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I think this.... > Mr. Dalio returned to run Bridgewater earlier this year after stepping back to a mentor role six years ago. Is what's driving almost all of

I think this.... > Mr. Dalio returned to run Bridgewater earlier this year after stepping back to a mentor role six years ago. Is what's driving almost all of his new found desire for a unified AI to run everything. Here you have a man who by any measure has been wildly successful, he tried stepping back and letting other take over but ended up finding that the team he left in charge didn't make the exact decisions he would have. If the story ended there it wouldn't be in any way surprising, who hasn't left a team and second guessed the decisions that the new leaders have made. It turns out that when you are worth 15 Billion one of the things you can do is hire a shit load of AI experts, like one of the heads of IBM's Watson team, to build an AI to make decisions based on WWRDD, "What would Ray Dalio Do"? Since his first retirement failed, this is his new take on how to have his second retirement go smoother. Just build an AI that bases all decisions on the Bridge water principles that he wrote down years ago. see: https://www.principles.com/ https://www.principles.com/ As an aside, he recently let Tony Robbins publish his ideal portfolio, the all weather portfolio. It's actually a pretty strong portfolio for the average person. http://awealthofcommonsense.com/2014/11/back-testing-tony-robbins-weather-portfolio/ http://awealthofcommonsense.com/2014/11/back-testing-tony-ro... http://www.moneysense.ca/invest/raining-on-the-all-seasons-portfolio/ http://www.moneysense.ca/invest/raining-on-the-all-seasons-p...

JabavuAdams 10y ago
Wish I'd had a WWJCD (What Would Jim Comey Do?) AI before the election. That bloody letter cost me a lot of money. Actually, it's my own fault, really -- anytime I have a bright idea for a discretionary trade, empirically I lose money. EDIT> What makes this not a total non-sequiter is that James Comey worked at Bridgewater before become the FBI director.
dsacco 10y ago
Ray Dalio is a fascinating person. He purchased a one-word .com to share his personal and management principles, and now he is attempting to train a learning system to automate and preserve his decision-making. There's a movie script somewhere in here. Exaggerate the narcissism, advance the science 50-100 years and we've got an eccentric billionaire that causes an artificial intelligence uprising. Like something between Transcendence and Westworld. A few other thoughts from reading the article: • Dalio seems like a classic case of someone pursuing immortality in whatever way he can. His coming out of retirement, his efforts to leave a legacy of "radical transparency" and to make his company an "altar of openness", etc. He is also 67 years old. He may feel as though he is "running out of time", and I've seen an uptick in media mentions surrounding him and Bridgewater. There's quite a few religious themes here. • Bridgewater might be an excellent case study in radical changes that result in success, but it also might not. In particular, there are two challenges. First is the culture of Wall St, which lends itself more to a "show me the results" manifesto and can probably tolerate a culture of open criticism more than most other companies. The other is that Bridgewater is a single datapoint. We know almost nothing about the inner workings of e.g. RenTech, but they are just as impressive (albeit with lower AUM) and have a more "academic" culture. Does the culture matter that much, or is the success a result of a confluence of other factors? Someone who appears to pride himself on his contrarian decision making like Dalio might see his culture as the defining differentiator responsible for his success. • I find it much more likely that Bridgewater's culture of open criticism (and elements of quantified self?) is like Zappos Holacracy and Valve's "no managers" manifestos, rather than a new set of principles to be brought down from on high. Each of these companies prides itself, and to some extent claims is the reason for its success, on a culture that was deliberately implemented instead of organically grown. After you see enough of these I feel you start to become "culture agnostic", and from my point of view I don't feel any of them has a causal relationship with profitability or productivity. • A nitpick here - it seems hypocritical to reduce a culture of "radical transparency." If you decide to change the status quo from radical transparency for 100% of the staff to radical transparency for 10% of the staff, then what is so radical about it? Equally, what does it mean to only dole out radical transparency to those "responsible enough" to receive it? That sounds like...transparency.
- djtriptych 10y ago
  The protagonist in Billions seems to be basically an evil version of Dalio. I think characters based on him have made it to the screen a few times already...
  - dsacco 10y ago
    Billions is actually based on Steven Cohen and his hedge fund, SAC Capital. It was bumped down to a family office for insider trading, and subsequently rebranded as Point72. Aside from basic inspiration, the plot bears almost no resemblance to the actual hedge fund or Cohen himself.
- SkyMarshal 10y ago
  * ... Does the culture matter that much, or is the success a result of a confluence of other factors? Someone who appears to pride himself on his contrarian decision making like Dalio might see his culture as the defining differentiator responsible for his success. * I find it much more likely that Bridgewater's culture of open criticism (and elements of quantified self?) is like Zappos Holacracy and Valve's "no managers" manifestos, rather than a new set of principles to be brought down from on high. Each of these companies prides itself, and to some extent claims is the reason for its success, on a culture that was deliberately implemented instead of organically grown. After you see enough of these I feel you start to become "culture agnostic", and from my point of view I don't feel any of them has a causal relationship with profitability or productivity. I've been wondering the same about Silicon Valley's obsession with culture. It seems cargo-cultish in so many ways - correlated but not necessarily causal, and almost certainly a victim of survivorship bias given the group think about culture among the startup crowd. Thiel's advice that your startup should be like a cult felt like that too. But then I did a startup, and saw many others close hand, and realized that Thiel is right, at least initially it needs to be a cult. In the early stages pre-traction you simply don't have the bandwidth for deep philosophical disagreements among the team about fundamental product direction and strategy. That part has got to be like a cult where everyone is on the same page and you can focus like a laser on developing your team's ability to work together and execute like a well-oiled machine. That capability is not to be taken for granted, and does not just happen, you have to make it happen with intent, and unless you get really lucky with initial hires who just gel right off the bat, every early startup goes through it. One of the main pitfalls for early stage startups is emerging disagreements over product strategy and direction among the co-founders or leadership team. But this is exacerbated by slow execution, leaving more room and time for self-doubt and second-guessing. Thus developing execution capability early on is the most important strategy. Execution both helps you get to a point faster where you can see whether your product strategy is right or wrong, and helps you pivot faster if wrong. If you're going to deliberately implement a culture, make sure its focus is on execution ability. Joel Spolksky's "smart and gets things done" or PG's "relentlessly resourceful" should be a good enough template for 99% of startups out there.
yannickt 10y ago
> see: https://www.principles.com/ https://www.principles.com/ This is a very, very good read. Thanks for sharing.
- prostoalex 10y ago
  This is truly one of the best readings, one of the three books I recommend everyone read (and re-read) every now and then.
  - samatman 10y ago
    Would you care to share the other two?
    - prostoalex 10y ago
      "The Power of Now" by Eckhart Tolle and "Starting Strength" by Mark Rippetoe (applicable to men mostly) contain lifetime lessons on mind and body management. "Principles" is very useful for mental models and just critical thinking (or, rather, structured self-doubting).
      - brilliantcode 10y ago
        just went ahead and 1-click ordered Eckhart's book. I recall listening to the audiobook I torrented 4 years ago but never got to finish it. I'm reading Principles.com and I'm blown away by how similar it is to my own model of the world but without the same confidence and experiences to back it up the way Ray did. I think perhaps I was being too judgemental about Ray by reading the WSJ article. But to be fair, I'm constantly trying to grasp reality. Perhaps it's better to go in without strong opinions at all...#2017resolutions
        bitexploder 10y ago
        Tolle is full of hand wavy pop psychology junk. At the end of the day Tolle is full of mashed up philosphies he mixed and matched until it tasted really sweet. What are you left with? A loosely defined mess that reads like so many other self help books. I am critical here but with good reason, this is like going shopping at the philosophy store and just buying candy. It comes off as blatantly anti reason in places too. Read Epictetus, Aurelieus, Minsky (Society of Mind), GEB, even Thoreau. Get inside your thinking machine. Feelings are okay. Thinking is okay. Orient around what you will create. Learn to meditate a little. Read Tolle if you are set on it, but I say most thinking people are better off with more original sources that challenge and ask more of their readers.
applecore 10y ago
I'm not sure All Seasons is such a great portfolio... It's way overweight U.S. Treasury bonds (55%) and underweight stocks (30%). And what's with 15% in gold and commodities (which produces no interest or dividend income)?
- qwrusz 10y ago
  In fact, Dalio himself just a couple years ago contacted Bridgewater's clients to tell them the firm fucked up, had miscalculated things and was over-exposed to duration risk (basically meaning they owned too many bonds, as you say). The studying of this risk from bonds and how to "mitigate" it is ongoing at Bridgewater. Kinda hard to recommend a portfolio from a guy who admits it is broken and is still trying to fix it. I've seen chollida1 comments in other finance-related threads and I think he knows his stuff. On this one though I agree with you, that portfolio has some serious issues and I would not feel comfortable recommending it to the average person as is. Here is an article talking about Ray Dalio recognizing this "all weather" portfolio was bad and they needed to make corrections: https://www.bloomberg.com/news/articles/2013-08-14/dalio-patched-all-weather-s-rate-risk-as-u-s-bonds-fell https://www.bloomberg.com/news/articles/2013-08-14/dalio-pat...
  - nl 10y ago
    Kinda hard to recommend a portfolio from a guy who admits it is broken and is still trying to fix it. Honestly, I think that this is probably the only thing that makes me think there could be something worthwhile. All portfolios are broken in some way. It's refreshing to hear a proponent of one admit it and try to fix it. (Also, I highly recommend Lewis' "The Undoing Project" if you think this is a problem)
    - qwrusz 10y ago
      Reading my comment again I should have worded it better and more clearly. Thanks for pointing out what you did. My comment was specifically meant as a response to the portfolio recommended above, that was linked to and that appears in Tony Robbins' book. That portfolio is broken and outdated in that form. I should have said more clearly, it is hard to recommend that portfolio at this time because the creator of the portfolio, Ray Dalio, has subsequently said there are problems with it and he is still working on fixing those problems. Especially considering the portfolio is described to regular non-professional investors as a type of "set it and forget it" longer term investment portfolio. One that doesn't need active monitoring and works all market conditions. It is dangerous to recommend as is. For sure there are merits to the all weather portfolio! Its risk parity structures were a ground-breaking, genius move by Ray Dalio that made him rich and famous (famous in the investing world at least). I have a ton of respect for Dalio, I've read his principles more than once. He is quite private, his achievements and contributions are not as well-known as some other old billionaires of the investing world but he is just as skilled. Basically, the Tony Robbins/Ray Dalio portfolio has potential. In its current form it offers many lessons to a lay investor just by reading about it and the theories behind it. But before one invests their hard earned money in the portfolio, consider that some major changes have happened to the portfolio recently and other major changes may be in the works. It could turn out great or it could be scrapped and turn out not to work as thought. So a potential investor might want to hold off following that outdated portfolio strategy and re-evaluate once more info about an updated version is available.
pesenti 10y ago
David Ferrucci lead the team who built the Watson research system that won at Jeopardy. He left for Bridgewater in 2014, before the IBM Watson unit was created, and way before Dalio came back to run Bridgewater.

JabavuAdams 10y ago

Wish I'd had a WWJCD (What Would Jim Comey Do?) AI before the election. That bloody letter cost me a lot of money. Actually, it's my own fault, really -- anytime I have a bright idea for a discretionary trade, empirically I lose money. EDIT> What makes this not a total non-sequiter is that James Comey worked at Bridgewater before become the FBI director.

dsacco 10y ago

Ray Dalio is a fascinating person. He purchased a one-word .com to share his personal and management principles, and now he is attempting to train a learning system to automate and preserve his decision-making. There's a movie script somewhere in here. Exaggerate the narcissism, advance the science 50-100 years and we've got an eccentric billionaire that causes an artificial intelligence uprising. Like something between Transcendence and Westworld. A few other thoughts from reading the article: • Dalio seems like a classic case of someone pursuing immortality in whatever way he can. His coming out of retirement, his efforts to leave a legacy of "radical transparency" and to make his company an "altar of openness", etc. He is also 67 years old. He may feel as though he is "running out of time", and I've seen an uptick in media mentions surrounding him and Bridgewater. There's quite a few religious themes here. • Bridgewater might be an excellent case study in radical changes that result in success, but it also might not. In particular, there are two challenges. First is the culture of Wall St, which lends itself more to a "show me the results" manifesto and can probably tolerate a culture of open criticism more than most other companies. The other is that Bridgewater is a single datapoint. We know almost nothing about the inner workings of e.g. RenTech, but they are just as impressive (albeit with lower AUM) and have a more "academic" culture. Does the culture matter that much, or is the success a result of a confluence of other factors? Someone who appears to pride himself on his contrarian decision making like Dalio might see his culture as the defining differentiator responsible for his success. • I find it much more likely that Bridgewater's culture of open criticism (and elements of quantified self?) is like Zappos Holacracy and Valve's "no managers" manifestos, rather than a new set of principles to be brought down from on high. Each of these companies prides itself, and to some extent claims is the reason for its success, on a culture that was deliberately implemented instead of organically grown. After you see enough of these I feel you start to become "culture agnostic", and from my point of view I don't feel any of them has a causal relationship with profitability or productivity. • A nitpick here - it seems hypocritical to reduce a culture of "radical transparency." If you decide to change the status quo from radical transparency for 100% of the staff to radical transparency for 10% of the staff, then what is so radical about it? Equally, what does it mean to only dole out radical transparency to those "responsible enough" to receive it? That sounds like...transparency.

djtriptych 10y ago
The protagonist in Billions seems to be basically an evil version of Dalio. I think characters based on him have made it to the screen a few times already...
- dsacco 10y ago
  Billions is actually based on Steven Cohen and his hedge fund, SAC Capital. It was bumped down to a family office for insider trading, and subsequently rebranded as Point72. Aside from basic inspiration, the plot bears almost no resemblance to the actual hedge fund or Cohen himself.
SkyMarshal 10y ago
* ... Does the culture matter that much, or is the success a result of a confluence of other factors? Someone who appears to pride himself on his contrarian decision making like Dalio might see his culture as the defining differentiator responsible for his success. * I find it much more likely that Bridgewater's culture of open criticism (and elements of quantified self?) is like Zappos Holacracy and Valve's "no managers" manifestos, rather than a new set of principles to be brought down from on high. Each of these companies prides itself, and to some extent claims is the reason for its success, on a culture that was deliberately implemented instead of organically grown. After you see enough of these I feel you start to become "culture agnostic", and from my point of view I don't feel any of them has a causal relationship with profitability or productivity. I've been wondering the same about Silicon Valley's obsession with culture. It seems cargo-cultish in so many ways - correlated but not necessarily causal, and almost certainly a victim of survivorship bias given the group think about culture among the startup crowd. Thiel's advice that your startup should be like a cult felt like that too. But then I did a startup, and saw many others close hand, and realized that Thiel is right, at least initially it needs to be a cult. In the early stages pre-traction you simply don't have the bandwidth for deep philosophical disagreements among the team about fundamental product direction and strategy. That part has got to be like a cult where everyone is on the same page and you can focus like a laser on developing your team's ability to work together and execute like a well-oiled machine. That capability is not to be taken for granted, and does not just happen, you have to make it happen with intent, and unless you get really lucky with initial hires who just gel right off the bat, every early startup goes through it. One of the main pitfalls for early stage startups is emerging disagreements over product strategy and direction among the co-founders or leadership team. But this is exacerbated by slow execution, leaving more room and time for self-doubt and second-guessing. Thus developing execution capability early on is the most important strategy. Execution both helps you get to a point faster where you can see whether your product strategy is right or wrong, and helps you pivot faster if wrong. If you're going to deliberately implement a culture, make sure its focus is on execution ability. Joel Spolksky's "smart and gets things done" or PG's "relentlessly resourceful" should be a good enough template for 99% of startups out there.

yannickt 10y ago

> see: https://www.principles.com/ https://www.principles.com/ This is a very, very good read. Thanks for sharing.

prostoalex 10y ago
This is truly one of the best readings, one of the three books I recommend everyone read (and re-read) every now and then.
- samatman 10y ago
  Would you care to share the other two?
  - prostoalex 10y ago
    "The Power of Now" by Eckhart Tolle and "Starting Strength" by Mark Rippetoe (applicable to men mostly) contain lifetime lessons on mind and body management. "Principles" is very useful for mental models and just critical thinking (or, rather, structured self-doubting).
    - brilliantcode 10y ago
      just went ahead and 1-click ordered Eckhart's book. I recall listening to the audiobook I torrented 4 years ago but never got to finish it. I'm reading Principles.com and I'm blown away by how similar it is to my own model of the world but without the same confidence and experiences to back it up the way Ray did. I think perhaps I was being too judgemental about Ray by reading the WSJ article. But to be fair, I'm constantly trying to grasp reality. Perhaps it's better to go in without strong opinions at all...#2017resolutions
      - bitexploder 10y ago
        Tolle is full of hand wavy pop psychology junk. At the end of the day Tolle is full of mashed up philosphies he mixed and matched until it tasted really sweet. What are you left with? A loosely defined mess that reads like so many other self help books. I am critical here but with good reason, this is like going shopping at the philosophy store and just buying candy. It comes off as blatantly anti reason in places too. Read Epictetus, Aurelieus, Minsky (Society of Mind), GEB, even Thoreau. Get inside your thinking machine. Feelings are okay. Thinking is okay. Orient around what you will create. Learn to meditate a little. Read Tolle if you are set on it, but I say most thinking people are better off with more original sources that challenge and ask more of their readers.

applecore 10y ago

I'm not sure All Seasons is such a great portfolio... It's way overweight U.S. Treasury bonds (55%) and underweight stocks (30%). And what's with 15% in gold and commodities (which produces no interest or dividend income)?

qwrusz 10y ago
In fact, Dalio himself just a couple years ago contacted Bridgewater's clients to tell them the firm fucked up, had miscalculated things and was over-exposed to duration risk (basically meaning they owned too many bonds, as you say). The studying of this risk from bonds and how to "mitigate" it is ongoing at Bridgewater. Kinda hard to recommend a portfolio from a guy who admits it is broken and is still trying to fix it. I've seen chollida1 comments in other finance-related threads and I think he knows his stuff. On this one though I agree with you, that portfolio has some serious issues and I would not feel comfortable recommending it to the average person as is. Here is an article talking about Ray Dalio recognizing this "all weather" portfolio was bad and they needed to make corrections: https://www.bloomberg.com/news/articles/2013-08-14/dalio-patched-all-weather-s-rate-risk-as-u-s-bonds-fell https://www.bloomberg.com/news/articles/2013-08-14/dalio-pat...
- nl 10y ago
  Kinda hard to recommend a portfolio from a guy who admits it is broken and is still trying to fix it. Honestly, I think that this is probably the only thing that makes me think there could be something worthwhile. All portfolios are broken in some way. It's refreshing to hear a proponent of one admit it and try to fix it. (Also, I highly recommend Lewis' "The Undoing Project" if you think this is a problem)
  - qwrusz 10y ago
    Reading my comment again I should have worded it better and more clearly. Thanks for pointing out what you did. My comment was specifically meant as a response to the portfolio recommended above, that was linked to and that appears in Tony Robbins' book. That portfolio is broken and outdated in that form. I should have said more clearly, it is hard to recommend that portfolio at this time because the creator of the portfolio, Ray Dalio, has subsequently said there are problems with it and he is still working on fixing those problems. Especially considering the portfolio is described to regular non-professional investors as a type of "set it and forget it" longer term investment portfolio. One that doesn't need active monitoring and works all market conditions. It is dangerous to recommend as is. For sure there are merits to the all weather portfolio! Its risk parity structures were a ground-breaking, genius move by Ray Dalio that made him rich and famous (famous in the investing world at least). I have a ton of respect for Dalio, I've read his principles more than once. He is quite private, his achievements and contributions are not as well-known as some other old billionaires of the investing world but he is just as skilled. Basically, the Tony Robbins/Ray Dalio portfolio has potential. In its current form it offers many lessons to a lay investor just by reading about it and the theories behind it. But before one invests their hard earned money in the portfolio, consider that some major changes have happened to the portfolio recently and other major changes may be in the works. It could turn out great or it could be scrapped and turn out not to work as thought. So a potential investor might want to hold off following that outdated portfolio strategy and re-evaluate once more info about an updated version is available.

pesenti 10y ago

David Ferrucci lead the team who built the Watson research system that won at Jeopardy. He left for Bridgewater in 2014, before the IBM Watson unit was created, and way before Dalio came back to run Bridgewater.