I am currently making my way through Ray Dalio’s collection of thoughts and it is proving to be an interesting read. Dalio is an interesting individual with an interesting take on life – this obviously explains in part why his hedge fund Bridgewater has a somewhat interesting reputation for having an unusual corporate culture. What I want to do is to highlight bits of the book that interest me and provoke me to think about the way I do things.
While making money was good, having meaningful work and meaningful relationships was far better. To me, meaningful work is being on a mission I become engrossed in, and meaningful relationships are those I have with people I care deeply about and who care about me.
Ray Dalio – Principles
If I were to select a single theme from the book as being central to its narrative it is this notion of relationship. To Dalio interpersonal relationships are a driving force and this is highlighted repeatedly. To me this is an interesting feature since your archetypal hedge fund manager is generally seen as someone who is bordering on being sociopathic- the notion of relationships is an anathema to them. You can see a glimpse of this sort of expected behaviour in the current Financial Services Royal Commission and it is behaviour I noticed on a daily basis when I was involved in the finance industry. The driving motivation of such people is reward for their own narcissism, irrespective of the cost to others as such Dalio and his need for strong relationships is an interesting counterpoint to this expected norm. In part I wonder how much of this is a function of his formative years occurring during the counter culture years of the 1960’s and this is something he does touch on.
Relationships are also the cornerstone of how he sees the world of trading. His methodology is one of understanding how everything fits together as a model and then executing that model – so you could class him as a broad scale macroeconomic trader. He says the economic world as a big machine that is somewhat Newtonian in outlook. This is interesting because I view the world as slightly more chaotic as such small changes in initial conditions result in large changes in the end result. But Dalio is quick to admit his own faults and failures and the early part of the book spends a lot of time looking particularly as the notion of the arrogance of youth and the cost of this arrogance. This si something we could all spend time reflecting upon….particularly me.