One Glendinning PlaceWestport, CT 06880

(203) 226-3030www.bwater.com

September 13, 2010

Ray DalioPresident & Chief Investment Officer

- 1 -

If you’re talented, don’t go into a business in which the macro environment will determine your success.

- 2 -

What each decade is like is determined by the excesses of the prior decade.

- 3 -

If you can understand the linkages and not get carried away by the excitements of the times, you can

maneuver strategically.

- 4 -

Whenever there's a boom and debts are rising faster than incomes, a bust will follow.

- 5 -

Governments will always choose to print money rather than tighten their belts, if the pain of debt gets bad

enough.

- 6 -

Whatever career has the highest percentage increase in HBS grads going to it is probably headed for trouble.

- 7 -

You can’t chase the good things – you have to be ahead of them or early on their waves.

- 8 -

- 9 -

- 10 -

Whenever economic conditions are extremely one way and most people are sure that they will continue, they

will probably reverse.

- 11 -

The most common mistake of investing is to assume that investments that had the highest returns over the past

few years are the best investments rather than they have become expensive.

- 12 -

INVESTMENT PRINCIPLES

A portfolio is nothing more than the weighted average of its return streams.

There are only 2 types of return streams: Alphas and Betas.

You need to have a well thought out game plan that is based on knowing what your return streams are like and knowing how to combine them.

- 13 -

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Number of Assets/Alphas in Portfolio

Annu

al P

ortfo

lio S

tand

ard

Dev

iatio

n

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

60% correlation

40% correlation

20% correlation

10% correlation

0% correlation

Return-to-Risk Ratio

0.25

0.28

0.31

0.36

0.42

0.50

0.63

0.83

1.25

2.50

Probability of Losing

Money in a Given Year

40%

39%

38%

36%

34%

31%

26%

20%

11%

1%

15 UNCORRELATED RETURN STREAMS – THE HOLY GRAIL OF INVESTING

- 14 -

Our Alpha

- 15 -

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

60 63 66 69 72 75 78 81 84 87 90 93 96 99 02 05 08 110%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Inflation/ Unemployment Pressure T-Bill Rate

-50%

0%

50%

100%

150%

200%

250%

60 63 66 69 72 75 78 81 84 87 90 93 96 99 02 05 08 11

Cumulative Profit

Avg Annual Ret: 3.7%Std Dev: 5.3%Ratio: 0.70

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 100%

2%

4%

6%

8%

10%

12%

14%

16%

18%Inflation/ UnemploymentT-Bill Rate

Please refer to Note 1 for relevant disclosures. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING OR THE COSTS OF MANAGING THE PORTFOLIO. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER OR OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.

DECISION RULES ARE CONVERTED INTO RETURN STREAMS

- 16 -

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

80 84 88 92 96 00

Average Alpha = 0.14%

US Yield Curve Cum Return

-0.25%0.00%0.25%0.50%0.75%1.00%1.25%1.50%1.75%2.00%

80 84 88 92 96 00

US Bond Diff Cum Return

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

80 84 88 92 96 00

Nominal vs IL Cum Return Swiss Franc vs Euro

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

80 84 88 92 96 00

Average Alpha = 0.09%

CHF vs EUR Cum Return

-50%

0%

50%

100%

150%

200%

70 74 78 82 86 90 94 98 02

US Bond Indicator Cum Return

Aus Bond Diff Indicator Cum Return

-10%0%10%20%30%40%50%60%70%80%

81 83 85 87 89 91 93 95 97 99 01

0%

20%

40%

60%

80%

100%

120%

140%

160%

80 82 84 86 88 90 92 94 96 98 00 02

Aus Equity Indicator Cum Return

Opportunistic EMD Indicator Cum Return

0%

1%

2%

3%

4%

5%

6%

7%

8%

91 92 93 94 95 96 97 98 99 00 01 02

Aus - UK Equity Diff Cum Return

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80 82 84 86 88 90 92 94 96 98 00 02

-100%

0%

100%

200%

300%

400%

500%

70 74 78 82 86 90 94 98 02

Copper Indicator Cum Return

-10%

10%30%

50%

70%

90%

110%

130%

70 74 78 82 86 90 94 98 02

JPY/USD Indicator Cum Return

-10%0%

10%20%30%40%50%60%70%80%90%

91 93 95 97 99 01 03

IL Indicator Cum Return

Please refer to Note 2 for relevant disclosures

COMBINE UNCORRELATED RETURN STREAMS

- 17 -

Our Beta

- 18 -

Please refer to Note 3 for relevant disclosures.

CONVENTIONAL ASSET RETURN/RISK PERSPECTIVE

Expected Rates of Return For Various Asset Classes

Real Estate

Non-U.S.Equities

U.S.Equities

Non-USFixed Income

(Hedged)

High Yield Debt

Core US Fixed IncomeCash

Inflation Linked Bonds

Emerging MarketDebt

EmergingEquities

PrivateEquity

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Expected Risk

Expe

cted

Tot

al R

etur

n

- 19 -

Please refer to Note 3 for relevant disclosures.

RISK-ADJUSTED RETURNS

Leverage-Adjusted Expected Excess Returns (Standardized to the Risk Level of the S&P 500)

0%

5%

10%

15%

20%

25%C

ore

US

Fixe

d In

com

e

Infla

tion

Link

ed B

onds

Hig

h Yi

eld

Deb

t

Non

-US

Fixe

d In

com

e(H

edge

d)

Emer

ging

Mar

ket D

ebt

U.S

. Equ

ities

Non

-U.S

. Equ

ities

Emer

ging

Equ

ities

Priv

ate

Equi

ty

Rea

l Est

ate

Asset Class

Expe

cted

Exc

ess

Ret

urn

- 20 -

Please refer to Note 4 for relevant disclosures.

GROWTH INFLATION

RISING

FALLING

BALANCE RISK (NOT CAPITAL) EQUALLY ACROSS ECONOMIC ENVIRONMENTS

- 21 -

The Economy: How it Works & What it Looks Like Now

- 22 -

My Template

• Long-term Productivity Growth• Long-term Debt Cycle• Business Cycles

- 23 -

Source: Global Financial Data Inc. and Bridgewater Analysis.

LONG RUN GROWTH DRIVEN BY INCREASES IN PRODUCTIVITYReal GDP per Capita (2008 dollars, ln)

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

00 10 20 30 40 50 60 70 80 90 00 10

2.7%

0.8%

1.9%

0.2%

4.1%2.4%

3.0%

2.2%

2.1%

2.1%

0.7%

- 24 -

WE HAVE REACHED OUR DEBT LIMITS

USA Total Debt %GDP

100%

150%

200%

250%

300%

350%

400%

1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

60 Year Credit Expansion

Source: Global Financial Data Inc. and Bridgewater Analysis.

- 25 -

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

USA 3m Interest Rate

1982

Hard landing

Hard landing

Source: Global Financial Data Inc. and Bridgewater Analysis.

THE SECULAR FALL IN INTEREST RATES KEPT DEBT SERVICE STABLE

- 26 -

20%

40%

60%

80%

100%

120%

140%

20 30 40 50 60 70 80 90 00 100%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

USA Household Debt % Disposable Income USA Household Interest Payments % Disposable Income

1982

Source: Global Financial Data Inc. and Bridgewater Analysis.

DEBT LEVELS ROSE RAPIDLY WHILE DEBT SERVICE DID NOT

- 27 -

MASSIVE PRINTING OF MONEY

US M0 as % of NGDP

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

1920 1940 1960 1980 2000

PRINTING

Source: Global Financial Data Inc. and Bridgewater Analysis.

- 28 -

Source: Global Financial Data Inc. and Bridgewater Analysis.

US Federal Budget Surplus as a % of NGDP

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

even bigger deficit

wartime deficit goes to -30%

BIG BUDGET DEFICITS

- 29 -

FISCAL AND MONETARY STIMULATIONS ARE OVER

Developed World Purchases of Financial Assets (annualized) %PGDP

0%

1%

2%

3%

4%5%

6%

7%

8%

9%

Jul-08

Oct-08

Jan-09

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

Jan-11

Apr-11

Jul-11

Oct-11

Jan-12

Apr-12

Jul-12

Oct-12

United States Trailing 3 Month Growth Impact from Stimulus (%PGDP)

-3%

-2%

-1%

0%

1%

2%

3%

4%

Jul-08

Oct-08

Jan-09

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

Jan-11

Apr-11

Jul-11

Oct-11

Jan-12

Apr-12

Jul-12

Oct-12

- 30 -

THERE ARE TWO WORLDS

75

80

85

90

95

100

105

00 01 02 03 04 05 06 07 08 09 10

Developed World Industrial Production (GDP-w eighted)

30

40

50

60

70

80

90

100

110

120

00 01 02 03 04 05 06 07 08 09 10

Emerging Market Industrial Production (GDP-w eighted)

- 31 -

SECULAR IMBALANCES HAVE NOT CHANGED

-6%

-4%

-2%

0%

2%

4%

6%

8%

00 01 02 03 04 05 06 07 08 09 10

Creditor Countries (const. basket) Curr Acct % NGDP Debtor Countries (const. basket) Curr Acct % NGDP

- 32 -

Appendix

- 33 -

Our Principles • People and culture• Truth and excellence at all costs

- 34 -

…Allow pain to stand in the way of their progress. 

…Understand how to manage pain to produce progress. 

BAD

GOOD

- 35 -

…Avoid facing “harsh realities.”

…Face “harsh realities.”

BAD

GOOD

- 36 -

…Worry about appearing good. 

…Worry about achieving the goal. 

BAD

GOOD

- 37 -

…Make their decisions on the basisof first‐order consequences. 

…Make their decisions on the basis of first‐, second‐

and third‐order 

consequences.

BAD

GOOD

- 38 -

…Don’t hold themselves accountable.

…Hold themselves accountable.

BAD

GOOD

- 39 -

Disclosures

Please read the following notes and disclosures as they provide important information and context for the research and performance presented herein. Additional information is available upon request except where the proprietary nature of the information precludes its dissemination.

- 40 -

NOTESNote 1 : This slide is meant to show an example of how Bridgewater’s active market views are formulated and is purely for illustrative purposes. The charts are not intended to reflect what actual Bridgewater valuation, signals, and performance were during the periods outlined. Charts are created using backtesting of a portion of Bridgewater’s systems.

Note 2 : For illustrative purposes only. The example does not necessarily indicate the actual historical or current implementation of Bridgewater’s strategies. Markets listed may or may not be currently traded and are subject to change without notice.

Note 3 : Based on return and risk expectations from an independent study by Rocaton, a third party consultant.

Note 4 : For illustrative purposes only. The example does not necessarily indicate the actual historical or current implementation of Bridgewater’s strategies.

- 41 -

Research/Outlook Disclosure:This research is based on Bridgewater Associates, LP proprietary research and analysis of global markets and investing. Bridgewater research utilizes (in whole and in part) data and information from public, private, and internal sources. Some internally generated information may be considered theoretical in nature and is subject to inherent limitations associated therein. External sources include the International Energy Agency, International Monetary Fund, National Bureau of Economic Research, Organisation for Economic Co-operation and Development, U.S. Department of Commerce, as well as information companies such as Bloomberg Finance L.P., CEIC Data Company Ltd., Emerging Portfolio Fund Research, Inc., Global Financial Data, Inc., Global Trade Information Services, Inc., Markit Economics Limited, Mergent, Inc., MSCI, Standard and Poor’s, Thomson Reuters, TrimTabs Investment Research, Inc. and Wood Mackenzie Limited. While we consider information from external sources to be reliable, we do not assume responsibility for its accuracy.

The views expressed are solely those of Bridgewater Associates, LP and are subject to change without notice. Reasonable people may disagree. You should assume that Bridgewater Associates, LP has a significant financial interest in one or more of the positions and/or securities or derivatives discussed. Bridgewater Associates, LP employees may have long or short positions in and buy or sell securities or derivatives referred to in this research. Those responsible for preparing this research receive compensation based upon various factors, including, among other things, the quality of their work and firm revenues.

The research in this presentation is for informational and educational purposes only and is not an offer to sell or the solicitation of an offer to buy the securities or other instruments mentioned. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors. Investors should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, where appropriate, seek professional advice, including tax advice. Investment decisions should not be based solely on simulated, hypothetical or illustrative information. The price and value of the investments referred to in this research and the income therefrom may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments.

Bridgewater Associates has no obligation to provide recipients hereof with updates or changes to such data. No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of Bridgewater ® Associates, LP.