Greg Jensen - Co-CIO of Bridgewater Associates

0:01Hi, everybody. Tune in to this short version of the podcast, which we do every Friday. For the long version, tune in on Wednesdays. Hi, everybody, and welcome to In Good Company. And today I'm here with Greg Jensen, who is the co-CIO of Bridgewater. Now, Bridgewater is just an incredible hedge fund, the world largest and best, I think we can say. And it's an honor to have you here, Greg. Thanks for having me. What are the most important things you are spending time on just now? What are you looking at? Yeah, if I said sort of the biggest level, the three big themes that I'm concerned about or focused on are, A, the change in how the global and U.S.

0:45economy is being managed. essentially what we call a shift to modern mercantilism. That's been a reaction to China's rise. It's created political changes across the West, probably most clearly in the U.S., leading to a whole different philosophy on how to run the economy. So that's one big theme, modern mercantilism, the way the U.S. is operating, both with respect to economics, but also with respect to geopolitical conditions. Huge change, really important to understand. The second is the technological change that we're in the midst of. I've been, as I'm sure we'll get into, think about and working with AI for a very long time now, machine learning for 15 years and more generally my whole career.

1:30And I remember people used to say, Greg, why are you talking about AI all the time? Nobody says that anymore. It's nice to be right at the end, isn't it? Well, there's a lot of being wrong along the way, plenty to be wrong about. But that it's so important, right? It's a third to half of everything, geopolitics, markets, everything. You have to understand it to understand the macro world. And third, that all is happening in a world where capital is more concentrated in the U.S. than ever, more concentrated in equity and illiquid assets. So a kind of risky setup. So understanding where money has flowed to, why it's flowed there, and how likely that is to change.

2:14Those are the big three headlines. Okay. So just to remind everybody of the structure here. We talked about the economy, mercantilism. We talked about tech, where we touched on power, chips, and scientists. And then the last of the three points is capital and all the capital that's gone to the U.S. So what are you thinking here? Yeah, it's super interesting because these two other pressures cut against each other to some degree. But I think the economy has changed. Just back on mercantilism for a second. The U.S. is no longer the U.S. that it's been post-World War II. The idea of global institutions and even what the U.S.

2:51currently sees in its interest has changed radically. The U.S. was always pursuing its interest. But what it saw is in its interest of international cooperation and things like that have changed in a significant way. So I think you are seeing that start to play out. We're still in the very early phase of what the next steps are. What is the retaliation from the rest of the world against what the U.S. has happened? One of the things that surprised me this year is that the U.S. came out as a bully, in a sense. Like, came out and said, OK, we're going to raise your tariffs and you're not going to do anything about it.

3:26And everybody, except for China, went along with that. I was surprised. Honestly, I remember conversations with members of the administration saying, like, how are you going to do this? Like, they're going to hit back. And we are desperately in need of the rest of the world, not because of trade, but because of capital. So why are they not hitting back? I think people—first thing is Trump has been successful in picking people off, right? If you try to punch back, he raises the tariffs even more. and there is like a problem of all the countries being smaller and so they can't punch in the same size and they take the risk of being picked off.

4:05So that's one reason. I think beneath the surface, though, on things that are less obvious, like how do you invest, et cetera, you are seeing countries, you're seeing certainly the lawmakers in Canada saying, okay, we've got to invest in Canada. You're seeing home bias everywhere as a reaction to this. I think you will see more of that. But the punching back is difficult with Trump in the presidency because he's going to punch again and you have to be up for that fight. But what you see in the politics, which will lead to this, is the U.S. goodwill among the rest of the world's voters has collapsed.

4:39We saw from 2024 to 2025 the biggest collapse in support for the United States in the rest of the world that we've ever seen. So now we have set the scene for what the world looks like and what it's going to look like. So here I give you all my money, Greg Anderson. Could you please take, look after our money? Yeah. What do you do with it? Well, just, again, we haven't. So let's say it's 100. Just where do you put the money and how do you invest it? Yeah, and the main thing that I'd say is different in our philosophy than most is, I would say the way I would take your$100 is to say, how do we survive in the wide range of possible worlds?

5:24Yeah. rather than try to pick the best thing. And that is very different, right? If you take basically the last 15 years. I'm sorry, is that the way you always think? Let's survive rather than let's get rich? Or do you just think that's the way to get rich in the long term? I think it's the way to get rich in the long term. And that because basically there's a lot of ways to make money in the world. The main thing you want to do is avoid really bad outcomes. And that's how compounding wealth works. If you keep earning more and you're in the game, you'll be able to compound wealth in an incredible way.

5:56So for me right now, if I look at the world, I think it's very dangerous. And this depends, like, because you have this home bias move and a lot of the geopolitics, like, literally where you're located. Being located in Norway is an advantage and disadvantage in certain ways. Being located in the U.S., advantage and disadvantage in certain ways in terms of what you should do. But to me, where I think most people, the last 15 years are a trap. Most people have moved away from diversification because it hasn't worked for 15 years. All you needed was the U.S., U.S. equities, and more illiquid, the better.

6:25Like, that has worked incredibly well. I think it's mostly a trap. So the ways I would do this is, look, get a much more globally diversified portfolio than most people have. And because you don't know where the winners and losers are going to be, and the change in the U.S. are quite radical. Why has Bridgewater been so successful? I think the most important thing that Bridgewater did well was to say, A, we're focused. Two things. How do you deeply understand how the global financial system works? And how do you build great portfolios? Those are the two things that we do. And then to drive that, the idea that you have to do that by compounding understanding.

7:14You have to have the discipline to write down what you believe and why you believe it. Share that with others so that they can assess what's wrong about that, what's right about that. Build that out and keep compounding understanding. So to me, basically, the focus on those things, getting a culture of people who care deeply about how those two things work. and then taking everything we ever learned and having the discipline to write it down, translate it into algorithms, and keep moving forward that way. Those are the magical pieces. But is it possible to compound knowledge within an organization like that?

7:50I think it's very, very difficult. But yeah, I definitely think it is because... I mean, so now, let's say now I joined Bridgewater. So then I have access to everything you have ever thought? No, because of security. But you could. Like meaning like if we didn't have security constraints, we could make that all valid. You could literally see everything. And one of the amazing things that we built, which I think is super important, is not only everything, how it changed. Every time we learned something new, what we replaced with what we built, that's all available, right? I can go in there and see everything.

8:20And for what it's worth, AI could read over everything we've ever believed about markets, all the rules we had, how we changed them, why we changed them. And why is that good to have? because you can't carry in your brain all of the things that you've thought about and forgotten, not even just that you've done. Now we have hundreds of people that have studied these issues in China that if you start, and you start from somebody's understanding, that's been what we say is to compound it. What I mean by that is it's got to be human readable and computer readable, meaning like a human's got to be able to pick this thing up and make sense of it.

9:01And a computer's got to be able to run it. And that is extremely powerful to have that everything that we've ever believed. Are you ever hurt by feedback? Sure. You know, you find it like... When were you last hurt by feedback? This morning. Meaning like I was just sort of annoyed with, like, because I made a decision to say, okay, somebody could talk to the press about this thing and I didn't follow our process. I thought it was a small thing. Like, meaning, like, and my, like, I, and just yesterday, one of the members of the team was talking about how the things, some of the things I've been wrong about, that I, mercantilism being one, like, I thought it would have bigger impact than it has, as an example, and that I kind of can explain it away a little bit like I did today.

9:46Well, there was AI on this side, da, da, da. And so I get this feedback, and I react. Do you ever think, you know what? I've been doing this for 30 years. I'm stinking rich. I know what I talk about and here you are 26 year old and you're telling me what to do exactly and so and that's the thing back like and that's the worst of me right and if you know it and you expose it and you help other people show it to you when you're doing it that's great right the same thing as the 26 year old like you gotta flip that on the other side the 26 year old's unlikely to say it to you even though man how much better are you to have these observations about yourself there's no actual downside.

10:26There's only downside because you're a weak, fallible human. Like what's the actual downside? If I listen and think hard about, wait, what am I missing? I'm still rich. I'm still like, um, and if I don't, I miss out on all of these jewels. So I am definitely flawed in that. I feel it. I feel that anger. I feel that like, who the fuck are you? Uh, sorry, sorry about that. But, um, but I feel that and I, and I have so much experience with this and say, When I feel that, treasure it. Know that that's because they're saying something that you're trying to block out.