Bridgewater’s New Brain is a Millennial Woman

A recent article in Forbes profiles Karen Karniol-Tambour, head of investment research at Bridgewater Associates, the world’s largest hedge fund (assets totaling $160 billion).

Karniol-Tambour, the article says, “directs a 150-person operation that Paul Volcker has described as producing ‘more relevant statistics and analyses than the Federal Reserve,’ ” a role she assumed at only 31 years of age, making her one of the higher profile women on Wall Street.

“Besides overseeing a third of Bridgewater’s investment professionals,” the article says, “Karniol-Tambour is one of only about a dozen people with full knowledge of Bridgewater’s secretive investment process.” She reports directly to the firm’s founder, billionaire Ray Dalio, along with two other co-chief investment officers. Dalio describes her as a “vacuum cleaner of learning.”

When she started at Princeton, Karniol-Tambour says, she “didn’t even know what a stock was,” but was ushered into a “more intriguing side of the money world by her senior thesis advisor, Nobel Laureate Daniel Kahneman. After graduating in 2006, she took a job at Bridgewater, “figuring she’d stay two years before heading off to grad school.” Karniol-Tambour explains, “I was drawn in by really intellectually curious people who literally wanted to get how things work. The sense of impact was so massive, I loved the fact that if you had a good idea you could actually test it—demonstrate proof by using the market.”

A big area of Karniol-Tambour’s focus today is China, the article says, and she believes that given the size and importance of its economy, most global investors still underweight it. She also believes the “prospects for an all-out global trade war have diminished because of the U.S. trade deals with Canada and Mexico.”

Regarding prospects in the U.S., Karniol-Tambour “expects the fiscal stimulus from the Trump tax cuts to fade as the tightening of monetary policy continues.” She says, “There is an extrapolation that the U.S. will keep outperforming for many years-decades. European interest rates are not supposed to hit U.S. levels today in the next 10, 15 years. U.S. stocks are supposed to keep having higher profitability, 10, 15 years. I look at that, and I say that’s pretty vulnerable.”