Investment manager Ray Dalio on keys to success

Ray Dalio is the founder of the world’s largest and most successful hedge fund, Bridgewater. He created it in 1975 in his two-bedroom apartment. Today Bridgewater has about 1,500 employees and manages $162 billion. Now he’s out with a new book “Principles: Life and Work” (published by Simon & Schuster, a division of CBS). It describes more than 200 rules he credits for Bridgewater’s success. The book is an expanded version of his original “Principles,” released online in 2011.

One of the points made in his book is that truth and transparency are essential to a good work environment – even if people’s feelings might be hurt.

Ray Dalio, founder of the world’s largest and most successful hedge fund, Bridgewater.

CBS News

“We can’t handle the truth,” he said (quoting the film “A Few Good Men”).  “We have to start with what reality is, right? We have to start with what truth is.”

Dalio said there are three key factors to success: “Those three things are, that you have to lay your honest thoughts on the table. Can you do that, lay your honest thoughts on the table? Second, you have to have thoughtful disagreement between people who disagree; They have to know how to work those things through so that they all learn. And then third, to be able to go beyond those disagreements in a democratic way.

“It’s all about making better decisions,” he said.

But there are two barriers to making good decisions: ego and close-mindedness.  Being “radically open-minded,” he says, has been key to his success.

“Because nobody themselves actually sees the picture the same way. There are big-picture thinkers, there are detailed thinkers. We need them all. They all see things very differently. And when you can bring that into focus so you can see it in three dimensions or multi-dimensions, and then know how to take advantage of all that and go beyond it, it’s very powerful.”

Simon & Schuster

When asked about the economy and the Trump administration’s handling of it, Dalio said that, on average, the economy is in the middle of a business cycle, “which means that it’s not too hot and it’s not too cold, and the Fed shouldn’t tighten monetary policies.  On the other hand it has a lot of debt and obligations — pension obligations, health care obligations. When demographics play a role, that’s going…

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