Ray Dalio Profile picture
Mar 7 4 tweets 1 min read
Before moving forward with a new plan, take the time to reflect on how the machine has been working up till now. (1/4) Image
Sometimes people have problems putting current conditions into perspective or projecting into the future. Sometimes they forget who or what caused things to go well or poorly. (2/4)
By asking them to "tell the story" of how we got here, or by telling the story yourself, you highlight important items that were done well or poorly in relation to their consequences, draw attention to the bigger picture and the overarching goals, (3/4)
specify the people who are responsible for specific goals and tasks, and help achieve agreement. Being able to connect all these items at multiple levels is essential for people to understand the plan, give feedback on it, and eventually believe in it. #principleoftheday (4/4)

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More from @RayDalio

Feb 23
It is harder to run an idea meritocracy in which disagreements are encouraged than a top-down autocracy in which they are suppressed. (1/6)
But when believable parties to disagreements are willing to learn from each other, their evolution is faster and their decision making is far better.

The key is in knowing how to move from disagreement to decision making. (2/6)
It is important that the paths for doing this are clear so that who is responsible for doing what is known. (3/6)
Read 6 tweets
Feb 16
This chart shows my index of conflict just between the US and China since 1970. (1/4) Image
Based on what we have been seeing, the United States and China are clearly in four types of war (trade/economic war, technology war, capital war, & geopolitical war), though not intensely but they are intensifying. They are not yet in the fifth type of war (military war). (2/4)
As shown in the previous cases, in particular the 1930–1945 case, these four types of wars precede military wars by about five to 10 years. Though the risks of military war seem relatively low, they are increasing. (3/4)
Read 4 tweets
Feb 16
If you're like most people, the idea of facing the unvarnished truth makes you anxious. To get over that, you need to understand intellectually why untruths are scarier than truths and then, through practice, get accustomed to living with them. (1/4)
If you're sick, it's natural to fear your doctor's diagnosis--what if it's cancer or some other deadly disease? As scary as the truth may turn out to be, you will be better off knowing it in the long run because it will allow you to seek the most appropriate treatment. (2/4)
The same holds for learning painful truths about your own strengths and weaknesses. Knowing and acting on the truth is what we call the "big deal" at Bridgewater. (3/4)
Read 4 tweets
Feb 15
That was certainly the case in the 1990–2008 period. (1/4)
Throughout the long-term debt cycle, from 1945 until 2008, whenever the Federal Reserve wanted the economy to pick up it would lower interest rates and make money and credit more available, which would increase stock and bond prices and increase demand. (2/4)
That was how it was done until 2008—i.e., interest rates were cut, and debts were increased faster than incomes to create unsustainable bubbles. That changed when the bubble burst in 2008 and interest rates hit 0 percent for the first time since the Great Depression. (3/4)
Read 4 tweets
Feb 15
Escalating means saying you don’t believe you can successfully handle a situation and that you are passing the Responsible Party job to someone else. (1/5)
The person you are escalating to—the person to whom you report—can then decide whether to coach you through it, take control themselves, have someone else handle it, or do something else. (2/5)
It’s critical that escalation not be seen as a failure but as a responsibility. All Responsible Parties will eventually face tests that they don’t know whether they can handle; (3/5)
Read 5 tweets
Feb 9
The external conflict gauge shown here measures the levels of economic, political/cultural, and military conflict between pairs of major countries. (1/4)
As shown, the greatest conflict is between the US and China, the two greatest powers in the world that have comparable amounts of power—more than enough to make a war between them the most devastating in history. (2/4)
The amount of this conflict is 1 standard deviation above normal, which is pretty severe in relation to past conflicts between countries. (3/4)
Read 4 tweets

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