Weekend Reading

I was recently snooping around Bridgewater’s website (so I could write this post on Texas Teachers), and I came across Ray Dalio’s paper on culture, investing, and life entitled “Principles”. No doubt many (if not most) of the people who read this blog have already come across Dalio’s manifesto, but have you actually read it? I hadn’t...until yesterday. And I was really glad I did.

It seems to me that Dalio’s “Principles” is an impassioned argument in favor of good governance. He identifies the principles of success (e.g., setting clear objectives; identifying problems; not tolerating problems; making plans to overcome problems) and then talks about how to build a “machine” (through organizational design and talent) that can mobilize these principles through implementation of plans. When I talk about setting up a ‘good governance’ structure, that’s really what I’m talking about. In Dalio’s case, the “machine” is Bridgewater. But that machine could easily be a pension or sovereign fund. 

What I found particularly interesting was Dalio’s focus on ‘Truth’: how to find it, vet it, and use it. The good investors (and I think we can agree that Dalio is a good investor) often face up to the harsh realities in life (i.e., identify and not-tolerate problems, even if they are very personal). They seek to get out of their comfort zone so they can strip out all their potential biases, while supplementing skills and knowledge where weaknesses exist. Weakness no longer becomes a negative; it almost becomes a positive, because knowing a weakness means you can work around it. (Knowing is half the battle, right?)

Anyway, if you’re looking for something to read this weekend, I think you’ll find it quite interesting. I did.