Book Review: Principles by Ray Dalio

Ray Dalio @RayDalio is one of the world's most successful investors and entrepreneurs. Bridgewater Associates is the world’s largest hedge fund. They manage over $150 billion. He is among the 100 richest people in the world, according to Bloomberg. He almost went bankrupt and then came back with a bang. That is what makes his story interesting.The book talks about his Principles. The principles that gleaned from his failures. He says in a TED talk that after his bankruptcy, he started viewing his mistakes as puzzles that needed solving. When he solved the puzzles, he distilled the principle that could turn a failure into success. He then took the principles and built it into an algorithm. When he takes a decision, the computer takes a decision on the same issue. Ray says that on most occasions, the computer takes a better decision.The book captures the principles that Ray applies in his life. And how he applies the principles at work. The two big ideas that I came away with:

1. Radical Transparency: Make everyone have equal access to information
2. Radical Truthfulness: Give people a chance to speak their mind.

https://youtu.be/m5eMaJUeT4MBridgewater has often been criticised for being “cult-like”. Anyone can criticise an idea even if it comes from the CEO. While a lot of leaders may speak about being open, very few can practise it. That seems to be a guiding principle at Bridgewater. Everyone gives everyone feedback and every meeting gets recorded (and analysed). If you do not like that kind of truthfulness, Bridgewater is not the place for you. But there is something to be said for Ray’s comfort in self disclosure.

Two minute rule

Dalio speaks about his hunger for feedback as a way of improving himself and refining his ideas. He suggests giving everyone a 2 minute window to share their idea and rationale. Then and only then do you respond. Deep listening is a way to understand why an opposing idea may have insights for you to apply.Asking someone who is good at it is a great way to get better. Jeff Bezos has written in his 2018 letter to shareholders that high standards are teachable and that they are "contagious" within an organization. But they have to be "domain specific" because they don't automatically spread from one area to another. In order to achieve high standards, Bezos says you need to "recognize" its exact meaning in a particular area, and then set the "scope" for realistic expectations to reach those goals.

"Never rule out a goal because it is unattainable" - Ray Dalio

Who is a hero?

Dalio speaks about the books that have impacted his thinking. When Ray Dalio speaks of Joseph Campbell’s book "The Hero with a Thousand Faces" you know it is a book that has impacted Dalio's view of heroism. He talks of Campbell’s view of a hero.

Heroes do not start off as heroes. They get a “call to adventure” and then that road leads to a road of trials. They (heroes) are helped along the way by mentors. “They overcome their fear of fighting because of their great determination to achieve what they want. And they gain their “special powers” (ie skill) from two sources:

1. The battles that test and teach them

2. The gift (eg advice) that they receive from others.

Over time they succeed and fail. But they increasingly succeed more than fail as they grow stronger. And keep striving for more which in turn leads to ever-bigger and more challenging battles.

I did not start off by wanting to read the book. The 550 pages are scary. But then I am glad I did. Dalio does not make statements to impress. But somehow the ruthless rigor that he can subject himself to can be very powerful and inspiring.If you wanted to understand how Ray Dalio got this rich, then this is the book to read. Better still, if you want to challenge your own world view, this book is a great one to get started. Totally recommend that you read it.=====Join more than 650,000 readers who follow me on LinkedInTweet your views @AbhijitBhaduri