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Ray Dalio

@RayDalio

Mar 17

These competitions or wars reward the winners and penalize the losers, which reinforce their strengthenings or their weakenings. They vary in severity from healthy competitions to all-out wars. (1/4)

The progression tends to be from the first one on the list (trade/economic wars) toward the last one on the list (military wars), with each growing in intensity. Then, when a military hot war begins, all four of the other types of wars are applied full-on and weaponized. (2/4)

For these reasons, by monitoring the progression and intensities of the conflicts one can pretty well anticipate what is likely to come next. (3/4)

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Ray Dalio

@RayDalio

Mar 7

Before moving forward with a new plan, take the time to reflect on how the machine has been working up till now. (1/4)

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)

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Ray Dalio

@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)

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Ray Dalio

@RayDalio

Feb 16

This chart shows my index of conflict just between the US and China since 1970. (1/4)

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)

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Ray Dalio

@RayDalio

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)

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Ray Dalio

@RayDalio

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)

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