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Ray Dalio Bailey McCann, Opalesque New York: Ray Dalio, the head of $120bn hedge fund Bridgewater Associates has issued his second quarter letter in which he highlights some of his view of the current state of the market and noted his largest positions which include taking a larger stake in emerging markets and US brand names like Honeywell. According to NBC, another recent filing shows that activist investor Daniel Loeb, CEO of hedge fund Third Point has taken a significant position in Kraft Foods.

In his letter, Dalio notes two aspects about the US markets that effectively sum up the current state of the US financial landscape - first that real earnings growth rate is the lowest that it has been in 100 years, and that for the second time in 50 years, corporate dividend yields are currently higher than U.S. government note yields. He also notes that the European debt crisis presents a significant fat tail event risk and must be factored in accordingly.

Over the quarter, the firm took a position in the iShares MSCI Brazil Index which follows a slate of the larger Brazilian equities including Petrobras and Vale. Dalio also bought shares of Cliffs Natural Resources, Honeywell International and Las Vegas Sands Corp. He also noted plans for this quarter to buy sha......................

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