Notes on Ray Dalio's Principles: Life and Work
I recently finished reading Ray
Dalio's book Principles: Life and Work.
I took notes along the way, which you can find below. My Kindle highlights
- Dalio's principles are what I would
shortcuts for problems matching a pattern.
- Much of what Dalio describes bears striking similarity
to Amazon's Leadership
- Dalio mentions encountering the "fork-in-the-road" of how to handle
two seemingly essential but mutually exclusive options: 1) being
radically truthful with each other including probing to bring our problems
and weaknesses to the surface so we could deal with them forthrightly and
2) having happy and satisfied employees. Dalio states that
when faced with the choice between two things you
need that are seemingly at odds, go slowly to figure out how you can have
as much of both as possible.
- I had high hopes for this book based on (a) the interview with Dalio
on The Tim Ferriss Show, and (b) the strong introduction in the book. The
book introduction (along with title) primes the reader to feel like
they're about to delve into a timeless work on universal truths. The rest
of the book, although thought provoking, did not feel as axiomatic. Early
in the book however, Dalio is very up front that this book consists
of his principles, not all of which will be universally
- Dalio comes across as a little "fire happy". For example:
people] understand that the chances their job will not work out are higher
than normal, but they embrace the risk because the upside of succeeding is
huge relative to the downside of having it not work out. Dalio
doesn't seem to directly address the risk this might present to
Bridgewater's recruitment pipeline, having a company with a reputation for
higher than average firings. E.g. would talented people who would have to
relocate (potentially internationally) to work at Bridgewater be less
inclined to apply, knowing they would face a higher than average risk of
being fired? Are the upsides sufficiently great to cancel this risk out?
Does the reputation for higher than average firings increase the
company's desirability to some job candidates, based on it increasing the
company's perceived excellence?
- Interesting data point: Bridgewater gets luke-warm ratings on
Glassdoor: 3.4/5 stars, 61% recommend to a friend, 77% approve of CEO.
Caveat: not clear exactly how much Glassdoor reviews impact a company's
perceived reputation to potential employee's, or how accurately they
reflect the typical experience across all current employees.
- Dalio presents the notion of an
idea meritocracy, built on
individuals' believability. Dalio clearly distinguishes this from a
democracy. In a democracy, everybody gets an equal vote, irrespective of
competence. In an idea meritocracy, everybody's individual vote is
weighted by their believability.
- Dalio suggests that you should think of yourself as two machines. One
is the you that actions things. The other is the you that tweaks the
operation of the actioning machine to achieve a desired outcome.
Regarding the latter, I would term this "dispassionate
- Dalio discusses probing multiple levels deep, until a root cause is
identified. Interestingly, Dalio believes that individual
people should be called out explicitly during this process,
e.g. people should avoid using the royal "we". This is in contrast to a
number of technology companies which aim for blameless post-mortems.
- Dalio is fond of pyschometrics. IIRC, pyschometrics as a field is
fraught with dubious results. Would have to revisit.
- One of Dalio's work principles is literally "once a decision is made,
everyone should get behind it even though individuals may stil
cf. Amazon's Disagree and
- "Double do" rather than "double check". Seems applicable for high
- Dalio claims that great people have great character and great
capabilities. Dalio goes on to claim those with one but not the other are
dangerous. Reminds me of Warren Buffett's quote that you want people who
have integrity, intelligence and energy—if they don't have integrity
though, then you want them to be dumb and lazy.
- Dalio states that radical transparency reduces office politics/bad
behavior, as that's more likely to take place behind closed doors.