Smash Notes
Ray Dalio, Principles, the Evolution of Bridgewater Associates & Meditation
LOVED having my man, and renowned investor Ray Dalio on #AskGaryVee this week. I discuss the formula for success with billionaire investor Ray Dalio regarding the principles and ideas which define our work and life. We dissect the core concepts Ray used to build the world's most successful hedge fund along with my principles for building VaynerMedia and my…
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Notes
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Ray Dalio told Gary Vaynerchuk that he wrote down the criteria for every decision, and those notes became his principles. Saying them let him use the same rules with a partner, with family, and at Bridgewater Associates, where the best idea is supposed to win. They later turned the rules into algorithms. A principle, he said, is how you handle something that happens again and again: skiing, raising children, or investing. You recognize the pattern and you already know the move. He had worried that readers of his book Principles would find this too abstract. He was surprised they could connect a repeated event to a written rule.
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Ray Dalio told Gary Vaynerchuk that the Ten Commandments and the Bill of Rights are principles, but people are not walking around checking the list. Religion used to hand the list over. His claim is that each person now has to write their own. He wanted Vaynerchuk to record the decision he actually makes when a situation repeats, until those notes become Gary's formula. Dalio said he started with nothing, stumbled forward, and reached a stage where passing on his own recipes mattered, as long as other people would examine theirs. Self-awareness is the tool that separates a real principle from a habit you never noticed.
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Ray Dalio told Gary Vaynerchuk that needing noise is evidence you do not control your mind. Vaynerchuk said he wants music on and feels worse in silence than in chaos. Dalio called that the tell. Restlessness in quiet means you never leave the busy layer of the mind. If you cannot sit in that quiet without getting antsy, you are not in control, because control is being able to. Dalio was speaking as the founder of Bridgewater Associates, which he started in 1975 after he began trading at 12, while caddying. The meditation point did not depend on the fund. Stimulation is easy to love. The quiet is the test.
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You have to bet against the consensus and to be right.
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After a near catastrophic public failure early in his career, Ray Dalio realized he had to learn from his failures in order to avoid them in the future.
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On AskGaryVee, Ray Dalio says an idea meritocracy has three steps. First, put your honest thoughts on the table for everyone to see. He says most people skip that, and that bad things happen when they stay in the dark. Second, practice thoughtful disagreement: meet a clash with curiosity and the chance that you are wrong, not as a fight, so a group can decide better than one person. Third, agree on a protocol for when you still disagree. At Bridgewater he uses what he calls believability-weighted decision making. He also describes picking someone you both trust and asking that person to help you through the disagreement.
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