Principles: Life and Work

by Ray Dalio

By failing well, I mean being able to experience painful failures that provide big learnings without failing badly enough to get knocked out of the game.

When everybody thinks the same thing—such as what a sure bet the Nifty 50 is—it is almost certainly reflected in the price, and betting on it is probably going to be a mistake.

In trading you have to be defensive and aggressive at the same time. If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep money.

I learned a great fear of being wrong that shifted my mind-set from thinking “I’m right” to asking myself “How do I know I’m right?”

Seek out the smartest people who disagreed with me so I could try to understand their reasoning. 2. Know when not to have an opinion. 3. Develop, test, and systemize timeless and universal principles. 4. Balance risks in ways that keep the big upside while reducing the downside. Doing these things significantly improved my returns relative to my risks, and the same principles apply in other aspects of life.

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 unsuccessful people don’t.

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.

was most important wasn’t knowing the future—it was knowing how to react appropriately to the information available at each point in time.

I love getting to know interesting people from interesting places and seeing the world through their eyes.

Every time I speak with Wang, I feel like I get closer to cracking the unifying code that unlocks the laws of the universe.

Instead of feeling frustrated or overwhelmed, I saw pain as nature’s reminder that there is something important for me to learn.

In time, I realized that the satisfaction of success doesn’t come from achieving your goals, but from struggling well.

You need to get over all that and stop seeing struggling as something negative. Most of life’s greatest opportunities come out of moments of struggle; it’s up to you to make the most of these tests of creativity and character.

You will never handle everything perfectly: Mistakes are inevitable and it’s important to recognize and accept this fact of life. The good news is that every mistake you make can teach you something, so there’s no end to learning. You’ll soon realize that excuses like “that’s not easy” or “it doesn’t seem fair” or even “I can’t do that” are of no value and that it pays to push through.

Given billions of neurons, this means that there are as many connections in a single cubic centimeter of brain tissue as there are stars in the Milky Way galaxy.

I’ve found that shapers tend to share attributes such as intense curiosity and a compulsive need to make sense of things, independent thinking that verges on rebelliousness, a need to dream big and unconventionally, a practicality and determination to push through all obstacles to achieve their goals, and a knowledge of their own and others’ weaknesses and strengths so they can orchestrate teams to achieve them.

Your greatest challenge will be having your thoughtful higher-level you manage your emotional lower-level you. The best way to do that is to consciously develop habits that will make doing the things that are good for you habitual.

Asking others who are strong in areas where you are weak to help you is a great skill that you should develop no matter what, as it will help you develop guardrails that will prevent you from doing what you shouldn’t be doing. g.

Everyone has his or her own principles and values, so all relationships entail a certain amount of negotiation or debate over how people should be with each other.

Being effective at thoughtful disagreement requires one to be open-minded (seeing things through the other’s eyes) and assertive (communicating clearly how things look through your eyes) and to flexibly process this information to create learning and adaptation.

This person must have both the vision to see what should be done and the discipline to make sure it’s accomplished.

It is also more important to have good challengers than good followers.

“Success consists of going from failure to failure without loss of enthusiasm.”