Ray Dalio, The Steve Jobs of Investing -

Ray Dalio, The Steve Jobs of Investing

Credit: tim.blog

  • Sep 13 2017 20:56About: 2 months ago
  • 3 views

“Pain plus reflection equals progress.”
– Ray Dalio

Ray Dalio (@raydalio) grew up a middle-class kid from Long Island. He started his investment company Bridgewater Associates out of a two-bedroom apartment at age 26, and it now has roughly $160 billion in assets under management. Over 42 years, he has built Bridgewater into what Fortune considers the fifth most important private company in the U.S.

Along the way, Dalio became one the 100 most influential people in the world (according to Time) and one of the 100 wealthiest people in the world (according to Forbes). Because of his unique investment principles that have changed industries, aiCIO Magazine called him “the Steve Jobs of investing.”

Ray believes his success is the result of principles he’s learned, codified, and applied to his life and business. Those principles are detailed in his new book Principles: Life and Work.

In this interview, we cover a lot, including:

  • How Ray thinks about investment decisions, how he thinks about correlation, etc.
  • The three books he would give to every graduating high school or college senior
  • How he might assess cryptocurrency
  • And much, much more…

Enjoy!

TF-ItunesButtonTF-StitcherButton

Want to hear a podcast featuring another great investor?  — Listen to this conversation with Naval Ravikant. In this episode, we discuss the habits and behaviors of highly successful and happy people (stream below or right-click here to download):


This podcast is brought to you by Four SigmaticI reached out to these Finnish entrepreneurs after a very talented acrobat introduced me to one of their products, which blew my mind (in the best way possible). It is mushroom coffee featuring chaga. It tastes like coffee, but there are only 40 milligrams of caffeine, so it has less than half of what you would find in a regular cup of coffee. I do not get any jitters, acid reflux, or any type of stomach burn. It put me on fire for an entire day, and I only had half of the packet.

People are always asking me what I use for cognitive enhancement right now — this is the answer. You can try it right now by going to foursigmatic.com/tim and using the code Tim to get 20 percent off your first order. If you are in the experimental mindset, I do not think you’ll be disappointed.

This podcast is also brought to you by Athletic GreensI get asked all the time, “If you could only use one supplement, what would it be?” My answer is, inevitably, Athletic GreensIt is my all-in-one nutritional insurance. I recommended it in The 4-Hour Body and did not get paid to do so. As a listener of The Tim Ferriss Show, you’ll get 30 percent off your first order at AthleticGreens.com/Tim.

QUESTION(S) OF THE DAY: What was your favorite quote or lesson from this episode? Please let me know in the comments.

Scroll below for links and show notes…

Selected Links from the Episode

  • Connect with Ray Dalio:

Bridgewater Associates | Principles.com | Twitter | Facebook

Show Notes

  • Ray describes his middle class childhood in Long Island and what got him hooked on investing at the tender age of 12. [06:33]
  • What Ray learned about business as “a professional mistake-maker.” [08:29]
  • “Pain plus reflection equals progress.” [12:01]
  • Many mistakes are avoidable if we remember to look outside of the events of our own lifetimes and experiences. [14:39]
  • What Ray has learned about patterns from examining history — on a grand scale and in everyday life. [16:42]
  • How evidence-based meritocracy works at the radically truthful, radically transparent environment at Bridgewater. [20:07]
  • Ray talks about the function of his company’s “pain button” app. [23:21]
  • On the “invaluable” benefits of Transcendental Meditation (which Ray has been practicing since 1969). [25:59]
  • Ray gives us the specifics behind his daily TM routine (and what he does when he’s not in his usual surroundings). [29:54]
  • Other tools developed at Bridgewater that promote the company’s culture of truth and transparency. [33:29]
  • Ray explains the three things that go into nurturing an “idea meritocracy” in a company culture — and its benefits. [36:33]
  • The “Two-Minute Rule” and other protocols for preventing disagreement from boiling over into emotionally charged fighting. [40:35]
  • Why does Ray remember early failures more vividly than early successes — and what does this tell him about both? [43:14]
  • What helped Bridgewater win out over some of its more established competition? [46:59]
  • The three ingredients of a successful life. [47:12]
  • What makes intelligent people unhappy? [48:22]
  • Our personal experiences with clinical depression. [49:41]
  • Four protocols Ray’s son Paul follows for dealing with bipolar disorder. [53:24]
  • What I’ve recently learned about observing a consistent, earlier bedtime. [56:03]
  • Why it’s important to work toward removing the stigma of mental illness. [56:57]
  • Ray talks about some of his own positive influences and role models growing up. [1:00:24]
  • What is Ray’s reading process? [1:02:18]
  • Books in Ray’s current reading list. [1:04:31]
  • How does Ray choose what to read? [1:08:00]
  • The three books Ray would give to every graduating high school or college senior. [1:09:49]
  • The best investors I’ve met almost all have a fascination with evolution. Why is that? [1:11:50]
  • Good ways to explore or investigate someone else’s reasoning behind their conclusions. [1:14:42]
  • Ray clarifies one of his most misunderstood maxims: “Don’t pick your battles; fight them all.” [1:16:32]
  • What Ray considers the overarching challenge we all face, and how our challenges adapt over time. [1:17:50]
  • How does Ray define and think about risk? [1:22:54]
  • A deep dive into data sets and the layers on uncorrelated bets. [1:29:43]
  • Learning the basics: Ray explains economics as “a pretty simple machine” in his famous 30-minute video. [1:37:40]
  • How would Ray begin to assess if a new investment opportunity — such as cryptocurrency — is worthwhile? [1:38:38]
  • Assessing the motivations of buyers and sellers. [1:42:05]
  • How should the decreasing value of a favored asset class change an investor’s behavior? [1:45:00]
  • How is Ray’s diversification approach unique? [1:48:00]
  • What advice would Ray have for someone who has the majority of their concentrated portfolio in a particular asset? [1:48:47]
  • What would Ray’s self-talk be like if he found himself stuck in a difficult investment position? [1:51:38]
  • Has stress ever caused Ray to liquidate all positions and start over? [1:53:17]
  • Psychology is a big deal in the markets. Here’s how Ray uses technology to remove a lot of his own emotional stress from the equation. [1:54:46]
  • Wrapping up: making transitions and sharing principles. [1:57:40]

People Mentioned



Follow Us on Twitter

Related stories with Ray Dalio, The Steve Jobs of Investing

Dean Unglert Reveals Status of His Relationships with Kristina Schulman & Danielle Lombard -World News
Dean Unglert Reveals Status of His Relationships with Kristina Schulman & Danielle Lombard 2 months ago
On Tuesday, Dean Unglert joined “Extra’s” social media correspondent Hannah Kahn after the season finale of “Bachelor In Paradise.”
Why the Newest iPhone 8, iPhone X Are a Win For Intel and Dish Network -World News
Why the Newest iPhone 8, iPhone X Are a Win For Intel and Dish Network 2 months ago
Technical choices have big consequences.
Trump Administration Bans Federal Agencies From Using Russian-Owned Kaspersky Software -World News
Trump Administration Bans Federal Agencies From Using Russian-Owned Kaspersky Software 2 months ago
Homeland Security is concerned about ties between Kaspersky and Russian intelligence.
The Gender Pay Gap Narrowed in 2016. But Only by 2 Cents. -World News
The Gender Pay Gap Narrowed in 2016. But Only by 2 Cents. 2 months ago
But women still make 81 cents for each $1 a man earns.
Bank of Canada daily avg. for the Cdn dollar: 82.05 cents US, dn 0.19 of a cent -World News
Bank of Canada daily avg. for the Cdn dollar: 82.05 cents US, dn 0.19 of a cent 2 months ago
The average value for the Canadian dollar on Wednesday was 82.05 cents US, down 0.19 of a cent from Tuesday. The U.S. dollar was at C$1.2187, up 0.28 of a cent. Pound sterling was at C$1.6119, down 0.21 of a cent, and US$1.3226, down 0.48 of a cent. The E
Canadian snowbirds will face higher insurance costs even if unscathed by Irma -World News
Canadian snowbirds will face higher insurance costs even if unscathed by Irma 2 months ago
MONTREAL — Canadian snowbirds who were lucky enough to escape property damage from hurricane Irma will still face higher costs as insurance providers jack up premiums and condo associations levy special assessments, say Florida insurance experts. &#
US agencies ordered to stop using Russian company’s software -World News
US agencies ordered to stop using Russian company’s software 2 months ago
WASHINGTON — The U.S. on Wednesday banned federal agencies from using computer software supplied by Kaspersky Lab because of concerns about the company’s ties to the Kremlin and Russian spy operations. The directive issued by acting Homeland S
Vegetable, fruit prices to be on the rise over weak supply, crop damage -World News
Vegetable, fruit prices to be on the rise over weak supply, crop damage 2 months ago
Vegetables and fruit have become costlier in select wholesale and retail markets since August, due to weak supply following incessant rain and worry of crop damage in major producing centres. Data compiled by the government-owned National Horticulture Boa
Coffee exports get 'instant' boost -World News
Coffee exports get 'instant' boost 2 months ago
India is emerging as hub for instant coffee exports and it is pushing coffee exports from the country. Coffee exports between April and August 2017 rose to 1,77,805 tonnes from 1,62,641 tonnes, during the same period a year ago. Speaking to Business Stand
Listen to Gucci Mane & The Weeknd's New Collaborative Single,
Listen to Gucci Mane & The Weeknd's New Collaborative Single, "Curve" 2 months ago
With this wedding day TV special on the way, Gucci Mane has unveiled what could very well be his biggest single of the year. Featuring The Weeknd, the song was produced by NAV and serves as the latest single off of his upcoming album, Mr. Davis. Premiered