Principles Life and Work PDF/EPUB Ò Principles Life

Principles Life and Work Ray Dalio showed us that in order to build a successful hedge fund it’s not enough to follow your intuition It’s much wiser to follow a set of principles that will guide you and protect you from bad decisions He divided those principles into life principles and work principlesThe top 3 principles I applied to my life are Think of yourself how to achieve what you want by analyzing what’s true Be radically open minded Look at the machine you and your life from the higher levelI wrote a short summary and list of all the principles with enough details to understand the benefits of them here Nel 1975 Ray Dalio ha fondato Bridgewater Associates dal suo trilocale di New York Oggi uarant’anni dopo Bridgewater è la uinta private company più importante degli Stati Uniti Fortune e ha fatto guadagnare più soldi agli investitori di ogni altro hedge fund nella storia Bloomberg Lungo la strada Dalio ha scoperto una serie di principi innovativi in cui individua le ragioni del suo successo e che ora condivide in uesto libro I principi del successo è ricco di idee rivoluzionarie con al centro un approccio chiaro e diretto ai processi decisionali tra cui l’innovativo metodo della ‘validità di opinione’ ideato da Dalio che chiunue può applicare per raggiungere ualsiasi obiettivo Il libro presenta anche un modello per la creazione di ‘una meritocrazia delle idee’ che miri a conferire significato al lavoro e alle relazioni attraverso la sincerità e la trasparenza è uesto il segreto dei risultati straordinari di Bridgewater Dall’uomo che la rivista CIO ha definito ‘lo Steve Jobs degli investimenti’ ecco una serie di consigli di comprovata efficacia introvabili nell’editoria di business convenzionale The funniest part was when he talked about his favorite book Joseph Campbell's man of a thousand faces I read that book as an interesting work of comparative myths across cultures revealing common themes in humanity and the struggle of life Dalio read it as a life map and self help book Like he read about the hero's journey and thought it was about him Maybe that's only odd to meAnyway the book is interesting I'd skip the first part and go right to the middle and the end where he talks practically about his principles I feel like the principles could have been put on a flash card and didn't need so much repetition be radically transparent humble know yourself strive to understand truth and don't delude yourself and fire people who suck Nothing revolutionary but the principles are wise and useful When I first began reading it I rather liked it I also liked the idea of it a successful man who has attempted to identify the specific habits or behaviors that enabled his success I was especially interested in his comment about having put the principles into a computer so that he could have software make the same decision and then compare the results to what he and his team came up with so that any differences could be resolved and the rule base improved He brings this up early but never goes into any specifics on how the rule base is structured the technology or what the inputs would be to such a generalized decision making systemThe basic idea is I think very sound use evidence to make decisions; if using opinion weight those with a track record heavily; when you fail and you will learn from the mistakes and incorporate the learnings into your principles or rules or however you want to characterize the set of heuristics you use for decision makingBut the further you go the problematic the book becomes For one thing it's overwritten The real meat of this book can be summarized in a Harvard Business Review article but he keeps circling around to the same topics over and over And not to add evidence but just to talk in vague generalities about how important this or that concept isTake for example the concept of radical honesty Bridgewater famously records conversations and meetings so that they can be used for training purposes which is fair enough In one conversation that allegedly was used for training purposes but is no longer shown is Dalio speaking with an underling who eventually breaks down crying I have never seen it but have no reason to doubt its existence Now this book is 500 pages long and I didn't count how many times he spoke of being a straight shooter and believing in tough love and radical honesty but it was a lot What he never did is print a transcript of any one conversation that he felt was a good example of his radical honesty and offer commentary on why he said the way he said it or reflect on whether it could have been phrased better so that the person on the receiving end didn't feel belittled or demeaned as a result of his tough love approachI've been working professionally for nearly 35 years and I can say that I'm trying pretty hard when I write software my primary task but I know I can make mistakes both in execution and on the big picture view I'm generally uite pleased when someone offers true constructive criticism because I want them to be happy with my work I want them to be engaged in what I've done and constructive criticism means that they're trying too and that they want the project to be its best I've never seen anyone cry not once in 35 years as a result of well intentioned constructive criticismI think that if he had printed a transcript it might have shown that any of the work related criticisms could have been delivered in a manner that would have made it clear that everyone involved was only trying to improve the outcome It would have also shown that there were likely attacks on the individual on their intellectual shortcomings or underlying character I could be wrong though maybe the transcript would have supported his view But the point is that the transcript would have been evidence and it would have improved Dalio's believability on one of the main points of his book He didn't offer a single transcript Not a oneThe fact that Dalio harps on radical honesty and tough love and how a lot of people don't fit with their corporate culture leads me to think that maybe he's actually a dick in his interpersonal relationships Maybe he has no interest in changing how he deals with people that is in a bullying belittling and demeaning manner and so he's constructed this rationale in his own mind that he's a straight shooter that it's tough love and all in service of some higher mission and purpose Because he's a billionaire he has further proof that his rationalization is correctI have no problem with radical transparency either The company I work for uses the the maxim don't do anything that you'd be uncomfortable seeing on the front page of your local newspaper and I'm good with that But it takes little searching to find an example of Bridgewater and its supposedly exemplary culture acting exactly like any other company when stressed The link an incident of alleged sexual harassment of an employee Christopher Tarui If this is believed again it could be a total fabrication but there seems little reason for the employee to make this up it shows the company hiring someone the boss who was not at all considerate of others and a reaction by the company aimed at sweeping an incident under the rug and making it go away than one fueled by radical honesty and transparency where an uncomfortable situation was confronted dissected and learned from I'm not saying the company's behavior was bad illegal or unethical it simply acted as any typical company would trying to protect itself My point in bringing it up is that it in my opinion shows Bridgewater of being utterly unlike the company and culture that Dalio spends 500 pages pontificating about Perhaps Dalio's defense would be that this happened after he stepped away from daily management but if so it would also be evidence that the machine he built did not continue to operate in the same way after his departure and that his principles did not outlast his tenure The likely explanation again my opinion is that his principles are actually after the fact rationalizations attempting to explain his success than the underlying driversMost his work principles seem unsurprising or downright trite I think most people know that work goes better if you treat the people you work with in a considerate fair and euitable manner And that you keep an open mind to the idea that you may be wrongUltimately I would echo the Reverend Martin Sherlock in a review he wrote back in 1781 In general throughout the work what is new is not good; and what is good is not new Amazing book must read for anyone who has to make decisions in life that means everyone but I think the impact your decisions have the useful his frameworks are I'm giving it 5 stars for the big ideas and uniueness of them though I will warn you that the book is very long and highly repetitive there is probably a way to read only parts of it and still get all the big ideas Also as I do for most books these days I read it with a combo of Kindle ebook and Audible and Ray reads the first half of the book himself and given that part is backstorybio It's much powerful to hear it in his voiceDalio was successful because he timed it perfectly he was one of the first to apply computers to investing He also along the way invented what we call a hedge fund which is only possible to do well if you highly leverage computers He leveraged computers heavily turning all investment decision making he could into algorithms He found this worked so well that he attempted to turn ALL decision making into algorithms this book goes into personal life and management work algorithms aka principles This is one of the interesting ways Ray approaches life he is trying to turn all his life into algorithmsThe key to doing this well is to 1 Slow down your thinking so you can note the criteria you are using to make your decision 2 Write the criteria down as a principle 3 Think about those criteria when you have an outcome to assess and refine them before the next “one of those” comes alongAndWhenever I make an investment decision I observe myself making it and think about the criteria I used I ask myself how I would handle another one of those situations and write down my principles for doing so Then I turn them into algorithms I am now doing the same for management and I have gotten in the habit of doing it for all my decisionsI found the definition of his inspiration of a hedge fascinating as it applies to life in general too basically make lots of uncorrelated betsThat simple chart struck me with the same force I imagine Einstein must have felt when he discovered Emc2 I saw that with fifteen to twenty good uncorrelated return streams I could dramatically reduce my risks without reducing my expected returns It was so simple but it would be such a breakthrough if the theory worked as well in practice as it did on paper I called it the “Holy Grail of Investing” because it showed the path to making a fortuneOne of the Big Ideas of the book that Ray talks a lot about a lot is the notion of creating an idea meritocracyof all approaches to decision making an idea meritocracy is the best40 It’s almost too obvious to warrant saying but I will anyway Knowing what you can and cannot expect from each person and knowing what to do to make sure the best ideas win out are the best way to make decisions Idea meritocratic decision making is better than traditional autocratic or democratic decision making in almost all casesIn order to do this Ray believes strongly in having radical transparency and being radically open minded I think these sections are worth reading if you don't read the whole book worth re reading too A transparent culture means everything is shared metrics and data how the company or teams are doing what is said in meetings all meetings are recorded at Bridgewater and anyone can access the recordings later strategic issues like if they are considering a merger of one group and even what people are like Bridgewater has opened sourced a big piece of people management what people's strengths and growth areas are They use personality tests as well as input from others in the company to assess this and then put it on baseball cards for each person which anyone in the company can see He describes how useful these tools are when creating a new project team to make sure you have a balance of the right skillsets and types of people on it and how without this many people are just naturally likely to pick people like themselves This way of operating is so interesting and different that many notable phycologists Eg Adam Grant have gone to study the Bridgewater culture In addition to collecting “dots” about people in meetings we collect data on our people in numerous other ways reviews tests the choices people make etc All these dots are analyzed via computerized algorithms based on stress tested logic in order to create pointillist pictures of what people are like That logic is typically shared with and vetted by the people in the company to help its objectivity and believability We then capture these pictures in Baseball Cards which are a simple way of presenting a person’s strengths and weaknesses and the evidence behind them in much the same way as a baseball card does for a professional baseball playerOnce you know who is good at what it becomes a way to de risk decision making in a meritocratic way People who score high at things aka are believable get weight in their opinions on things in that area Most of us do this intuitively ask and listen to those who know about something but having a system to enforce that will catch a lot of cases where it isn't happening Thinking about where this might go if expanded broadly is a bit interesting feels like it could really turn into gamified decision makingAs Bridgewater’s system currently exists everyone is allowed to give input but their believability is weighted based on the evidence their track records test results and other data Responsible Parties can overrule believability weighted voting but only at their peril TLDR You can just watch my summary here Ray Dalio has an amazing story and this book explains many principles that he uses every day This book contains his biography and his hedge fund cornerstone rules you have to read it I love how Ray Dalio gamifies his life He treats his failures as puzzles or missions where his goal is to reflect on the pain and get to the root of the problem If he succeeds he'd gain a gem in the form of a principle There have been many gems throughout his life and he compiled and shared them in this book The utility of the content in the book is worth 5 stars but I'm docking a star for the smarmy tone within the historical section about early Bridgewater and early career Dalio I'm certain I will return to the material and continue to dig out sometimes radical approaches to my life and work but I'm also pretty sure I'll never go cover to cover again • IMPORTANCE OF PRINCIPLES • The most important thing i learned is an approach to life based on principles that helps me find out whats true and what to do about it • Principles are fundamental truths that serve as the foundations for behaviour that gets you what you want out of life They can be applied again and again in similar situations to help you achieve your goals 1 What do you want 2 What is true 3 What should you do to achieve what you want in light of what is true • Having a good set of principles is like having a good collection of recipes for success • The lesson When everybody thinks the same thing such as what a sure bet the Nifty 50 is it almost certainly reflected in the price and betting on it is probably going to be a mistake • The most painful lesson that was repeatedly hammered home is that you can never be sure of anything There are always risks out there that can hurt you badly even in the seemingly safest bets so its always best to assume you're missing something This lesson changed my approach to decision making in ways that will reverberate throughout this book and to which I attribute much of my success • There is almost always a good path that you just haven't figured out yet so look for it until you find it rather than settle for the choice that is then apparent to you • I believed strongly that we should bring problems and disagreements to the surface to learn what should be done to make things better So Ross and i worked to build out an error log in the trading department • I saw that to do exceptionally well you have to push your limits and that if you push your limits you will crash and it will hurt a lot You will think you have failed but that won't be true unless you give up Believe it or not your pain will fade and you will have many other opportunities ahead of you though you might not see them at the time The most important thing you can do is to gather the lessons these failures provide and gain humility and radical open mindedness in order to increase your chances of success Then you press on • I learned a great fear of being wrong that shifted my mind set from thinking Im right to asking myself how do i know I'm right And I saw clearly that the best way to answer this uestion is by finding other independent thinkers who are on the same mission as me and who see things differently from me By engaging them in thoughtful disagreement id be able to understand their reasoning and have them stress test mine That way we can all raise our probability of being right • What happens after we crash is most important Successful people change in ways that allow them to continue to take advantage of their strengths while compensating for their weaknesses and unsuccesful people don't • making money in the markets is tough • Learning from history What had happened after all was another one of those • Meditation has benefited me hugely throughout my life because it produces a calm open mindedness that allows me to think clearly and creativelyI gradually learned that prices reflect peoples expectations so they go up when actual results are better than expected and they go down when actual results are worse than expected And most people tend to be biased by their recent experiences p 11 Only 2 reasons to read this book1 You work at Bridgewater2 You haven’t read any recent businessself help booksThe information is pretty standard The beginning is a memoir which was kind of interesting The principles themselves are trite Would not recommend this book


About the Author: Ray Dalio

Raymond Dalio born August 8 1949 is an American investor hedge fund manager and philanthropist Dalio is the founder of investment firm Bridgewater Associates one of the world's largest hedge funds


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