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Ray Dalio TED Talk


EricSchleien
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Ray is a decision maker who focuses on macro issues unlike so many economists who focus on macro but bear no accountability for being wrong. That's what makes Ray's opinions and insights matter -- he's actually in the arena.

 

A recent example of Ray shining amongst his lesser economist peers is the full Davos discussion on macro issues earlier this year:

 

 

Summers, as usual, projects arrogance without humility. He's a prime example of someone whose career/reputation has largely been immune to his many bad ideas and projections in the past (many would say the largest being the run up in financial deregulation prior to the Great Recession). I guess one way that Summers has been held accountable is the rejection of his candidacy for Chairman of the Federal Reserve...well deserved in my opinion.

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I am not sure anyone would be interested in Bridgewater's management system.

If you go to glassdoor.com and read the employee reviews, you will wonder if this is one of the most-hated-by-employees companies. IMO, I think its bad culture can only be matched by that of Goldman Sachs.

 

To give you an example, people at Bridgewater attend small-team classes daily/weekly to study Ray's book "The Principle". Employees need to study it like religions, and there are homework assignments and frequent tests. It's like a brain wash. In the meetings, employees need to criticize each other. It's a must. Your bonus depend on it. You get points when you "dot" someone. "Dot" means write bad reviews in their internal "facebook", and give 1-2 stars... Even if you are a senior manager, for example, and your computer is broken and you ask IT to come to fix it, the IT could "dot" you, on reasons such as "no advance notice so they had to work under a tight timeline".  Of course, you could dot back. But you can't dot back to revenge. You have to find something else.

 

Having said that, I think Ray is a great person and very talented and hardworking. I am just not sure about his management culture and the "Principles"

(p.s. I am not an ex-employee. I heard these from others)

 

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I am not sure anyone would be interested in Bridgewater's management system.

If you go to glassdoor.com and read the employee reviews, you will wonder if this is one of the most-hated-by-employees companies. IMO, I think its bad culture can only be matched by that of Goldman Sachs.

 

To give you an example, people at Bridgewater attend small-team classes daily/weekly to study Ray's book "The Principle". Employees need to study it like religions, and there are homework assignments and frequent tests. It's like a brain wash. In the meetings, employees need to criticize each other. It's a must. Your bonus depend on it. You get points when you "dot" someone. "Dot" means write bad reviews in their internal "facebook", and give 1-2 stars... Even if you are a senior manager, for example, and your computer is broken and you ask IT to come to fix it, the IT could "dot" you, on reasons such as "no advance notice so they had to work under a tight timeline".  Of course, you could dot back. But you can't dot back to revenge. You have to find something else.

 

Having said that, I think Ray is a great person and very talented and hardworking. I am just not sure about his management culture and the "Principles"

(p.s. I am not an ex-employee. I heard these from others)

 

sounds like junior high school on steroids

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I am not sure anyone would be interested in Bridgewater's management system.

If you go to glassdoor.com and read the employee reviews, you will wonder if this is one of the most-hated-by-employees companies. IMO, I think its bad culture can only be matched by that of Goldman Sachs.

 

To give you an example, people at Bridgewater attend small-team classes daily/weekly to study Ray's book "The Principle". Employees need to study it like religions, and there are homework assignments and frequent tests. It's like a brain wash. In the meetings, employees need to criticize each other. It's a must. Your bonus depend on it. You get points when you "dot" someone. "Dot" means write bad reviews in their internal "facebook", and give 1-2 stars... Even if you are a senior manager, for example, and your computer is broken and you ask IT to come to fix it, the IT could "dot" you, on reasons such as "no advance notice so they had to work under a tight timeline".  Of course, you could dot back. But you can't dot back to revenge. You have to find something else.

 

Having said that, I think Ray is a great person and very talented and hardworking. I am just not sure about his management culture and the "Principles"

(p.s. I am not an ex-employee. I heard these from others)

 

sounds like junior high school on steroids

 

I had a good friend work there 15 years ago (god I am old) around 98-2002 IIRC.  Much smaller firm back then and relatively unknown but it already had a rep for secrecy.  Employees were supposed to be adversiarial but not assholes.  Its a hard line to walk and the expectation was that every day was new and old fights were forgotten.  It was described to me that if you were austitic and everything was black/white then you would love the place as success was measured on results.

 

I wouldn't describe it like Middle school and cliques because if you did that you would get killed when your "friend" would stab you in the back.  It was like 1 vs 100 at all times.  Ideas and facts and the ability to explain them won.  My friend quit after 4 years and went into Academia as he physically could not handle the stress.  Went bald, uclers, etc.  But it wasn't stress from getting fucked by others it was the stress that you couldn't expect and didn't know where it would come from.

 

He made (and saved) a few million dollars to not have fuck you money but enough to walk and follow his passions.  He keeps in contact with 1 guy from there and it has probably been that way since 6 months after he left.

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  • 3 weeks later...

Ray Dalio says that he likes Netflix and Twitter as companies. He also said that his "Principles"/system are being tested in large Silly Valley company(ies?). At Netflix or Twitter then? Any other guesses what company(ies?) could be testing his system? Any info from companies that may be testing it?

 

Would you be more likely to invest into a company that tried his system? More likely to short it? Indifferent?

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Ray Dalio says that he likes Netflix and Twitter as companies. He also said that his "Principles"/system are being tested in large Silly Valley company(ies?). At Netflix or Twitter then? Any other guesses what company(ies?) could be testing his system? Any info from companies that may be testing it?

 

Would you be more likely to invest into a company that tried his system? More likely to short it? Indifferent?

 

FaceBook is trying it, i'm indifferent because someone who went through Bridgewater training said they showed a video of Dalio and another senior executive yelling at a lady and made her cry. Considering that these are public companies that have to deal with PR and to my knowledge can't have everyone sign NDA's (maybe idk) if radical truth involves this I could see a nightmare for some company with the anti trust pressure as well as the Russia stuff with tech companies imagine a video of Zuckerberg or Page coming out of them yelling at an employee in the name of radical transparency. I also read another article where the writer was let into one of Bridgewater's meetings. The topic was about China's slowing growth and everyone gave their opinion when it came some guy's turn Dalio didn't like his answer because he thought he didn't think about it enough and scolded him and the guy went off and did some calculations.

 

While I like the system because it removes the BS between people I don't see how programmers would deal with these two situations above.

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This model works only in certain industries like investment banking or hedge funds, where the pay scale is very high. Think about it - why would a software engineer deal with that level of stress and crappy work environment while getting paid maybe 150k/ year? You probably have to double and triple the pay to get people to work there. For 10-20% more, not many would do it and turnover would be sky high.

Is it worth to pay eomployees double the salary so you can put them under that level of stress and portably still have huge turnover? I don’t think so for most tech companies.

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Spek, I mostly agree with you, although I look at this from another point of view.

 

Radical transparency (and idea meritocracy) does not have to equal stress. It works well, but... only within groups that really trust each other and where everyone has internal buyin for it. It can work within a couple - in family or work duo/partnership. It may work within a tightly knit group of maybe up to 5 people. Once you go above that it's tough to have the internal buyin and trust. It becomes a management tool (weapon) that people wield but not necessarily like or support from inside. And then I agree it's a recipe for stress and people either ignoring the tool/method, pretending to adhere/use it or exploiting it for politics/infighting/etc.

 

In other words, in ideal world this could be a great tool/method. With imperfect humans its applicability seems to be limited.

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Am I the only one who read Ray Dalio's book and thought it was a joke? 95% of the book consists of Dalio name dropping or talking about how great he is.

 

I haven't read the book yet. I've listened to a bunch of Dalio's talks and discussed the principles he mentioned with some people. I have some previous experience with radical transparency from another context. 

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Jim Grant Is ‘Bearish’ on Bridgewater, Saying Dalio Isn’t Focused on Investing

https://www.bloomberg.com/news/articles/2017-10-05/jim-grant-is-bearish-on-bridgewater-as-dalio-grabs-spotlight

 

Performance hasn't been good, mostly referencing performance since incentive.  Maybe Ray Dalio is cashing out at the top???

Since the start of 2012, Bridgewater’s Pure Alpha II Fund has posted an annualized return of 2.5 percent, compared with its historic average of 12 percent. It’s down 2.8 percent this year through July.

 

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Am I the only one who read Ray Dalio's book and thought it was a joke? 95% of the book consists of Dalio name dropping or talking about how great he is.

 

I haven't read the book yet. I've listened to a bunch of Dalio's talks and discussed the principles he mentioned with some people. I have some previous experience with radical transparency from another context.

As a management handbook, maybe it has some sort of value, but I really don't have any opinion on that.

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Spek, I mostly agree with you, although I look at this from another point of view.

 

Radical transparency (and idea meritocracy) does not have to equal stress. It works well, but... only within groups that really trust each other and where everyone has internal buyin for it. It can work within a couple - in family or work duo/partnership. It may work within a tightly knit group of maybe up to 5 people. Once you go above that it's tough to have the internal buyin and trust. It becomes a management tool (weapon) that people wield but not necessarily like or support from inside. And then I agree it's a recipe for stress and people either ignoring the tool/method, pretending to adhere/use it or exploiting it for politics/infighting/etc.

 

In other words, in ideal world this could be a great tool/method. With imperfect humans its applicability seems to be limited.

 

Radical transparency has nothing to do with stress.  We share many of the same principles in the company that I work for and we also study Ray's Principles. 

 

There is so much misconception in the comments above it's hard to even start to unwind it.  I would suggest that most people live in an "ideal" world within their head.  Everyone's precious ego gets offended if people question what they believe.  To really understand the topic it requires a deeper understanding of psychology and philosophy.  People of high self esteem, who want to learn, thrive in such an environment, while those who are externally validated (98% of population) can't handle it. 

 

Dalio is a realist, along the lines of Aristotle.  He understands that our brain (amygdala) have different reactions to sensory input causing a flight or flight reaction that isn't necessary rational (cortex).  When you feel a threat it can flood the brain with chemicals that renders the cortex useless.  In the past this helped with physical threats, but today most threats are psychological.  This explains why facebook is so popular.  The users are addicted to the dopamine hit it gives them daily.  Dalio doesn't give them the fake like button, but the opposite.  So if your self worth is determined by others, which is 98% of the population, you will not enjoy radical transparency. 

 

And what is stress anyway?  Stress is a disconnect between our thinking and reality.  Your brain thinks the world "should be" this way but in reality it isn't.  When you lock your keys in your car it causes you to stress out because what we want in our head doesn't match the physical world.  Most people are "stressed" out by other people, as crazy as that seems to some (as if you can control them).  All you can control is yourself and your reaction to any circumstance life throws at you.  If you disagree, read "man's search for meaning" by victor frankl.  A psychologist who self admitted himself into a Nazi concentration camp to test the hypothesis.  Quote, "Everything can be taken from a man but one thing; the last of the human freedoms — to choose one's attitude in any given set of circumstances, to choose one's own way."  Personal responsibility is the path least chosen. 

 

So, radical transparency is either a dream or a dread depending on your viewpoint and your level of psychological dependence.  For those who want to know the truth and learn about the world and themselves, they will enjoy it.  If you prefer to live in a delusional state where people say things just to make you feel good, you obviously won't enjoy it. 

 

Cheers. 

 

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Spek, I mostly agree with you, although I look at this from another point of view.

 

Radical transparency (and idea meritocracy) does not have to equal stress. It works well, but... only within groups that really trust each other and where everyone has internal buyin for it. It can work within a couple - in family or work duo/partnership. It may work within a tightly knit group of maybe up to 5 people. Once you go above that it's tough to have the internal buyin and trust. It becomes a management tool (weapon) that people wield but not necessarily like or support from inside. And then I agree it's a recipe for stress and people either ignoring the tool/method, pretending to adhere/use it or exploiting it for politics/infighting/etc.

 

In other words, in ideal world this could be a great tool/method. With imperfect humans its applicability seems to be limited.

 

Radical transparency has nothing to do with stress.  We share many of the same principles in the company that I work for and we also study Ray's Principles. 

 

There is so much misconception in the comments above it's hard to even start to unwind it.  I would suggest that most people live in an "ideal" world within their head.  Everyone's precious ego gets offended if people question what they believe.  To really understand the topic it requires a deeper understanding of psychology and philosophy.  People of high self esteem, who want to learn, thrive in such an environment, while those who are externally validated (98% of population) can't handle it. 

 

Dalio is a realist, along the lines of Aristotle.  He understands that our brain (amygdala) have different reactions to sensory input causing a flight or flight reaction that isn't necessary rational (cortex).  When you feel a threat it can flood the brain with chemicals that renders the cortex useless.  In the past this helped with physical threats, but today most threats are psychological.  This explains why facebook is so popular.  The users are addicted to the dopamine hit it gives them daily.  Dalio doesn't give them the fake like button, but the opposite.  So if your self worth is determined by others, which is 98% of the population, you will not enjoy radical transparency. 

 

And what is stress anyway?  Stress is a disconnect between our thinking and reality.  Your brain thinks the world "should be" this way but in reality it isn't.  When you lock your keys in your car it causes you to stress out because what we want in our head doesn't match the physical world.  Most people are "stressed" out by other people, as crazy as that seems to some (as if you can control them).  All you can control is yourself and your reaction to any circumstance life throws at you.  If you disagree, read "man's search for meaning" by victor frankl.  A psychologist who self admitted himself into a Nazi concentration camp to test the hypothesis.  Quote, "Everything can be taken from a man but one thing; the last of the human freedoms — to choose one's attitude in any given set of circumstances, to choose one's own way."  Personal responsibility is the path least chosen. 

 

So, radical transparency is either a dream or a dread depending on your viewpoint and your level of psychological dependence.  For those who want to know the truth and learn about the world and themselves, they will enjoy it.  If you prefer to live in a delusional state where people say things just to make you feel good, you obviously won't enjoy it. 

 

Cheers.

 

Can I ask what industry you work? The idea to me boils down to getting to truth, in finance many choices are binary either a country is going to default or won't be able to sell enough bonds to make a deficit or some amount of household debt or corporate debt is coming due and either service payments are to high and won't be paid or they will.

 

When talking about industries like tech and programming is involved where how I write my program and in which program language I write it in can differ from how you write and your preferred language. It just seems like it would turn into a real life stackoverflow thread where everyone argues on whether python is better than C++ to add some feature to their product.

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