December 21, 2017

Principles: Animated Version

Ray Dalio has a net worth of over 17 billion dollars and has been named one of the most influential people in the world.

How did that come to be?

His story starts when he was 12 years old, when he wanted to earn some extra money and became a golf caddie. He overheard people talking about stocks and he ended up investing $300 dollars in stocks and ended up tripling his money shortly thereafter.

During this young age he learned many valuable lessons such as:

Lesson #1: Be an independent thinker. With trading stocks you have to think independently because the price is dictated by the consensus and this idea applies to all of Ray's life and is a really useful idea for him.

Lesson #2: Don't be overconfident.  Make sure you always stress test your ideas and seek smart people to challenge your ideas because some mistakes could be very costly.

Lesson #3: Maturity is the idea of rejecting good opportunities to take even better ones.

Lesson #4: Be radically transparent and open. By doing this the best ideas come to the top and you can really understand how people operate and what motivates them.

Lesson #5: Embrace idea meritocracy. This way everyone has the ability to help influence the group's decisions. Those that are most credible or believable have the most weight in their votes.

Ray Dalio recently wrote a book, Principles where he outlines a lot of his best ideas that he's used to make decisions in his work and life and if these ideas interest you I highly recommend you check it out.

October 26, 2017

Video: Is A Bear Market In Stocks Coming?

Ray Dalio discussed the possibilities for a bear market in U.S. stocks with Bloomberg's Tom Keene on Bloomberg Radio.

Related trading instruments: SPDR S&P 500 ETF Trust(NYSEARCA:SPY), PowerShares QQQ Trust, Series 1 (ETF)(NASDAQ:QQQ), iShares Russell 2000 Index (ETF)(NYSEARCA:IWM), SPDR Dow Jones Industrial Average ETF(NYSEARCA:DIA)

October 25, 2017

Alpha Is a Zero-Sum Game

Alpha is a zero-sum game. I think the for any manager the amount that they have is a function really of almost how much they transact. I think we have the most capacity because we deal in all liquid markets in the world, I mean not only stocks, bonds, currencies, commodities, everything that's liquid and we tend to move very slowly in those positions we take.

October 23, 2017

Ray Dalio: The First Stock That I Bought

I caddied in the 1960s when I was 12, I caddied at a golf course and everybody was talking about the stock market then. The stock market had gone up for a long, long time and whenever you got a haircut or anything you would always be talking about stocks. So I took my caddying money when I earned six dollars a bag and so I would get twelve dollars a round and I took my caddying money and I put it in the stock market. 

I was curious and I remember the first stock that I bought was a company by the name of Northeast Airlines. The only reason I bought it was because it was selling for less than five dollars a share and I figured I could buy more shares so I'd make more money if it went up. That was dumb but I it was a company that was about to go bankrupt and then somebody acquired it. It tripled and I was hooked so I got hooked on the markets at that time.

October 19, 2017

3 Recommended Books

In a recent podcast Tim Ferriss asked Dalio which books he would recommend to any new college graduate, and Dalio responded with three titles he thinks everyone should read: 

"The Lessons of History" by Will and Ariel Durant

"River Out of Eden" by Richard Dawkins

"The Hero with a Thousand Faces" by Joseph Campbell

October 17, 2017

Meaningful Work and Meaningful Relationships

One sentence that I try to describe Bridgewater by it's "meaningful work and meaningful relationships". 

What I want is meaningful work and meaningful relationships through radical truth and radical transparency. So, meaningful work means we're in a mission together, we're excited about we do and we want to do it excellently. That's meaningful work.

Meaningful relationships are these relationships in where there's honesty, where you can argue things through but you always know that there's honesty and that there's mutual caring for each other.

Radical truth means that knowing what is true to be able to deal with reality whether you like the reality or not but to know what reality is.

October 16, 2017

How The Economic Machine Works

The economy works like a simple machine. But many people don't understand it — or they don't agree on how it works — and this has led to a lot of needless economic suffering. I feel a deep sense of responsibility to share my simple but practical economic template. Though it's unconventional, it has helped me to anticipate and sidestep the global financial crisis, and has worked well for me for over 30 years.

October 2, 2017

The Holy Grail of Investing

In a recent podcast, Ray Dalio explained what is in his opinion the Holy Grail of Investing: 

"The Holy Grail of investing, the thing I have learned and it’s the most important is that if I can have 10 or 15, ideally 15 but even if it’s 5 good uncorrelated bets, that`s the Holy Grail. So, the Holy Grail is 15 good uncorrelated bets. (...) Knowing the value of uncorrelated bets is incredibly important. "

Confirmation Bias

I think most people start with an opinion and filter information it comes to them to be consistent with their opinion.

September 29, 2017

A Conversation WIth Ray Dalio: Bloomberg TV

The principles are what make Bridgewater unique, and unusual. Ray Dalio has published his principles in a book, along with his life story, Principles: Life and Work Hardcover – September 19, 2017.

Evolution Is The Greatest Force In The Universe

In a recent podcast with Tim Ferriss, Episode #264: Ray Dalio, The Steve Jobs of Investing, Ray Dalio shared his fascination with evolution: 

"I am fascinated by evolution. I think evolution is the greatest force in the Universe and the purpose of everything is to evolve. We as individuals are just vessels for our DNA`s evolving."

September 28, 2017

3 Things Make Up For A Successful Life

I think three things make up for a successful life, by and large. 

First, you have to have audacious goals, big dreams. Then when you are headed toward those goals you are going to have problems, you are going to have to deal with reality. You have to deal with those problems in that reality, realistically. Learning from your mistake, writing down those principles.

That is the second part, dealing with reality in a practical way where you learn about mistakes.

And then the third is determination. Because if you are going for your goals and learning from mistakes and you are learning and doing that is determination, you get better all the time. You can't help but get better and if you do that for a long enough amount of time, you are going to far exceed your dreams.

September 26, 2017

VIdeo: Anthony Robbins Interviews Ray Dalio

Video: Anthony Robbins interviews Ray Dalio (September, 2017)

"I don't want people to follow my principles I want people to know whatever their principles are come up with theirs so I'm just trying to pass them along."

September 22, 2017

Radical Transparency and Algorithmic Decision-Making

Ray Dalio gave a presentation at the TED Talks in April 2017. Here is a small excerpt of that talk on radical transparency and algorithmic decision-making:

I've been doing this for a long time and I have found it to be wonderful. My objective has been to have meaningful work and meaningful relationships with the people I work with, and I've learned that I couldn't have that unless I had that radical transparency and that algorithmic decision-making. I want to show you why that is, I want to show you how it works. And I warn you that some of the things that I'm going to show you probably are a little bit shocking. - in TED Talks

Principles: Opening Lines

Principles: Life and Work Hardcover – September 19, 2017 
Hardcover: 592 pages

“Significant...The book is both instructive and surprisingly moving.” —The New York Times

 “I found it to be truly extraordinary. Every page is full of so many principles of distinction and insights—and I love how Ray incorporates his history and his life in such an elegant way.” —Tony Robbins

Psychology Is A Big Deal In The Markets

"Psychology is a big deal in the markets." - Ray Dalio in the Tim Ferriss Show

Trades Will Always Go Against You

"Trades will always go against you. It's not like you buy some thing and from that point forward it goes up." - in a recent podcast interview

September 21, 2017

How to build a company where the best ideas win | Ray Dalio

What if you knew what your coworkers really thought about you and what they were really like? Ray Dalio makes the business case for using radical transparency and algorithmic decision-making to create an idea meritocracy where people can speak up and say what they really think -- even calling out the boss is fair game. Learn more about how these strategies helped Dalio create one of the world's most successful hedge funds and how you might harness the power of data-driven group decision-making.
“Pain plus reflection equals progress.” – Ray Dalio
"Ask yourself whether you have earned the right to have an opinion." - Ray Dalio