Ray Dalio

Ray Dalio @SXSW: How To Build A Company Where The Best Ideas Win Out

Raymond Dalio, the bestselling author of Principles and one of the most successful investors and entrepreneurs of our time, discusses the unique principles that helped him build his company (Bridgewater Associates) from his two bedroom apartment to the fifth most important private company in the U.S. and made him one of the 100 richest people in the world. Hear him describe “a believability-weighted idea meritocracy” in which people strive for “meaningful work and meaningful relationships through radical truth and radical transparency.” He’ll also explain the innovative technologies his firm uses to make sure that the best ideas win out.

 

Q2 hedge fund letters, conference, scoops etc

Raymond Dalio

Raymond Dalio: How To Build A Company Where The Best Ideas Win Out

Transcript

I want to talk about principles in general before I get into my principles are the things that help me. I had. Sort of accidentally gotten into the habit of writing down my principles and it changed everything. So. Initially when I started to make decisions in the markets. I would write down why did I make that trade. And. Then I began to see that if I knew those criteria I could test take those criteria and test how they would have worked in other timeframes and countries and I got perspective on that and I saw that the same things happened over and over again in different countries and it gave me a great perspective. And then I began to realize that whenever I was making any decision it was a good thing to write down. At that time the reasons I made those decisions and I found that it was invaluable in dealing with all the people that I was dealing with. People in my company and so on because it reflected enhance my reflections on those decisions because I would then be able to create clarity and that perspective then change my view of the world because I began to see that the same things would happen over and over again and I would think OK what type of thing is that and what species of decision making and how do I best make that decision. I would also be very much in contact with my values what were my values that were so important for me to live out in the form of these types of principles.

And then I began to find out that if I was clear enough on those principles I can convert those principles into algorithms that would help me make decisions because basically algorithms are just the same rules just expressed in a different language and by putting that language into a computer and taking in data then in parallel with my own decision making I could have the computer make the decisions using those same criteria. And that was incredibly powerful empowering. And I think the principles are extremely important in terms of relationships between people. And I think we’re losing the focus on principles for various reasons through time. You know there used to be collective principles in many ways maybe because of religion and religion is less the case and even today in our society I don’t think it’s necessarily clear what principles we’re going after as a country or as a people. And so clarity of what are your principles that bind you together or separate you that sort of clarity. And what principles are valuable to you as an individual and how do you live those things out are so invaluable. So the things that I would like to pass along. Most importantly is that you think about your own principles and you be clear. And if you write those principles down in a crystal clear way and communicate them with others that it’s extremely extremely powerful. So I’m going to that’s the most important message I can convey but I’m going to them take you through my evolution and my principles that helped me a lot. So. The way the way I look at the world is we all have our encounters with with everwhere going out after. And so we all learn about how reality works.

You might be an engineer you might be an architect you might be a parent and so on. And in those encounters you learn how reality works and then we gain our principles so I don’t claim to know about a lot of things.

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