Ray Dalio, one of the world’s most successful investors and entrepreneurs, shares the unconventional principles that he’s developed, refined, and used over the past forty years to create unique results in both life and business—and which any person or organization can adopt to help achieve their goals.
In 1975, Ray Dalio founded an investment firm, Bridgewater Associates, out of his two-bedroom apartment in New York City. Forty years later, Bridgewater has made more money for its clients than any other hedge fund in history and grown into the fifth most important private company in the United States, according to Fortune magazine. Dalio himself has been named to Time magazine’s list of the 100 most influential people in the world. Along the way, Dalio discovered a set of unique principles that have led to Bridgewater’s exceptionally effective culture, which he describes as “an idea meritocracy that strives to achieve meaningful work and meaningful relationships through radical transparency.” It is these principles, and not anything special about Dalio—who grew up an ordinary kid in a middle-class Long Island neighborhood—that he believes are the reason behind his success.
In Principles, Dalio shares what he’s learned over the course of his remarkable career. He argues that life, management, economics, and investing can all be systemized into rules and understood like machines. The book’s hundreds of practical lessons, which are built around his cornerstones of “radical truth” and “radical transparency,” include Dalio laying out the most effective ways for individuals and organizations to make decisions, approach challenges, and build strong teams. He also describes the innovative tools the firm uses to bring an idea meritocracy to life, such as creating “baseball cards” for all employees that distill their strengths and weaknesses, and employing computerized decision-making systems to make believability-weighted decisions. While the book brims with novel ideas for organizations and institutions, Principles also offers a clear, straightforward approach to decision-making that Dalio believes anyone can apply, no matter what they’re seeking to achieve.
Here is a rare opportunity to gain proven advice unlike anything you’ll find in the conventional business press.
Raymond Dalio (born August 8, 1949) is an American investor, hedge fund manager, and philanthropist. Dalio is the founder of investment firm Bridgewater Associates, one of the world's largest hedge funds.
Overall, I'm having trouble understanding the hype around this book except that the author is super-rich. So maybe no one wants to contradict him, or even edit his writing for rampant redundancies.
Much of the "original" advice is problematic. Radical transparency, which is the main concept, is a non-starter in a culture of corruption and incompetence. And that's what we're living in. (Detroit: An American Autopsy). So, if you're a mid-level manager in a large organization, you will probably have a lot of trouble if you try to implement Dalio's advice. He can do it because he's the eccentric boss of his own privately held firm. But even there it doesn't seem to work very well. Despite their extreme vetting process for new hires, they dispose of one third of them. For a very long book about "evidence-based" management, there's a conspicuous lack of evidence--even testimonials from happy employees--about how great it is to work at Bridgewater.
Much of the advice is unoriginal. There's a long detour into neurobollocks (Brainwashed: The Seductive Appeal of Mindless Neuroscience) that adds little to the ancient metaphor of the little Reason rider trying to control the Emotions elephant. The great classic business advice writers (Carnegie, Covey, etc.) make a point up front that they are not inventing anything, because they are borrowing from the wisdom of the world. Dalio wants to give the impression that these are his Principles he came up with. So what? Well, he makes a really big deal about humility. The chain of internal inconsistencies makes me wonder if there's any there there.
Ray Dalio showed us, that in order to build a successful hedge fund it’s not enough to follow your intuition. It’s much wiser to follow a set of principles that will guide you and protect you from bad decisions. He divided those principles into life principles and work principles.
The top 3 principles I applied to my life are: * Think of yourself - how to achieve what you want by analyzing what’s true. * Be radically open-minded * Look at the machine (you and your life) from the higher level.
The funniest part was when he talked about his favorite book, Joseph Campbell's man of a thousand faces. I read that book as an interesting work of comparative myths across cultures revealing common themes in humanity and the struggle of life. Dalio read it as a life map and self-help book. Like he read about the hero's journey and thought it was about him? Maybe that's only odd to me.
Anyway, the book is interesting. I'd skip the first part and go right to the middle and the end where he talks more practically about his principles. I feel like the principles could have been put on a flash card and didn't need so much repetition: be radically transparent, humble, know yourself, strive to understand truth and don't delude yourself, and fire people who suck. Nothing revolutionary, but the principles are wise and useful
Amazing book, must read for anyone who has to make decisions in life - that means everyone - but I think the more impact your decisions have the more useful his frameworks are. I'm giving it 5 stars for the big ideas and uniqueness of them - though I will warn you that the book is very long and highly repetitive - there is probably a way to read only parts of it and still get all the big ideas. Also (as I do for most books these days) I read it with a combo of Kindle ebook and Audible, and Ray reads the first half of the book himself, and given that part is more backstory/bio, It's much more powerful to hear it in his voice.
Dalio was successful because he timed it perfectly - he was one of the first to apply computers to investing. He also along the way invented what we call a "hedge fund", which is only possible to do well if you highly leverage computers. He leveraged computers heavily, turning all investment decision making he could into algorithms. He found this worked so well, that he attempted to turn ALL decision making into algorithms - this book goes into personal (life) and management (work) algorithms (aka principles). This is one of the more interesting ways Ray approaches life - he is trying to turn all his life into algorithms:
In order to do this, Ray believes strongly in having "radical transparency" and being "radically open minded". I think these sections are worth reading if you don't read the whole book (worth re-reading too). A transparent culture means everything is shared: metrics and data (how the company, or teams are doing), what is said in meetings (all meetings are recorded at Bridgewater and anyone can access the recordings later), strategic issues (like if they are considering a merger of one group), and even what people are like.
Bridgewater has opened sourced a big piece of people management - what people's strengths and growth areas are. They use personality tests as well as input from others in the company to assess this, and then put it on "baseball cards" for each person, which anyone in the company can see. He describes how useful these tools are when creating a new project team, to make sure you have a balance of the right skillsets and types of people on it, and how without this many people are just naturally likely to pick people like themselves. This way of operating is so interesting and different that many notable phycologists (Eg Adam Grant) have gone to study the Bridgewater culture.
Once you know who is good at what, it becomes a way to de-risk decision making in a meritocratic way. People who score high at things (aka are more "believable") get more weight in their opinions on things in that area. Most of us do this intuitively (ask and listen to those who know about something), but having a system to enforce that will catch a lot of cases where it isn't happening. Thinking about where this might go if expanded more broadly is a bit interesting - feels like it could really turn into gamified decision making.
I was looking through the books I had on my kindle and for some reason at some point I had bought this. I'm not sure why and I honestly had no idea who the author was even though I actually know about Bridgewater. Usually I have a tendency to just be a derisive piece of shit but when I was reading this book, Ray kept repeating that one should keep an open mind and so I thought you know what, I will keep an open mind Ray.
I actually did enjoy the first third of the book when he was talking about himself and his life, probably because I'm nosy and I do like hearing about how people think/how they perceive the world. After that it kind of got repetitive and boring when he started going into his principals. I think part of it is because like he said the business principals aren't meant to be read but used as a reference. I feel also there was an amount of abstraction to what he was saying that just made everything sound like something you would read in any business books. Like keep an open mind and try to fail well and learn from my failures, groundbreaking ideas.
I kind of wish I had read a book about investing instead honestly, I feel like that would've been more relevant. I'm not a manager so most of the advice is useless for me at this point anyways. As always maybe I should just be better about figuring out what something is about before I actually pick it up to read it.
I love how Ray Dalio gamifies his life. He treats his failures as puzzles or missions where his goal is to reflect on the pain and get to the root of the problem. If he succeeds, he'd gain a gem in the form of a principle. There have been many gems throughout his life, and he compiled and shared them in this book.
• IMPORTANCE OF PRINCIPLES! • "The most important thing i learned is an approach to life based on principles that helps me find out whats true and what to do about it." • "Principles are fundamental truths that serve as the foundations for behaviour that gets you what you want out of life. They can be applied again and again in similar situations to help you achieve your goals." 1) What do you want? 2) What is true? 3) What should you do to achieve what you want in light of what is true? • "Having a good set of principles is like having a good collection of recipes for success." • "The lesson? When everybody thinks the same thing - such as what a sure bet the Nifty 50 is - it almost certainly reflected in the price, and betting on it is probably going to be a mistake." • "The most painful lesson that was repeatedly hammered home is that you can never be sure of anything: There are always risks out there that can hurt you badly, even in the seemingly safest bets, so its always best to assume you're missing something. This lesson changed my approach to decision making in ways that will reverberate throughout this book - and to which I attribute much of my success." • "There is almost always a good path that you just haven't figured out yet, so look for it until you find it rather than settle for the choice that is then apparent to you." • "I believed strongly that we should bring problems and disagreements to the surface to learn what should be done to make things better. So Ross and i worked to build out an "error log" in the trading department." • "I saw that to do exceptionally well you have to push your limits and that, if you push your limits, you will crash and it will hurt a lot. You will think you have failed - but that won't be true unless you give up. Believe it or not, your pain will fade and you will have many other opportunities ahead of you, though you might not see them at the time. The most important thing you can do is to gather the lessons these failures provide and gain humility and radical open-mindedness in order to increase your chances of success. Then you press on." • "I learned a great fear of being wrong that shifted my mind-set from thinking "Im right" to asking myself "how do i know I'm right". And I saw clearly that the best way to answer this question is by finding other independent thinkers who are on the same mission as me and who see things differently from me. By engaging them in thoughtful disagreement, id be able to understand their reasoning and have them stress-test mine. That way, we can all raise our probability of being right." • "What happens after we crash is most important. Successful people change in ways that allow them to continue to take advantage of their strengths while compensating for their weaknesses and unsuccesful people don't." • "making money in the markets is tough." • "Learning from history: What had happened, after all, was "another one of those"." • "Meditation has benefited me hugely throughout my life because it produces a calm open-mindedness that allows me to think more clearly and creatively."
"I gradually learned that prices reflect peoples expectations, so they go up when actual results are better than expected and they go down when actual results are worse than expected. And most people tend to be biased by their recent experiences. p. 11"
The utility of the content in the book is worth 5 stars but I'm docking a star for the smarmy tone within the historical section about early Bridgewater and early-career Dalio. I'm certain I will return to the material and continue to dig out sometimes radical approaches to my life and work, but I'm also pretty sure I'll never go cover to cover again.
I'm always interested to read how smart people think, but I found this book somewhat baffling. What is new that Dalio thinks he is saying here? I guess it is that good lives and good companies have principles that are evaluated with experience. Does anyone not know this? Socrates said something along these lines a while back. I think Dalio's book says more about the industry he works in than the remarkableness of Bridgewater. I wouldn't work for a place where I couldn't say what I thought. Is that how most investing firms are run?
You have to read Great Man biographies with heavy doses of salt. Dalio was lucky enough to get into commodities when financial instruments still made sense and he was able to get an intuition for concepts like hedging and options. He was also around for the microcomputer revolution. These are probably more important to Bridgewater's success than any weird organizational principles--although I would have liked to hear more about how they are turning management into algorithms!
Besides conflating normative and descriptive claims about organizations based on anecdotal evidence (which is pretty common to business books), the main issue is that Dalio doesn't understand what a principle is. You can turn hypotheses into algorithms which can be applied everywhere, but not principles. Principles require judgment to determine whether or not you should exercise them. Good principles are in tension. For example, at Amazon, the principles of 'Dive Deep' and 'Deliver Results' can be in tension. Some of the things Dalio talks about are principles (like evaluating ideas meritocratically) but some are hypotheses (like sorting people into categories using Myers-Briggs).
Kant was probably the philosopher who most tried to systematize thinking into universal principles, but he eventually realized that you can't get rid of judgment. I used to teach his moral philosophy, in which he says that a good moral principle can be universalized by everyone for all time. But all of his examples don't work in practice, including being truth-seeking. You should tell everyone the truth all the time--except when you shouldn't! Our society would crumble if we all told the truth all the time, as Dalio suggests.
The principles Dalio talks about are pretty sensible, by-and-large. We should have more open and honest discussion. But the way to do this isn't to get everyone aligned on principles. It's not like there are people who like truth and people who don't. We need habits, institutions, practices, norms, and relationships that support inquiry. The best parts of the book are the ideas Dalio has for supporting honest communication, like the issue log, or getting to the root cause of an issue.
Will still probably read volume 2 on economics and investing--Dalio should be on firmer ground here.
In sum: - know what matters. - design and build a great machine. - cultivate an idea meritocracy. - commit to know the truth. - be radically open minded and transparent. - hire and listen to reliable people. - argue productively. - hire people who are good, reliable and productive. - fire people who aren’t great, even if you like them. - sit back and watch beautiful shit happen.
I like Ray, but this book made me cringe. I won't leave my full review (it has many not-so-nice words). But I'll say this, Ray talks about "meritocracy" and "radical whatever" a thousand times in the book. He obviously talks about his principles. What he wants you to know is this:
What he doesn't account for, and what most successful people don't account for, is luck. Always, the real formula is:
(Whatever a successful person says) + Luck = SUCCESS
I know that Ray is not the first, and not the only, person to implement that formula. He did it, and luck was on his side. I wish Ray would have acknowledged this in his book.
Secondly, while some principles are good, most are demeaning to people. Ray tells the reader that at Bridgewater, they would make baseball cards with people's qualities. I find it very offensive and reductive; humans are more than adjectives and numbers. I have some qualities that unconsciously affect me but my coworkers don't know about (because I don't want them to know).
I much more enjoyed the original pdf he put out - it's a lot more succinct, and lacks the editorial polish a book needs (I think that's a plus). If you can find it, read it. The book can be skipped.
Basically three parts: 1) background on Dalio and Bridgewater (interesting, but only if you're into biographies or accounts of important companies); 2) advice for how to live one's own life 3) principles for engineering and managing a company. 2 is probably of the widest appeal, and 3 is what I found the most interesting (although also the most hit-or-miss).
I'm friends with an ex-Bridgewater employee, and I knew of Dalio and Bridgewater but not in any great detail. The biography was interesting to me, but didn't really go into great detail; it's maybe on par with a long-form magazine article about the man and his firm.
Dalio's advice for individuals and companies basically boils down to harnessing the power of feedback, iteration, and improvement in response to failure. Simple to say, but hard to implement, and much of his advice was how to create systems (individually or for an organization) to accomplish this. For an individual, the challenge is primarily psychological -- being able to reflect on one's actions at a higher meta level than just doing the work itself, because you're always both the do-er and the manager. For organizations, the challenge is essentially the central problems of economics -- aligning incentives, culture, and unintended consequences. This is where he had some of the best concrete advice, about tools Bridgewater developed and used (and which he says he will release), and also about the need for greater organizational controls once he wasn't directly running things. I don't think he went far enough in admitting the problems with the bridgewater model, and lack of applicability -- it only really works when everyone has aligned incentives, which I believe is only possible in small groups or in organizations throwing off so much cash that no one is concerned about scarcity -- the Bridgewater management style would not be a viable way to run a large retail empire like Wal-mart, and he didn't seem to understand or admit this.
Overall, it's a good book. The individual principles are good to have in one's toolbox, and the organizational structuring advice is good if not taken as gospel or in isolation. I do wish I'd worked at Bridgewater when Dalio was there, to see this stuff happen in realtime, but maybe I'll be able to implement some of these tools with my own teams in the future.
Read a summary & save yourself the time. The level of codification of principles in this book is impossible to retain, let alone put into practice. The same ideas get repeated over & over again. A few helpful nuggets here & there, but overall not worth the effort to go through the entire book.
I did not enjoy this book. In general, his principles are quite intuitive and obvious in my opinion. I picked it up because it seemed to be so popular, and I sometimes get pulled into that trap for some reason. Much of the first half seemed self-indulgent, but it got a little better when he started talking about his principles, but overall I didn't take anything away from this book.
There are probably a few reasons why you might not intuitively take well balanced life advice from a hedge fund manager, but Dalio is an interesting character with a fascinating life story (which the first part of the book goes through).
Overall, the advice you should take from this book is less about how to live your life, but rather how to go about deeply thinking about the decisions you make and the pain you inevitably confront, structuring your learnings for the future to keep iterating on that structure forever.
I wrote a blog post about my own meager attempts on a similar approach to structure a certain life decision process (http://sten.tamkivi.com/2013/12/manag...) -- but Dalio has had 40+ years to work on his, so goes way and beyond in breath.
While I don't think I'd ever build a fully radically transparent organization at scale (like Bridgewater is), many of his specific principles are worth pondering about. Pausing after pain, thinking about human systems as complex machines (where you can in turn distinguish if you're in a designer or worker mode, at any given time) are examples of concepts that stuck. See more from my highlights here: https://www.goodreads.com/notes/34941...
Миллиардеры редко пишут книги. Чаще всего пишут книги о них и в большинстве случаев получается набор красивых историй, где преодолев трудности герой оказывается на вершине. В таком случае мы никогда не узнаем, что реально он пережил, что хотел и чувствовал на пути к успеху. Читатель такой книги попадает в ловушку личного мнения и выводов автора.
В случае с Реем Далио книгу писал он сам и очень откровенно показал свои сильные и слабые стороны, а главное принципы на основе которых он живет и ведет бизнес уже более 40 лет. Это большая редкость, когда очень успешный человек открыто выкладывает все свои подходы в бизнесе и главные жизненные принципы. Книга четко структурирована, никакой воды, бери и сразу применяй в компании.
Первый раз мне захотелось в Goodreads поставить книге оценку 6 по пятибальной шкале) Когда я закончил читать Principles, то сразу же начал её перечитывать снова.
- По Далио жизнь похожа на реку, в которой мы плывем и неизбежно сталкиваемся на пути с различными препятствиями. Мы не можем выйти из реки и остановить течение. Всё что мы можем - это научиться хорошо проходить встречи с проблемами и препятствиями, которые нам бросает жизнь.
- Для того чтобы успешно проходить столкновения с реальностью надо понять и усвоить набор принципов. Принципы делятся на две группы. Общие жизненные принципы и принципы для работы. Принципы вырабатываются после каждой встречи с проблемой, ее решением и потом осмыслением результатов, чтобы на будущее выработать максимально эффективный и правильный подход для такой же ситуации.
И еще. Прежде чем бежать и начинать внедрять принципы Рэя Далио вспомните о культурных различиях американцев и русских. Не всё, что сработало у него в бизнесе, сработает в российской компании.
(3.0) don’t read the autobiographical part, section on decision-making (chapter 5 of work principles I think) was great. I DO look forward to reading his book on investing principles; they're probably spot on.
Auto bio is useless and set me up to dislike/distrust the rest. He loves himself so much, takes credit for almost everything, makes empty statements about striving for “meaningful work and meaningful relationships,” but didn’t demonstrate that he really found either. Saying it over and over doesn’t make it true. Sounds like he made a ton of money and parties with the people he did it with. Ok.
He has some useful principles, but probably distinguished himself the most by really sticking to them, using them to explain/justify decisions. I see a lot of parallels between his principles andAmazon’s leadership principles, which is interesting. I see a fair bit of cultural overlap as well, though there were some significant differences (eg naming names in root cause analysis, and assumption that often root cause is a flaw in a person as/more often than in the process).
I liked the section on decision making, knowing how to identify the right people to trust when getting advice about a decision and ways to rationally make decisions in the face of deadlocked disagreement.
This is sold under 'business/management' but it should be 'self-help'. I really wanted to like this book but can't bring myself to even finish it. Hearing things like 'Principle 4.2.2' made it very difficult to keep up with the principles structure and hierarchy, quickly losing what Dario is trying to communicate. I think Dario is fond of categorization and pattern identification (perhaps from his work as an investor) - but such organization is more suited to a text book rather than a self-help one. Despite others disliking the auto-biography part, I found helpful in setting the tone of the book. It was more of capturing of a journey that lead somewhere, but not necessarily the same journey everyone should take. Overall - I was surprised how it originally highly recommended (especially among entrepreneurs), I hope I can finish it after perhaps listening to a more intellectual book.
I was afraid that very hyped "Principles" may be useful just for people interested in investment funds or similar paths of career, but fortunately it's not the case. Book gets a rather slow start - Dalio presents his reasoning for a book like that (very valid) & then goes through the history of his life, showing how principles have help him to get where he currently is - frankly, it's the weakest part of the book.
But then, suddenly things get better, when author gets straight to Principles. There are many of them, they are elaborated in detail, can't be easily synthetised / simplified to the simple checklist. But what they represent is a quintessence (seriously) of getting shit done elixir in high performance business. I worked for 13 years in effect-oriented, mature & well-organized high-profile company & I can easily find the resemblance between Ray's Principles & what I've personally learned (hard or easy way) during my career. I just wish I had a book like that when I was starting.
Principles are crisp, concrete, clear, to the point & well-described. There's no bullshit, "sweet farting", over-theorising or falling into zealotry over high but unrealistic ideals. I'm not sure how it will be perceived by people who weren't exposed to similar culture (to Bridgewater's) before, but during my read I was nodding like crazy, almost to the neck-ache :)
Good stuff, kudos to Mr. Dalio for sharing his Principles in such an elaborated way with a wider audience. Book is hyped, but not over-hyped.
This book came to me highly recommended but on reading it I don't think it lives up to the hype.
As a book standing on its own two legs it's just not very good. Far too long, repetitive, and riddled with turgid prose. I suspect if this book was written by a mere millionaire (rather than billionaire) it wouldn't have the fans that it does. I also felt like the bulk of the principles were at an odd level of abstraction: not quite low level enough to be immediately useful but also not high-minded enough to be universal.
I did find a fair amount of really useful nuggets in there though. When the book got into more tactical matters there was often a nice and tidy formulation of a management idea that I hadn't seen laid out quite so nicely before. They were just too few and far between for the page count.
I also have zero time for someone who advocates radical truth seeking and Myers–Briggs type indicators in the same book.
Ray Dalio came across as a flake. Ray was at the right place, at the right time, and made a lot of money. Not sure why everyone that has money thinks we need to hear from them. 12 hours of my life that I will never get back. Skip the book and wait for the movie.
disclaimer: i switched to the original pdf version of this book about 200 pages in, i think the book could have been condensed significantly.
i found a lot of the generalizations from this book questionable in their 'truthiness'. there were moments when dalio describes how planning a project should take no more than between "10-15 hours" or something of the like, which i found absurd as an across-the-board rule independent of any kind of context. i'm not sure if this was only present in the pamphlet though. there were also repeated appeals to evolution as an explanation for everything in the universe, which i also found meaningless and inaccurate. the tone of the book often seems exaggerated and imprecise, two qualities that really detracted from the value of the book for me.
there was some interesting advice however on the mechanics of structuring a project, and i enjoyed reading about how ray dalio started bridgewater/is supposedly responsible for creating the chicken mcnugget.
Ray Dalio's thought process is straightforward: your company succeeds if the best idea wins out every single time. Then how do you know which one is the best idea? To Ray Dalio, the best idea is the one that feeds off the best ideas. Hence, people gotta be honest and contribute what they actually believe to be the best ideas. After having all the best ideas on the table, you would have to somehow synthesize them all. You wouldn't give equal weight to every idea. You have to come up with a more objective set of metrics. In order to be objective, the metrics would give more weight to the person that has a more proven track record (believability-weighted). But idea synthesis can be messy, and hence more principles and rules to make sure things run smoothly and turn out well. For a company, "Radical transparency" and "Idea Meritocracy" are the kind of extreme standard for machine-like accuracy and efficiency.
This book is more than just about tough love. Underlying "Radical transparency" and "Idea Meritocracy" is a philosophical belief that humans are imperfect and hubris is the downfall of man. Much as the book makes an respectable effort to bridge the realms of ideal and reality by proposing the principles that have held true for 40 years at one of the most admirable companies in the world, the biggest question very much remains whether such a humanly transcendental idea can be humanly sustainable and applicable. Ask yourself if you would ever like to work in a company that strives to be a machine. Ask yourself if extreme efficiency and accuracy should be the most valued criteria for a company's success, even at the expense of meaningful relationships. Also, ask yourself if Dalio's idea is the best idea yet.
Ray Dalio’s 5 step process to get what you want out of life: 1. Set goals 2. Identify & don’t tolerate problems 3. Diagnose the problems to root causes 4. Design a plan that will get you around your problems 5. Take action - execute on the plan