Ray Dalio, whose Bridgewater Associates manages $169 billion in assets, told clients this week he did not anticipate the Chinese stock market bubble accelerating and then bursting so quickly.
The letter to clients began simply with "our views about China have changed."
This reversal of opinion by the largest hedge fund in the world could add more pressure on a Chinese stock market already down 20 percent in five weeks, as measured by the Shanghai composite.
Dalio also wrote in the letter that Chinese investors now face an environment where "there are now no safe places to invest."
Here are some other highlights from the letter.