Masters in Business: Ray Dalio

Money, Investing, Hedge Funds

I was listening to this on a trip to the airport and found it to be one of the best interviews I’ve heard on Masters in Business. I went back to rewatch this and write down my notes.

  • Formed Bridgewater in 1975
  • Big US loans to Latin America, thought there would be a debt crisis
  • Mexican default, thought it was the beginning of the end but he was wrong
  • Fund crashed and burned
  • Let go all 8 people, had to borrow $4000 from father
  • Rebooted Bridgewater in 1982 after he messed up and lost a lot of money for investors
  • Started thinking about “how do I know I’m right?”
  • Rebuilt with an idea meritocracy
  • Deal with risk and challenge all ideas and assumptions
  • Write it down
  • Write it down when you’re right and wrong, do it clearly
  • Once you write it down, you can codify it.
  • Ray calls them recipes
  • Helped engineer Chicken McNuggets, the hedging for feed prices and chicken prices
  • Everything is a cause and effect in the markets and live
  • Whenever he got surprised it was because it didn’t happen in his lifetime but it happened before.
  • Once you understand this, you can write your rules for dealing with reality
  • If we don’t spend time on the cause and effect, we just argue until we’re blue in the face
  • With technology, you can apply these rules all over the world
  • Was surprised (didn’t know) that when USA abandoned USD to Gold peg, thought the market would go lower. It went higher
  • Then learned about money breakdowns and realized that markets go higher
  • Must become a student of history, studies everything that happened in the last 500 years
  • Always write things down, do this diligently. It will help you codify your principals
  • Idea meritocracy = meaningful work/goals + meaningful relationships + radical truthfulness + radical transparency
  • Think differently than the consensus and be right

The biggest takeaway for me is that writing it down is KEY!  Ray writes everything down, the good the bad and then reflects on it.  Writing it down is one thing, learning from it is completely another thing. That’s the key!

I keep a work journal (Medium toll gate) and been doing it for years, but I’ve never thought about writing down my mistakes and successes and then reflecting on it.  I should apply that to all my aspects of personal and work life. Wow, mind expanded. Thanks Ray!


Also published on Medium.