In case anyone else hasn't heard of this person, stolen from Googles:
Raymond Dalio is an American billionaire investor, hedge fund manager, and philanthropist. Dalio is the founder of investment firm Bridgewater Associates, one of the world's largest hedge funds. Wikipedia
seems to be responding with Rampart-esq canned generic answers without any real substance to them.
Q: Seeing as we are almost 10 years into a bull market, would you be willing to share some of your big Economic and Investment Principles so that average folks can be protected during the inevitable bear market?
A: Think about how to rotate your portfolio to buy that which is cheap and sell that which is expensive.
Q: o you have any rules for segmenting your schedule (is there a specific allocated amount of time for personal, family, or business) and if so, what does that look like?
A: If you have my book Principles, there’s one about this idea, Prioritize: While you can have virtually anything you want, you can’t have everything you want.
Q: What is the number 1 thing a young investor can do to improve their investing abilities?
A: Dive into the markets, have the shit kicked out of you, and learn how to do things differently.
> A: If you have my book Principles, there’s one about this idea, Prioritize: While you can have virtually anything you want, you can’t have everything you want.
Sounds obvious but if you've ever worked for an organization or with an individual that prioritizes by buckets or labels ('Urgent', 'Extremely Urgent') versus a queue (a Trello column)†, then you've seen how non-obvious and pervasive this can be.
Agreed, a more detailed answer may have been more useful.
It's a little more subtle than that. He's saying that if you have an existing portfolio and you're worried about a market correction you should start selling off your expensive assets that have already appreciated and buy ones that are currently cheap. Obvious? Probably. But still something most people don't do.
Except knowing this is not the hard part - even professional investors sell too early on the upside and hold on to the losers too long. What does "already appreciated" mean? Is it Amazon today? or stock you bought for $60 and sold for $300? Is Walmart "cheap" today because they're well positioned for distribution from digital sales, or expensive because their bricks&mortar stores are dinosaurs?
So, yeah, we can mine his answers for subtle nuance, but it seems we quickly return to the crux, which is "but how?"
A long time ago, I read about a guy who made a lot of money on the market. Someone asked him how. He said, "I always sold too soon."
You aren't going to know if it's too soon to sell Amazon. But if you wait until it's not too soon, it will be too late.
But of course, there's "too soon" - say, when you've made 70% of the possible gains. And there's "really too soon" - when you've made 5% of the gains. How do you know which is which? I don't know.
A:
I’d just dive in and place bets know how to learn from my experiences. I wrote about how to do that in my book, which is largely about how to convert mistakes into learned principles that work, and how to save these principles and use them in computers so that your thinking is not constrained by your brain’s capacity to juggle a lot of things at the same time.
There is no better learning than that which comes from experiences and quality reflections on those experiences. It doesn’t matter whether you do it at a hedge fund, or any other place, but I would recommend that you do it around other smart people who help you brainstorm on the best answer.
You've selectively trimmed down his responses to the most generic-sounding lines.
The general theme in the AMA is to jump in, accept you'll make mistakes, think critically about what succeeds and fails, and leverage technology to automatically apply what you learn.
Or, from another article, "working for what he wants, not what others want him to do, coming up with independent opinions and testing them on intelligent people, being wary about overconfidence, and reflecting on his mistakes."
This is the antithesis of "expect a billionaire hedge fund manager to spoon feed you specific investing strategies on a Reddit AMA."
I'm sorry but this is superb advice, all three. It took me most of my life to learn to prioritize. He might have expanded a bit (focus is always about saying no, not about what you elevate), but he's right in all three cases.
Just yesterday I saw an ad for Ray's book in the print WSJ. Full page. It was filled with quotes from people you've heard of giving 1 line compliments of essentially no substance in particular.
The first one (was on the middle of the print ad page) was from Bill Gates who said
"Ray Dalio HAS PROVIDED ME WITH INVALUABLE GUIDANCE".
Ray was someone who has agree to Bill's Billionaire Pledge idea and no doubt they rub elbows. So honestly he isn't even referring to what is in the book and why would Bill Gates even need advice from Ray? I am sure he gave him private investment ideas ... great.
Most are really lame (with no creativity or specificity) like Mark Benioff who says
"PRINCIPLES BY RAY DALIO IS A MASTERPIECE IT'S A MUST READ!"
Actually all of the quotes are all caps.
Here is what I'd like to see. Not quotes from people who have made it who have (obviously) been asked to submit a quote (they all trade quotes with each other, right). But by real people who have read a book and can document something they learned and how it helped them in their life in a specific nature.
Also I always wonder why a billionaire seems to need to write a book like this to begin with.
I’m a real person and I read the book and I enjoyed it. I will say any “self-help” style book like his just has quotes like that and you can never tell if they are legit.
If you’ve read the “hard thing about hard things”, i found it pretty similar. It’s a mix of an autobiography as well as listing out his main life principles. It gets repetitive sometimes and I wish he’d get more specific in the details but overall I recommend it. Especially if you are in some sort of leadership or management position
Yeah and actually what I simply noticed was a promotional pattern that reminded me of things I read as a kid at my Dad's office and to this date. Generally for real estate investing where someone would send out newsletters with little actual information just general platitudes praying on people's lack of sophistication or simply looking for easy answers.
One other important thing is that there are also things that are missing from a book like this that might matter in terms of why a particular action worked. (At a particular point in time) Because they might appear to be sleezy (even if they aren't) and someone might not want to mention them for wide review or reading or have them known. So honestly you never really know the full story and without the full story it's hard to nail down exact steps and honestly you can't do that anyway (for example you can't control luck). [1]
[1] Not a great example but let's take an actress writing a book on how she got her first gig in Hollywood but she fails to mention how the director had the hots for her and what she might have done to lead him on into thinking she would sleep with him. Instead she just talks about things she can and people reading give that greater weight.
I had a personal impression that the PDF which was supposedly internal and then released into a publicly accessible host was more substantial than the book, which was disappointing. There were a couple of value-addeds that let me know that if Dalio's honest, then I'm going in the right direction - like using a cognitive assistant to coordinate my thinking. Yet there's a lot of implementation-level blanks to be filled which require some searching to find adequate procedural advice.
But you're right all around. There probably wouldn't be anything that will severely compromise a trade since to build up the model towards that trade, even if it follows some vaguely general learning procedure like Ray espouses, will have taken hundreds of thousands of dollars of labor costs and would have millions of dollars of opportunity costs on the line if people got in on the action. Why risk it?
Its a good book, with some useful insights, some interesting vignettes from the author's well lived life. He comes across as someone who genuinely wants to help others by teaching the system he developed - which he obviously regards as a key to his success and happiness. I don't see why being a billionaire should make him reticent to do this.
Another reason that people like Dalio write books like this it to be able to justify their success for reasons other than just luck.
It's them saying "Sure I have a billion dollars but I deserve it because":
a) I have worked hard and long hours
b) I am crafty and curious
c) I think and I do smart things
d) I put in a great deal of work and effort.
I remember long ago reading a book "Swim with the Sharks" about a guy who ran a envelope company. In reading what he said was the reason for his success were (from memory) a bunch of things that honestly all business people of that stature (small businessmen) generally do. I had heard those things in person (in various ways) from countless others. This author (Harvey Mackay) was all the rage in the 80's because he put in writing in a way that most people didn't realize was already common knowledge and being done. [1] The press loved it because it was folksy. Not the same as Dalio here but was a great marketing tool for Mackay and made him a mini celebrity.
[1] One of the things I remember in particular was his way of noting little things about people that he sold to so when he met them again he could act as if he cared about them. (He did I guess otherwise he wouldn't have taken the time to note things about them but it was really that he cared about getting more business not that he actually did care about them in a personal way).
I read it, and thought it was really good. I took a bunch of notes on it and wrote down some of my favorite principles. Here are two and the notes I took on them:
1. Think of yourself as a machine operating within a machine; and know you have ability to alter machines to produce better outcomes.
- distinguish between you as the designer of your machine, and you as a worker within your machine
- it's much more important that you are a good designer/manager of your life than a good worker in it
"To be successful, the "designer/manager you" has to be objective about what the "worker you" is really like, not believing in him more than he deserves, or putting him in jobs he shouldn't be in. Instead of having this strategic perspective, most people operate emotionally and in the moment; their lives are a series of undirected emotional experiences, going from one thing to the next."
2. reality exists at different levels; each gives valuable perspectives
- we're constantly seeing things at different levels and navigating between them
- > i want meaningful work
- >> i want to be a doctor
- >>> i need to go to med school
- >>>> i need to get good science grades
- >>>>> i need to stay in tonight and study
- when line of reasoning is jumbled, it's often because speaker has gotten caught up in below the line details without connecting them back to major points
- only go below the line if it's necessary to illustrate something about a major points, and make sure you synthesize and tie things back
I was struggling with hiring and growing my team and Principles has a great section that helped me out.
Hire for values, abilities, and skills in that order. I went from having no idea what I was doing to having a decent blueprint.
He also writes that when you find the right person for the role there is almost an audible click. Whether for better or for worse, I am now always on the lookout for that click.
The book is great because it's very well organized with an index.
Also the way he runs Bridgewater is really interesting. It's structured with the goal to surface the best ideas and figure out which opinions are most likely to be correct. It's an "idea meritocracy" and a culture of radical transparency. Everything is recorded and made available to everyone else in the company. Employees are very candid, brutally honest, even with the CEO (Ray). He says a lot of people churn out in the first year or so, but those that get used to it love it and can't imagine working another way. His Ted Talk goes into quite a bit of detail about how it all works: https://www.youtube.com/watch?v=HXbsVbFAczg
And a "cult" around an idea meritocracy means that most of the problems of cults won't happen, because decisions will get made on the merits, rather than on ideology.
You see that in most things different + good; or something just plain great, even if it's not unusual. Apple, Lego, Ferrari, Zelda. You see it frequently in clothing, from bras to shoes, and in makeup. Lifestyle brands often develop cultish circles around them, as with Harley or Airstream, or Lululemon and Starbucks in the early days. Even in more plain/simple products like Lodge's iron cookware.
Sometimes they go more mainstream culturally like Zelda or Lego. Other times exclusion keeps the cult smaller, as with Ferrari.
It's rare for something to be great without developing a bit of a cult around it.
> What book or books have had the biggest impact on your life and world view and why?
> RayTDalio:
> Three great books were:
> Lessons from History by Will and Ariel Durant, which is a 104-page distillation of the themes of history by great historians who covered 500 years of history in all countries.
> A River From Eden by Richard Dawkins, which in a little over 100 pages covers all evolution of all life through time.
> Joseph Campbell’s Hero of a Thousand Faces, which looks at the archetypical life evolutions of all heroes through different civilizations through time.
38 comments
[ 3.2 ms ] story [ 78.6 ms ] threadRaymond Dalio is an American billionaire investor, hedge fund manager, and philanthropist. Dalio is the founder of investment firm Bridgewater Associates, one of the world's largest hedge funds. Wikipedia
Stolen from Wikipedia then.
Q: Seeing as we are almost 10 years into a bull market, would you be willing to share some of your big Economic and Investment Principles so that average folks can be protected during the inevitable bear market?
A: Think about how to rotate your portfolio to buy that which is cheap and sell that which is expensive.
Q: o you have any rules for segmenting your schedule (is there a specific allocated amount of time for personal, family, or business) and if so, what does that look like?
A: If you have my book Principles, there’s one about this idea, Prioritize: While you can have virtually anything you want, you can’t have everything you want.
Q: What is the number 1 thing a young investor can do to improve their investing abilities?
A: Dive into the markets, have the shit kicked out of you, and learn how to do things differently.
Yea no shit, great "advice".
Sounds obvious but if you've ever worked for an organization or with an individual that prioritizes by buckets or labels ('Urgent', 'Extremely Urgent') versus a queue (a Trello column)†, then you've seen how non-obvious and pervasive this can be.
Agreed, a more detailed answer may have been more useful.
†Full disclosure: I have.
Buy low, sell high. How enlightening this guy is...
There in lies the rub.
So, yeah, we can mine his answers for subtle nuance, but it seems we quickly return to the crux, which is "but how?"
You aren't going to know if it's too soon to sell Amazon. But if you wait until it's not too soon, it will be too late.
But of course, there's "too soon" - say, when you've made 70% of the possible gains. And there's "really too soon" - when you've made 5% of the gains. How do you know which is which? I don't know.
There is no better learning than that which comes from experiences and quality reflections on those experiences. It doesn’t matter whether you do it at a hedge fund, or any other place, but I would recommend that you do it around other smart people who help you brainstorm on the best answer.
The general theme in the AMA is to jump in, accept you'll make mistakes, think critically about what succeeds and fails, and leverage technology to automatically apply what you learn.
Or, from another article, "working for what he wants, not what others want him to do, coming up with independent opinions and testing them on intelligent people, being wary about overconfidence, and reflecting on his mistakes."
This is the antithesis of "expect a billionaire hedge fund manager to spoon feed you specific investing strategies on a Reddit AMA."
Some of them are on this page:
https://www.principles.com/
The first one (was on the middle of the print ad page) was from Bill Gates who said
"Ray Dalio HAS PROVIDED ME WITH INVALUABLE GUIDANCE".
Ray was someone who has agree to Bill's Billionaire Pledge idea and no doubt they rub elbows. So honestly he isn't even referring to what is in the book and why would Bill Gates even need advice from Ray? I am sure he gave him private investment ideas ... great.
Most are really lame (with no creativity or specificity) like Mark Benioff who says
"PRINCIPLES BY RAY DALIO IS A MASTERPIECE IT'S A MUST READ!"
Actually all of the quotes are all caps.
Here is what I'd like to see. Not quotes from people who have made it who have (obviously) been asked to submit a quote (they all trade quotes with each other, right). But by real people who have read a book and can document something they learned and how it helped them in their life in a specific nature.
Also I always wonder why a billionaire seems to need to write a book like this to begin with.
If you’ve read the “hard thing about hard things”, i found it pretty similar. It’s a mix of an autobiography as well as listing out his main life principles. It gets repetitive sometimes and I wish he’d get more specific in the details but overall I recommend it. Especially if you are in some sort of leadership or management position
This is in stark contrast with John Doerr’s recent book, Measure What Matters, which is only examples of implementation.
One other important thing is that there are also things that are missing from a book like this that might matter in terms of why a particular action worked. (At a particular point in time) Because they might appear to be sleezy (even if they aren't) and someone might not want to mention them for wide review or reading or have them known. So honestly you never really know the full story and without the full story it's hard to nail down exact steps and honestly you can't do that anyway (for example you can't control luck). [1]
[1] Not a great example but let's take an actress writing a book on how she got her first gig in Hollywood but she fails to mention how the director had the hots for her and what she might have done to lead him on into thinking she would sleep with him. Instead she just talks about things she can and people reading give that greater weight.
But you're right all around. There probably wouldn't be anything that will severely compromise a trade since to build up the model towards that trade, even if it follows some vaguely general learning procedure like Ray espouses, will have taken hundreds of thousands of dollars of labor costs and would have millions of dollars of opportunity costs on the line if people got in on the action. Why risk it?
If you’ve started a business, or manage people in a business, this book is worth more than many MBA courses.
The fact that a person with his exceptional track record decided to share much of the Bridgewater “secret sauce” is rare, and a real treat.
It's them saying "Sure I have a billion dollars but I deserve it because":
a) I have worked hard and long hours b) I am crafty and curious c) I think and I do smart things d) I put in a great deal of work and effort.
I remember long ago reading a book "Swim with the Sharks" about a guy who ran a envelope company. In reading what he said was the reason for his success were (from memory) a bunch of things that honestly all business people of that stature (small businessmen) generally do. I had heard those things in person (in various ways) from countless others. This author (Harvey Mackay) was all the rage in the 80's because he put in writing in a way that most people didn't realize was already common knowledge and being done. [1] The press loved it because it was folksy. Not the same as Dalio here but was a great marketing tool for Mackay and made him a mini celebrity.
[1] One of the things I remember in particular was his way of noting little things about people that he sold to so when he met them again he could act as if he cared about them. (He did I guess otherwise he wouldn't have taken the time to note things about them but it was really that he cared about getting more business not that he actually did care about them in a personal way).
1. Think of yourself as a machine operating within a machine; and know you have ability to alter machines to produce better outcomes.
- distinguish between you as the designer of your machine, and you as a worker within your machine
- it's much more important that you are a good designer/manager of your life than a good worker in it
"To be successful, the "designer/manager you" has to be objective about what the "worker you" is really like, not believing in him more than he deserves, or putting him in jobs he shouldn't be in. Instead of having this strategic perspective, most people operate emotionally and in the moment; their lives are a series of undirected emotional experiences, going from one thing to the next."
2. reality exists at different levels; each gives valuable perspectives
- we're constantly seeing things at different levels and navigating between them
- when line of reasoning is jumbled, it's often because speaker has gotten caught up in below the line details without connecting them back to major points- only go below the line if it's necessary to illustrate something about a major points, and make sure you synthesize and tie things back
Hire for values, abilities, and skills in that order. I went from having no idea what I was doing to having a decent blueprint.
He also writes that when you find the right person for the role there is almost an audible click. Whether for better or for worse, I am now always on the lookout for that click.
The book is great because it's very well organized with an index.
You can also see for yourself the key points in this pdf: https://inside.bwater.com/publications/principles_excerpt
Also the way he runs Bridgewater is really interesting. It's structured with the goal to surface the best ideas and figure out which opinions are most likely to be correct. It's an "idea meritocracy" and a culture of radical transparency. Everything is recorded and made available to everyone else in the company. Employees are very candid, brutally honest, even with the CEO (Ray). He says a lot of people churn out in the first year or so, but those that get used to it love it and can't imagine working another way. His Ted Talk goes into quite a bit of detail about how it all works: https://www.youtube.com/watch?v=HXbsVbFAczg
His book Principles lays out the foundation. Excerpt: https://inside.bwater.com/publications/principles_excerpt Videos: https://www.youtube.com/user/Bridgewater
The trick is to recognize when such patterns of intense synchronization are beneficial, and when they are abusive.
Sometimes they go more mainstream culturally like Zelda or Lego. Other times exclusion keeps the cult smaller, as with Ferrari.
It's rare for something to be great without developing a bit of a cult around it.
> RayTDalio: > Three great books were:
> Lessons from History by Will and Ariel Durant, which is a 104-page distillation of the themes of history by great historians who covered 500 years of history in all countries.
> A River From Eden by Richard Dawkins, which in a little over 100 pages covers all evolution of all life through time.
> Joseph Campbell’s Hero of a Thousand Faces, which looks at the archetypical life evolutions of all heroes through different civilizations through time.
Ray Dalio - How the Economic Machine Works - Leveragings and Deleveragings(https://github.com/functionalflow/brains/blob/master/Zen-Of-...)
Ray Dalio - Principles(https://github.com/functionalflow/brains/blob/master/Zen-Of-...)