Principles: Life and Work

by Ray Dalio

thoughtful, unemotional disagreement by independent thinkers can be converted into believability-weighted

millions and millions of decisions that are essentially bets,

I also feared boredom and mediocrity much more than I feared failure. For

the U.S. effectively defaulted.

that most everything is “another one of those”: Most

“Liberal” had ceased to mean being in favor of progress and had come to mean “paying people not to work.”

My experience over this period was

like a series of blows to the head with a baseball bat.

encourages thoughtful disagreements and explores and weighs people’s opinions in proportion to their merits.

failures provide and gain humility and radical open-mindedness

knowing how to react appropriately to the information available at each point in time.

Alan Bond,

America’s Cup yacht

New York Cotton Exchange.

Us Dollar index

Charlie Rose

Deng Xiaoping,

high volatility and had learned that the best way to play it was to get a hold of a big move and ride it.

individual assets within an asset class are generally about 60 percent correlated with each other,

currency overlay managers

when faced with the choice between two things you need that are seemingly at odds, go slowly to figure out how you can

have as much of both as possible.

David White,

which shifts in the economic environment caused asset classes to move around, and I knew that those relationships had remained essentially the same for hundreds of years.

Bob Kegan called Bridgewater “a form of proof that the quest for business excellence and the search for personal realization need not be mutually exclusive—and can, in fact, be essential to each other.”

debt service were outpacing projected cash flows.

My fear of being wrong pushed me to seek out other smart folks

Paradigm

Ramsen Betfarhad,

Investors think independently, anticipate things that haven’t happened yet, and put real money at stake with their bets. Policymakers come from environments that nurture consensus, not dissent, that train them to react to things that have already occurred, and that prepare them for negotiations, not placing bets. Because they don’t benefit from the constant feedback about the quality of their decisions

Investors vs policy makers

the political systems they must navigate are often dysfunctional.

They are simultaneously creative, systematic, and practical. They

there are far fewer types of people in the world than there are people and far fewer different types of situations than there are situations, so matching the right types of people to the right types of situations is key.

Just as U.S. policymakers had before 2008, the Europeans did not fear what they hadn’t experienced before.

Their understandings of how markets and economies work were oversimplified, like those of academics.

Luis de Guindos,

China’s Wang Qishan,

I began to see reality as a gorgeous perpetual motion machine,

Mobius strip

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

my attempt to help you succeed by passing

c. Embracing radical truth and radical transparency will bring more meaningful work and more meaningful relationships. My experience, based on watching

Radical o & t

To be “good” something must operate consistently with the laws of reality and contribute to the evolution of the whole; that is what is most rewarded.

Evolve or die.

Reality is optimizing for the whole—not for you.

“learning” that occurs without thinking at all, such as the changes in DNA that encode a species’ adaptations.

Dubious

Desires are things that you want that can prevent you from reaching your goals.

You all need to get over this.

Get over this

c. Remember that there are typically many paths to achieving your goals. You only need to find one that works.

Keynote

Remember that weaknesses don’t matter if you find solutions.

Main takeaway

They oversimplify things and react instinctively. They crave praise and respond to criticism as an attack,

Amygdala

when someone gets “angry with himself,” his prefrontal cortex is sparring with his amygdala (or other lower-level parts of his brain25).

Getting mad at oneself

Aristotle defined tragedy as a terrible outcome arising from a person’s fatal flaw—a flaw that, had it been fixed, instead would have led to a wonderful outcome. In my opinion, these two barriers—ego and blind spots—are the fatal flaws that keep intelligent, hardworking people from living up to their potential.

Fatal flaws and all story telling