Ray Dalio is the world’s most successful hedge fund manager. His firm, Bridgewater Associates, founded by Dalio in 1975, currently manages over $150 billion.
And to what does he attribute his great success? Ray believes its two things that make his system work: Meditation, and Practicality.
In a world where information is everywhere, it becomes incredibly difficult to retain your sanity. Dalio says he meditates 20 minutes in the morning, and 20 minutes at night. During the working day, he engrosses himself in the financial markets. His team of analysts keep him informed on what’s happening in the global markets, and Dalio then chooses how to make sense of the information.
In Dalio’s world view, the economy is really quite simple. He believes the economy operates like a machine, and that markets repeat their behavior in cycles.
Let’s take a closer look at the life and mind of Ray Dalio, the Meditating Investor.
Getting Started
Dalio comes from humble beginnings. His mother was a stay-at-home mom, and his father played the saxophone. When Ray was 8, his family moved to Long Island. When he was 12, Ray got a got a job as a caddy in an elite golf club. In this role, he served as caddy to Richard Nixon (before he was president), the Duke of Windsor, and many top Wall Street traders.
Ray was inspired by the discourse he heard on the golf course. After saving up $300 working as a caddy, Ray bought shares of Northeast Airlines. The company was soon acquired by a bigger company, and his money tripled. He continued playing the markets.
By age 16, his portfolio was worth several thousand dollars.
But, something inside him told Ray that there was more to life than just making money. He was inspired by the music and philosophy of the Beatles.
When the Beatles traveled to India to meet with the Maharishi Mahesh Yogi, Dalio began to explore Transcendental Meditation. He began meditating regularly, and has continued to do so daily, to this day.
Great Success
In 2010, one of Dalio’s funds, the Alpha Fund, rose by a whopping 45 percent, earning $15 billion. For that year, the fund’s profit was greater than the combined profits of Amazon, eBay, and Google combined.
Obviously Dalio is doing something right. Unlike most hedge funds, which target high-net worth individuals and institutions, Dalio’s fund almost exclusively handles institutional investors – pension funds, foreign governments, central banks, charities, and university endowments.
Leading executives and businessmen all across the world trust Dalio with their money, and their trust is well-founded.
He Meditates
In a candid interview held at Georgetown University, Ray Dalio revealed: “Meditation, more than anything in my life, was the biggest ingredient of whatever success I’ve had.”
“When I go into a state of meditation,” says Dalio, “I get into a subconscious state. It opens my mind. It relaxes me. And when I carry that relaxation outside of my meditation, into my day, it gives me a centeredness. It gives me an ability to look at things without the emotional hijacking. Without the ego.”
“It also gives me an open-mindedness. And that open-mindedness is where creativity comes from.”
He Has A Macro View of the Economy
Ray has said that his favorite book is: “The Lessons of History,” by Will and Ariel Durant. The book covers 5,000 years of human history, covering everything from politics to how human nature has brought about the evolution of civilization. The book is very typical for Dalio’s world-view.
Unlike most investors that allow current events to over-take their market view, Dalio believes that it’s important to understand the big-picture, in order to make sense of the small things day-to-day.
After forecasting the 2008 financial crash, investors around the world turned to Dalio to understand what he saw that they didn’t.
Due to an overwhelming demand for his market view, Dalio decided to share his market knowledge with the world via a simple animated YouTube video.
The video now has over 2 million views, and provides whoever’s interested with a wonderful template for understanding the world economy. Do yourself a favor, and set aside 30 minutes to watch it. You may not understand everything at first. But, it can’t hurt to try and understand how this great thinker understands the economic machine.
He Knows How To Create An Awesome Company Culture
At this point, you’re probably think that Ray Dalio is a very nice guy. Well, what’s he like as a manager?
The truth is that Dalio uses radical techniques to create an efficient financial firm. Dalio insists that every conversation which takes place in the company is recorded and uploaded to a shared folder where every employee can access it.
The policy is a little strange, and reveals a neurotic element of Dalio’s personality. Then again, Bridgewater is one of the world’s most successful firms, and most employees will try to make the sacrifice in order to be part of a great team.
“We don’t want people trash-talking others behind their backs,” say Dalio. “That’s why we believe in total transparency, and we put that belief into practice.”
To be fair to Dalio, we have also included a full 25-minute interview below where Dalio shares his thoughts on healthy company culture. Is Dalio’s policy correct?! When it comes to the Investing Guru, maybe sometimes it’s better not to ask too many questions.
