Recently, Ray Dalio, the founder of the world's largest hedge fund Bridgewater, shared his views on the AI war and diversified allocation during a conversation.
The study group for investment notebooks has organized the key points as follows:

1. The AI war is a war that no country can afford to lose, and it is more important than corporate profits.

2. Chinese people are a bit behind in chip technology, but they are ahead in application.

3. A great company that becomes expensive is much worse than a really cheap bad company. Price must be considered; this is all part of the cycle.

4. Ultimately, what determines wealth is your actual purchasing power; often, after adjusting stock prices for inflation, purchasing power has declined by 60% or 70%.

5. From 1966 to 1984 (investing in US stocks), everyone experienced negative real returns.

6. In an environment of rising interest rates, attention must be paid to the interest rates and pricing of Assets.

7. The purest form of wealth storage is Gold, which can be transferred between countries and is more private than Cryptos, while Cryptos are more susceptible to government taxation.

Ray Dalio made an appearance with his new book "How Nations Go Bankrupt" and also introduced the debt crisis. This content was not covered by the class representative, but Dalio has previously mentioned regarding the debt crisis:

Short-term debt cycles accumulate to become massive long-term debt cycles. Crediting is a stimulant; people tend to create credit, and debt will rise over time, usually leading to debt peaks and troughs being higher than before. Debt crises can destroy empires but also provide excellent investment opportunities for investors.
The United Kingdom may be falling into a "debt death spiral" wherein it must borrow increasingly in order to repay the rising interest costs. Currently, the annual interest payments on UK government bonds have exceeded 100 billion British Pound. The USA also "shows this sign", indicating that markets may begin to struggle to absorb the US government's borrowing needs; therefore, controlling the US debt burden will be the "top issue" during Trump's second term.

The following are the highlights organized by the class representative from the investment workbook to Share with everyone:

In the AI war, no country can afford to lose.

Just like the technological war, the AI war can easily happen, and I think it is actually more important.

This is a war that no country can afford to lose, because it is more important than corporate profits. If China or the USA truly loses this war, it is more significant than profit, so participation in this war must be approached in this way. Similar to China's electric vehicles, it is essential to produce them, which is more important than corporate profits.

China lags behind in chips but is leading in applications.

I have been aware of DeepSeek for some time.
I think China is a bit behind in chips, but they are leading in applications.

China's strategy is chips, and you will even see that Chinese chips are embedded in commodities at a very low cost. In the future, you will see more robotic applications. You will see that the Chinese manufacture things at incredibly low costs. They account for 33% of the world's manufactured commodities, surpassing the total of commodities manufactured by the USA, Germany, and Japan.

You will see that kind of competition, perhaps similar to solar panels, where profit does not matter.

So on one hand, you must look for what I consider productivity, innovation, and disruptors, that is, those who benefit from using or creating applications with significant impact; on the other hand, you must also examine different countries, regions, and things.

Expensive great companies are significantly worse than cheap bad companies.

The most important thing is the price.

Many investors make the mistake of thinking that I want to make money by investing in good things. You know, that's a great company, but a great company that becomes expensive is much worse than a truly cheap bad company.
So you have to consider pricing, it's all part of the cycle.
You know, everyone says it's great and will have a significant impact on the future. Just like those Internet companies back then, it was great, but the price has to be watched.
I pay special attention to those companies. We are now in a high interest rate environment, in other words, it looks very similar to 1998 or 1999, when emerging hot items became the driving force of productivity.

It's very hot, prices are high, and you have a rising interest rate environment, which is a typical problem. So we must focus on the interest rates and pricing of these assets. You have to think, where is the next step?

Diversification is important, and one must think about asset correlation.

Another thing is that I think diversification is very important. Everyone's leverage is high, and everyone thinks, you know I will buy assets that will rise, and if they perform well, I will leverage myself this way. So the world is highly leveraged.

You must pay attention to the correlation between Assets. Therefore, when it is interesting to see the addition of Gold or Other unrelated Assets to the portfolio, it reduces the risk of the portfolio, thus attention must be paid to unrelated Assets in this environment. This is part of portfolio construction.
I have some Bitcoin, but not as much as Gold, you know, this is my diversification choice.

From 1966 to 1984, the actual returns of the USA stock market were negative.

I feel like I am a person who focuses on productive Assets. I like to own businesses that can create things.

You cannot simply make yourself richer by printing money. Ultimately, what determines wealth is your actual purchasing power, how much your money can buy.
Remember one thing, many times, stock prices have declined in purchasing power by 60% or 70% after adjusting for inflation.

When adjusted for the value of the dollar, stock prices were indeed impacted, from 1966 to 1984 (investing in the USA stock market), everyone faced negative real returns.

The purest way to save wealth is Gold.

Investing in assets that will not be affected by currency devaluation, and can even benefit from it, Gold is one of them.

The purest form of wealth storage is Gold, as it can be transferred between countries. It is used as a reserve by central banks, so central banks will hold it, and many people will hold Gold, which can be more private than Cryptos.

Cryptos are easily taxed by the government; in other words, the government knows where it is, who is doing what, etc. It is also an effective tax asset.