Keep pulling the thread on Ray Dalio.
Ray Dalio believes there is 'definitely a bubble in markets'.
According to Ray Dalio's proprietary bubble indicator, the current market is at approximately 80% of the peak levels seen in the 1929 and 2000 market bubbles.
Ray Dalio predicts that when market valuations are in the current bubble territory, returns over the next 10 years are typically very low.
NVIDIA has engaged in a form of vendor financing where it takes an equity stake in a business which then commits to purchasing NVIDIA's chips.
Ray Dalio believes the key issue in a market bubble is not vendor financing, but rather who owns the stock and whether it is in 'strong hands' or 'weak hands'.
Ray Dalio asserts that market bubbles are typically burst by a tightening of monetary policy or events like the imposition of wealth taxes, which force asset sales to raise cash.
A J.P. Morgan report showed that investing in the market at a P/E multiple over 23 typically results in an annualized return between -2% and +2% over a 10-year period.
Ray Dalio believes that while the market is in bubble territory, the event that will 'prick' the bubble has not yet occurred.