brilliant quotes from hedge-fund legend Ray Dalio
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Here are 95 Brilliant Quotes from Ray Dalio (Author of Principles)

Raymond Dalio (born August 8, 1949) is an American billionaire investor, hedge fund manager, and philanthropist. Dalio is the founder as Co-Chairman and Co-Chief Investment Officer of investment firm Bridgewater Associates, one of the world’s most significant hedge funds. Throughout his career, he has averaged unbelievable returns, more than doubling the S&P 500. Dalio is worth $15.9 billion, according to Forbes, making him the 69th richest person in the world. In 2012, Dalio was featured in the Times 100 list of 100 most influential people in the world. In 2017 he released his own book ‘Principles: Life & Work’ which went on to critical acclaim. The book was a New York Times #1 best-seller and Amazon’s #1 business book of 2017 and listed the 13 Best Business Books of 2017 by CNBC. Dalio discusses his background as a backdrop for his takeaways about life and work. Bloomberg ranked him as the world’s 58th wealthiest person in June 2019.

1

“Pain + Reflection = Progress”

2

“The average man tends to be much more reactive if you look at the purchases and sales that they make. When something goes up, they’re more likely to buy it. They think, ah, that’s a good investment. They don’t know how to measure that in terms of, oh, is that a much more expensive investment that’s more likely to go down?” – Dalio said in an interview with Business Insider CEO Henry Blodget on September 2017

3

“The greatest tragedy of mankind is people who have opinions that are wrong.”

4

“To be successful, you’re betting against the consensus, and you have to be right, the consensus is built into the price. So because the consensus is built into the price, and assets price themselves in a way that they’re all competing, and they’re all of the equal value in a certain sense. There’s risk premium of equities over cash and bonds will have that over whatever, but basically, they’re all priced that way. So like think of it as going to betting on a sports team or in other words, or horse racing.” – Dalio said during the interview with Business Insider CEO Henry Blodget, in September 2017.

5

“You must not let your need to be right more important than your need to find out what’s true.”

6

“If you don’t look on yourself and think, ‘Wow how stupid I was a year ago,’ then you must not have learned much in the last year.”

7

“To make money in the markets, you have to think independently and be humble.”

8

“Know what you don’t know. Be comfortable with understanding your mistakes and weaknesses.”

9

“School typically doesn’t prepare young people for real-life — unless their lives are spent following instructions and pleasing others. In my opinion, that’s why so many students who succeed in school fail in life.”

10

“Idealists who have not well-grounded in reality create problems, not progress.”

11

“The challenges you face will test and strengthen you, If you’re not failing, you’re not pushing your limits, and if you’re not pushing your limits, you’re not maximizing your potential.”

12

“Having the basics, a good bed to sleep in, good relationships, good food – is most important, and those things don’t get much better when you have a lot of money or much worse when you have less. And the people one meets at the top aren’t necessarily more special than that one meets at the bottom or in between.”

13

“The people who work for you should constantly challenge you. Don’t hire people just to fit the first job they will do; hire people you want to share your life with.”

14

“I came to see that people’s greatest weaknesses are the flip sides of their greatest strengths.”

15

“Typically happens when interest rates are close to zero, because you can’t lower interest rates anymore.”

16

“Above all else, I want you to think for yourself, to decide 1) What you want, 2) What is true and 3) What to do about it.”

17

“The most important thing is that you develop your principles and ideally write them down, especially if you are working with others.”

18

“I believe that for the most part, achieving success — whatever that is for you — is mostly a matter of personal choice and that, initially, making the right choices can be difficult.”

19

“The best advice I can give you is to ask yourself what do you want, then ask ‘what is true’ – and then ask yourself ‘what should be done about it.’ I believe that if you do this, you will move much faster towards what you want to get out of life than if you don’t!”

20

“I pay about a third in taxes, I give away about a third, and I follow the law.”

21

“Find out who is responsible for whatever you are seeking to understand and then ask them, Listening to uninformed people is worse than having no answers at all.”

22

“Making a handful of good uncorrelated bets that are balanced and leveraged well is the surest way of having a lot of upside without being exposed to the unacceptable downside.”

23

“Mistakes are the path to progress.”

24

“If you don’t own gold, you know neither history nor economics.”

25

“If your objective is to be as good, as you can be, then you’re going to want criticism.”

26

“The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment.”

27

“Every time you have pain, it’s is an indication that something’s at odds.”

28

“When I’m looking at it I think these things that kind of keep happening over and over again … and then I have this template … and these rules, if this happens then, that’s going to happen because it has all happened before.”

29

“To test if you are worrying too much about looking good, observe how you feel when you find out you’ve made a mistake or don’t know something.”

30

“If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep the money.”

31

“There are two broad approaches to decision making: evidence/logic-based (which comes from the higher-level brain) and subconscious/emotion-based (which comes from the lower-level animal brain).”

32

“Listening to uninformed people is worse than having no answers at all.”

33

“Experience creates internalization. A huge difference exists between memory-based “book” learning and hands-on, internalized learning. A medical student who has “learned” to operate his medical school class has not learned it in the same way as a doctor who has already conducted several operations. In the first case, the learning is stored in the conscious mind, and the medical student draws on his memory bank to remember what he has learned. In the second case, what the doctor has learned through hands-on experience is stored in the subconscious mind and pops up without his consciously recalling it from the memory bank.”

34

“Demand is best measured in terms of spending, You know, I think in traditional economics, it’s a mistake to measure it in terms of the number of goods. – Dalio said in 2012 at the Council on Foreign Relations.”

35

“Every time you confront something painful, you are at a potentially important juncture in your life – you have the opportunity to choose healthy and painful truth or unhealthy but comfortable delusion.”

36

“I believe one of the most valuable things you can do to improve your decision making is to think through your principles for making decisions, write them out in both words and computer algorithms, back-test them if possible, and use them on a real-time basis to run in parallel with your brain’s decision making.”

37

“Don’t be a perfectionist, because perfectionists often spend too much time on little differences at the margins at the expense of other big, important things. Be an effective imperfectionist.”

38

“Almost everything is like a machine, and Nature is a machine. A family is a machine. The life cycle is like a machine.”

39

“People who worry about looking good typically hide what they don’t know and hide their weaknesses, so they never learn how to deal with them properly, and these weaknesses remain impediments in the future.”

40

“Treat your life like a game.”

41

“Remember that weaknesses don’t matter if you find solutions.”

42

“There are two main drivers of asset class returns – inflation and growth. When growth is slower-than-expected, stocks go down. When inflation is higher-than-expected, bonds go down. When inflation is lower-than-expected, bonds go up.”

43

“Great is better than terrible, and terrible is better than mediocre, because terrible at least gives life flavor.”

44

“People with good work habits have to-do lists that are reasonably prioritized, and they make themselves do what needs to be done. By contrast, people with poor work habits almost randomly react to the stuff that comes at them, or they can’t bring themselves to do the things they need to do but don’t like to do (or are unable to do).”

45

“It is far more common for people to allow ego to stand in the way of learning.”

46

“I think so many people are reactive … they see things in a short term way when they’re right up against it. If it didn’t happen in your life before, then you’re not paying attention, you don’t think it’s possible. But almost all the important events never happen in your life before … The monetary system breaks down … the oil shock … didn’t happen before …”

47

“I think that the first thing is you should have a strategic asset allocation mix that assumes that you don’t know what the future is going to hold.”

48

“I don’t get caught up in the moment.” – Dalio said at CNBC’s Squawk Box morning show in 2012

49

“Never say anything about a person you wouldn’t say to them directly, and don’t try people without accusing them to their face. Badmouthing people behind their backs shows a serious lack of integrity and is counterproductive. It doesn’t yield any beneficial change, and it subverts both the people you are badmouthing and the environment as a whole.”

50

“And then everything else I basically view as just a case at hand. So how does the machine work that you have a financial crisis? How does deleveraging work – what is the nature of that machine? And what is human nature, and how do you raise a community of people to run a business?”

51

“Do not feel bad about your mistakes or those of others. Love them! Remember that one: they are to be expected; two: they’re the first and most essential part of the learning process, and three: feeling bad about them will prevent you from getting better.”

52

“I think I did everything right, he said. I did well when others didn’t. I happen to earn one-fifth of the profits. I pay about a third in taxes, I give away about a third, and I follow the law. And if I’m doing something they think is incorrect, I’d like to know that.”

53

“Principles are concepts that can be applied over and over again in similar circumstances as distinct from narrow answers to specific questions. Every game has principles that successful players master to achieve winning results. So does life. Principles are ways of successfully dealing with the laws of nature or the laws of life. Those who understand more of them and understand them well know how to interact with the world more effectively than those who know fewer of them or know them less well.”

54

“Creditors get paid less or get paid over a longer time frame or at a lower interest rate.”

55

“Remember that the only purpose of money is to get you what you want, so think hard about what you value and put it above money. How much would you sell a good relationship for? There’s not enough money in the world to get you to part with a valued relationship.”

56

“If you can’t successfully do something, don’t think you can tell others how it should be done.”

57

“When you think that it’s too hard, remember that in the long run, doing the things that will make you successful is a lot easier than being unsuccessful.”

58

“Don’t mistake possibilities for probabilities. Anything is possible. It’s the probabilities that matter. Everything must be weighed in terms of its likelihood and prioritized. Believe it or not, your pain will fade, and you will have many other opportunities ahead of you.”

59

“Almost nothing can stop you from succeeding if you have flexibility and self-accountability.”

60

“If you’re not failing, you’re not pushing your limits, and if you’re not pushing your limits, you’re not maximizing your potential.”

61

“That’s what they’re attracted to. They tend to buy high and sell low, and so an average man should not be playing this game in that way …”

62

“I believe that understanding what is good is obtained by looking at the way the world works and figuring out how to operate in harmony with it to help it evolve.”

63

“Don’t let the little things divide you when your agreement on the big things should bind you.”

64

“Life is like a game where you seek to overcome the obstacles that stand in the way of achieving your goals. You get better at this game through practice. The game consists of a series of choices that have consequences. You can’t stop the problems and choices from coming at you, so it’s better to learn how to deal with them.”

65

“Success comes from knowing what you don’t know, more than coming from what you do know.”

66

“Pain plus reflection equals progress, Pain, when we’re in the moment of pain, we tend not to reflect, but after that moment of pain, whenever anybody makes a mistake, about anything, it’s not just the market, it’s about life. There’s a message probably there.”

67

“If you can stare hard at your problems, they almost always shrink or disappear, because you almost always find a better way of dealing with them than if you don’t face them head-on. The more difficult the problem, the more important it is that you stare at it and deal with it.”

68

“I believe that all organizations have two types of people: those who work to be part of a mission, and those who work for a paycheck.”

69

“I learned that if you work hard and creatively, you can have just about anything you want, but not everything you want. Maturity is the ability to reject good alternatives to pursue even better ones.”

70

“Be wary of the arrogant intellectual who comments from the stands without having played on the field.”

71

“Not being controlled by an emotion helps to see things at a higher level.”

72

“Most of life’s greatest opportunities come out of moments of struggle; it’s up to you to make the most of these tests of creativity and character.”

73

“Some people go through life collecting all kinds of observations and opinions like pocket lint, instead of just keeping what they need. They have ‘detail anxiety,’ worrying about unimportant things.”

74

“To be ‘good’ something must operate consistently with the laws of reality and contribute to the evolution of the whole; that is what is most rewarded.”

75

“Great people are hard to find, so make sure you think about how to keep them.”

76

“Experience taught me how invaluable it is to reflect on and write down my decision-making criteria whenever I made a decision, so I got in the habit of doing that.”

77

“The more you think you know, the more closed-minded you’ll be.”

78

“Don’t just pay attention to your job; pay attention to how your job will be done if you are no longer around.”

79

“Choose your habits well. Habit is probably the most powerful tool in your brain’s toolbox.”

80

“I notice a difference from the moment I meditate. Meditation more than anything in my life was the biggest ingredient of whatever success I’ve had.”

81

“Every game has principles that successful players master to achieve winning results. So does life.”

82

“The main reason I write the daily observations is that I want to know where I’m wrong, the hedge-fund manager said. So lots of times if somebody points something out it helps me, and I want to have a diversified bet of uncorrelated bets.”

83

“Remember that most people are happiest when they are improving and doing the things that suit them naturally and help them advance. So learning about your people’s weaknesses is just as valuable (for them and you) as is learning their strengths.”

84

“Most fundamental work principle: Make your passion and your work the same and do it with people you want to be with.”

85

“For every mistake that you learn from, you will save thousands of similar mistakes in the future, so if you treat mistakes as learning opportunities that yield rapid improvements, you should be excited by them. But if you treat them as bad things, you will make yourself and others miserable, and you won’t grow.”

86

“People who confuse what they wish were true with what is true create distorted pictures of reality that make it impossible for them to make the best choices.”

87

“Success is achieved by people who deeply understand reality and know how to use it to get what they want. The converse is also true: idealists who are not well-grounded in reality create problems, not progress.”

88

“By and large, life will give you what you deserve, and it doesn’t give a damn what you like. So it is up to you to take full responsibility to connect what you want with what you need to do to get it, and then to do those things.” ― Ray Dalio

89

“Don’t worry about looking good – worry about achieving your goals.”

90

“Pull in your belt, spend less, and reduce debt.”

91

“He who lives by the crystal ball will eat shattered glass.”

92

“I believe there is an infinite number of laws of the universe and that all progress or dreams achieved come from operating in a way that’s consistent with them. These laws and the principles of how to operate in harmony with them have always existed. We were given these laws by nature. The man didn’t and can’t make them up. He can only hope to understand them and use them to get what he wants.”

93

“More than anything else, what differentiates people who live up to their potential from those who don’t is a willingness to look at themselves and others objectively.”

94

“Recognize that having an effective idea meritocracy requires that you understand the merit of each person’s ideas.”

95

“Time is like a river that carries us forward into encounters with reality that require us to make decisions. We can’t stop our movement down this river, and we can’t avoid those encounters. We can only approach them in the best possible way.”

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