Book: Principles

Author

Ray Dalio

Summary

The life and work principles of Ray Dalio, founder of investment firm Bridgewater Associates.

Takeaways

An idea meritocracy is the best way to make decisions in a company. An idea meritocracy requires a commitment to truth and transparency. It can be achieved if people are open minded and ideas are evaluated based on the track record of the people who contribute them. The process can be supported by writing down and refining principles that support decision making and reflect learnings from the past.

Quotes

“In 1966, asset prices reflected investors' optimism about the future. But between 1967 and 1979, bad economic surprises led to big and unexpected price declines. Not just the economy and the markets but social sentiment deteriorated as well. Living through that taught me that whilst almost everyone expects the future to be a slightly modified version of the present, it is usually very different."

“People still make the most important decisions better than computers do. To see this, you need look no further than at the kinds of people who are uniquely successful. Software developers, mathematicians, and game-theory modelers aren’t running away with all the rewards; it is the people who have the most common sense, imagination, and determination."

“Be especially wary of those who comment from the stands without having played on the field themselves and who don’t have good logic, as they are dangerous to themselves and others."

“Good metrics come about by first thinking of what information you need to answer your pressing questions and then figuring out how to get it. They do not come about by gathering information and putting it together to see what it tells you."