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Principles
Ray Dalio
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What is Principles about?
The operating manual of one of the most successful hedge funds in history. Ray Dalio shares the radical-transparency, idea-meritocracy principles that built Bridgewater. Long, demanding, and one of the most genuinely useful books ever written by a billionaire. The book to study, not just read.
Key ideas of Principles
Radical Truth and Transparency
Dalio argues that organizations make far better decisions when honest feedback flows freely and the reasoning behind every choice is visible to everyone.
Pain as a Learning System
Every failure contains precise information about where your process broke down, and extracting that information through reflection is what turns setbacks into lasting growth.
Believability-Weighted Decision-Making
Not all opinions deserve equal weight: credibility on a specific question should be earned by track record and clear reasoning, not title or seniority.
Read an excerpt from the summary
Principles
*Ray Dalio*
In the summer of 1982, Ray Dalio sat in a television studio preparing to go live on Wall Street Week, the most-watched financial program in America. He was thirty-two years old, and he was certain. He had studied every debt crisis going back to 1800. He had run the models. He had consulted the history. Mexico had just defaulted. American banks had lent out 250 percent of their capital to shaky borrowers. The dominoes, in his mind, were already tipping. He leaned into the camera and told the country: "There'll be no soft landing. I can say that with absolute certainty, because I know how markets work."
The Federal Reserve responded by flooding the market with liquidity. The stock market jumped by a record amount. What followed was not the depression Dalio had predicted. What followed was the greatest eighteen-year noninflationary growth period in American economic history.
Dalio was catastrophically wrong. Not just wrong in the way that traders are sometimes wrong, the ordinary coin-flip error of a bad bet. Wrong in a way that cost him everything he had spent eight years building. One by one, he had to let his employees go. His closest colleague, Paul Colman, packed up his family and drove back to Oklahoma with tears on both sides. Dalio sold his second car. He borrowed four thousand dollars from his father to cover the family's expenses. He was left alone in what had once been a firm, staring at the question every ambitious person eventually has to face: do you quit and take the safe road, or do you figure out how to do this differently?
He chose differently. And that choice, more than any market call he ever made, is the real subject of this book.
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Continue in the appWho is it for?
- Anyone who wants a rigorous, battle-tested framework for making better decisions in work and life.
- Anyone who leads a team and wants to build a culture where the best ideas win regardless of where they come from.
- Anyone who has experienced a major professional failure and is trying to figure out what to do differently next time.
- Anyone who is curious about how one of the world's most successful investment firms was built from scratch.
About the author: Ray Dalio
Ray Dalio founded Bridgewater Associates in 1975 out of a two-bedroom apartment and built it into one of the largest and most closely studied hedge funds in the world. He is widely regarded as one of the most influential figures in global macro investing.
Dalio has written and spoken extensively on economic cycles, debt crises, and organizational culture. He made his principles document publicly available in 2010, years before this book appeared, and it had been downloaded millions of times by the time Principles was published in 2017.
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