Principles by Ray Dalio is a book that I received as a gift Christmas 2017 from a friend, but I hadn't gotten around to reading it until a year later. I'm glad I did. For context, Ray Dalio is the founder of the world's most successful hedge fund, Bridgewater Associates. He strongly emphasizes the importance of writing down a set of "principles" for different areas of life, and wrote this book as a way to bring his life and work principles together. I am not yet done this book, but I wanted to share the list of notes that I took while reading the book for you to get a head start. I'll continue to add to this list as I read.

  • xiv - "I know I'm right" --> "How do I know I'm right?" (believability)
  • xv - systemize thinking and decision
  • xviv - think for yourself! --> what do you want, what is true, and what are you going to do about it?
  • p8 - feat of boredom and mediocrity more so than fear of failure
  • p14 - learned not to believe government policymakers when they say they won't let currency devaluation happen (since 1971)
  • p16 - don't bet on the thing everyone is betting on
  • p20 - "desired to have a child, so we got married"
  • p22 - always best to assume you're missing something
  • p22 - wanted meaningful work, "being on a mission to become engrossed in", and wanted meaningful relationships (working with people you deeply cared about and was cared for)
  • p28 - inverting the yield curve - when short-term interest rates go above long-term interest rates for Federal bonds
  • p32 - gold performs well in inflation, bonds do well in deflation
  • p35 - debts denominated in the country's currency can be successfully restructured
  • p36 - shouldn't care if the right answer is from yourself --> find smartest people who disagree with what you say, to understand their reasoning, know when to not have an opinion + develop, test, systemize timeless and universal principles, balance risk to keep big upside while reducing downside
  • p40 - interested in the idea of being able to predict everything with perfect information using a computer
  • p44 - beta = return on market, alpha = return from being contrarian
  • p52 - didn't value traditional, antiseptic relationships where people put on a "facade of politeness and didn't say what they really thought"
  • p52 - two types of people in an org - those who work as part of a mission, those that work for a paycheck
  • p54 - character, creativity and common sense was better than experience (but not always!)
  • p58 - a handful of good, uncorrelated bets that are balanced/leveraged well leads to lots of upside without as much downside
  • p68 - to create inflation-indexed bonds, created portfolio of leveraged foreign bonds with currency hedged back to USD
  • p70 - when thinking about creating portfolio for family, thought about growth and inflation --> called "risk parity" investing
  • p74 - made his company do the MBTI test
  • p85 - hasn't fully bought into AI "Right people, working with each other and with computers are the key to success"
  • p102 - explained how he looked at economic scenarios like a doctor would diagnose a patient
  • p104 - money and credit, not just money are what drives spending and inflation (on the EU debt crisis)