WEBVTT - Bridgewater's Ray Dalio 0:00:03.120 --> 0:00:05.480 Of the past several decades, one of the most successful 0:00:05.519 --> 0:00:08.400 hedge fund investors in the world has been Ray Dalio. 0:00:08.520 --> 0:00:11.520 Ray Dalio has built Bridgewater and the largest single hedge 0:00:11.560 --> 0:00:14.800 fund in the world, managing more than a hundred billion dollars. 0:00:14.800 --> 0:00:17.640 He's also an accomplished author. In his most recent book, 0:00:17.760 --> 0:00:21.119 The Changing World Order, talks about the rising China and 0:00:21.160 --> 0:00:23.680 the sinking United States. Had a chance to talk to 0:00:23.760 --> 0:00:26.400 him recently about that book and many other things relating 0:00:26.400 --> 0:00:29.520 to the investment world. Ray, thank you very much for 0:00:29.560 --> 0:00:31.920 coming and uh for writing this book. We're gonna talk 0:00:31.920 --> 0:00:35.479 about this principally this evening. UM. I wanted to start though, 0:00:35.520 --> 0:00:38.960 by asking you, uh this. You're running the largest hedge 0:00:38.960 --> 0:00:41.400 fund in the world, more than a d fifty billion dollars. 0:00:42.360 --> 0:00:44.559 How do you have time to write books when you 0:00:44.640 --> 0:00:48.200 were and running that hedge fund. I didn't write either 0:00:48.240 --> 0:00:51.840 of those books. Really, what I did was this book 0:00:52.000 --> 0:00:55.560 was UM. In order to understand what was going on today, 0:00:55.640 --> 0:00:59.040 I needed to do a study, right, and what I 0:00:59.120 --> 0:01:02.680 experienced in life many times before is that the surprises 0:01:02.720 --> 0:01:05.240 that happened to me were things that never happened in 0:01:05.280 --> 0:01:08.240 my lifetime, but happened many times in history. When you 0:01:08.240 --> 0:01:10.200 read the book as I have, and I enjoyed it. 0:01:10.280 --> 0:01:12.520 It took me a couple of sittings to get through 0:01:12.560 --> 0:01:14.959 because it's a lot of detail in here. Um. You 0:01:15.040 --> 0:01:17.160 have a lot of historians that help you because a 0:01:17.240 --> 0:01:20.000 lot of history in here. History. I didn't know you 0:01:20.080 --> 0:01:24.240 have histories. I'm so lucky because I get to speak 0:01:24.280 --> 0:01:29.600 to so many people who are historians, who are practitioners, 0:01:30.080 --> 0:01:35.160 you know, people in different countries, Henry Kissinger, Graham, Alice In, 0:01:35.720 --> 0:01:39.600 you know, just scientists and so on, and then historians. 0:01:39.720 --> 0:01:42.720 So and then I have a fabulous research team. So 0:01:42.800 --> 0:01:46.840 I go into this learning immersion, UM and then UM, 0:01:46.880 --> 0:01:49.480 and I iterate with it. I show them what I've got, 0:01:49.520 --> 0:01:52.480 They come back and that's the process. Okay. So you 0:01:52.560 --> 0:01:55.880 have in here people who have said good things about 0:01:55.880 --> 0:01:58.640 the book, including a number of Treasury secretaries Hank Paulson, 0:01:59.160 --> 0:02:02.040 Tim Geitner. Are Summers hard to get three Treasury secretaries 0:02:02.080 --> 0:02:04.320 agree on anything, but you did. You also have very 0:02:04.320 --> 0:02:07.880 favorable comments about the book from Henry Kissinger and Bill Gates. 0:02:07.880 --> 0:02:15.320 You know both of them, who's smarter? Well, I think, um, 0:02:15.760 --> 0:02:18.679 I think that they would say they each would say 0:02:18.720 --> 0:02:22.960 the other guy, and I think I would say that, um, 0:02:23.000 --> 0:02:26.760 each in their own ways. Okay, so boy, you should 0:02:26.760 --> 0:02:29.799 go into politics or to pose. Okay, your view is 0:02:29.840 --> 0:02:33.919 there are three big cycles in history. It's not fair. Yeah. 0:02:33.440 --> 0:02:36.359 I came with the three things that are happening today, 0:02:36.400 --> 0:02:39.120 and then I found that there are really five, but 0:02:39.240 --> 0:02:41.320 the three three big ones. Yeah, alright, so let's go 0:02:41.320 --> 0:02:44.639 through the first cycle. The first cycle is when economy 0:02:44.720 --> 0:02:48.360 comes together gets wealthy. People are building up the economy 0:02:48.400 --> 0:02:50.800 and eventually they build it up so much they borrow 0:02:50.840 --> 0:02:53.200 more money and maybe they should and they dilute their currency. 0:02:53.280 --> 0:02:55.639 Is that fair? Yeah? I could do it in a 0:02:55.720 --> 0:02:59.120 quicker way. Quicker than that, Well, excuse me, better than that? 0:02:59.800 --> 0:03:07.160 How Now, um, there is um, there's a new water, 0:03:07.240 --> 0:03:10.960 there's a there's usually some fight between the left and 0:03:10.960 --> 0:03:13.000 the right, or it could be foreign countries and whatever 0:03:13.040 --> 0:03:15.440 new water. And then when that begins, it's sort of 0:03:15.480 --> 0:03:22.200 a great equalizer. And capitalism is how fantastic enabler because 0:03:22.280 --> 0:03:24.160 what it does is it gives people who may not 0:03:24.240 --> 0:03:27.600 have anything, who have good ideas capital so they get 0:03:27.639 --> 0:03:30.880 the resources to pursue that. And that's a fabulous thing. 0:03:31.400 --> 0:03:34.040 And then as it rises over a period of time, 0:03:34.080 --> 0:03:37.080 you'll see debt to income ratios rise and so on, 0:03:37.440 --> 0:03:41.640 because everybody gets more funded because debt is buying power 0:03:41.680 --> 0:03:44.320 and everybody wants more buying power. And then also you 0:03:44.400 --> 0:03:49.720 see it naturally UM distributes wealth unequally, and it distributes 0:03:49.800 --> 0:03:55.080 opportunity on equally, so UM as that wealth gaps rise 0:03:55.200 --> 0:04:00.080 and widen. And then also because it's opportunity, parents and 0:04:00.480 --> 0:04:03.880 who have wealthy parents can educate their children in an 0:04:03.960 --> 0:04:07.600 unfair let's say, an unequal way relative to others. And 0:04:07.640 --> 0:04:10.920 so but it over it gets overly indebted. And then 0:04:11.120 --> 0:04:13.720 because all this buying power which comes in the form 0:04:13.800 --> 0:04:17.760 of debt as somebody else's assets, then what happens is 0:04:18.080 --> 0:04:21.200 UM then you lower interest rates. You try to stimulate it. 0:04:21.279 --> 0:04:25.960 So for example, since every cyclical peak and every cyclical 0:04:26.000 --> 0:04:29.359 trough and interest rates was lower than the one before it, 0:04:29.480 --> 0:04:31.920 so that they can stimulate more debt. And then when 0:04:31.920 --> 0:04:34.880 you get to zero interest rates, that doesn't work. So 0:04:34.960 --> 0:04:37.159 they have to print money and they buy money to 0:04:37.360 --> 0:04:42.160 keep get that pile going up, and that creates the cycle. Okay, 0:04:42.240 --> 0:04:45.480 so there's part of that cycle, which is a capital 0:04:45.600 --> 0:04:48.080 markets or UH. And then, by the way, this exists 0:04:48.120 --> 0:04:51.800 almost everywhere. And then with that, and then you see 0:04:51.800 --> 0:04:54.120 the monetization of debt and so on, and with that 0:04:54.680 --> 0:04:59.279 there are also conflicts, conflicts that are the wealth conflicts, 0:04:59.320 --> 0:05:02.000 and related to that the political left and the political 0:05:02.120 --> 0:05:04.880 right and there, and that creates the dynamic that we're 0:05:04.920 --> 0:05:07.920 talking about now you're signing your book. Two examples where 0:05:07.920 --> 0:05:10.560 this has happened before. One is in the Netherlands, where 0:05:10.600 --> 0:05:14.039 the Dutch economy ultimately they had the only reserve currency, 0:05:14.040 --> 0:05:16.440 at least in Western Europe, the guilder, and they did 0:05:16.600 --> 0:05:19.440 some of what you now say we're doing. Is that right, Yeah, 0:05:19.600 --> 0:05:21.880 the same patterns over and over again. They had in 0:05:21.920 --> 0:05:24.920 the beginning, big education, they want a war. Then they 0:05:25.000 --> 0:05:27.719 became very competitive. They went out in the world taking 0:05:27.720 --> 0:05:30.560 their goods and they built ships that were the best 0:05:30.560 --> 0:05:32.400 ships around the world, so they can go anywhere in 0:05:32.440 --> 0:05:35.200 the world. They brought their arms with them and they 0:05:35.400 --> 0:05:38.200 made a fortune. And with that they brought their currency. 0:05:38.680 --> 0:05:41.200 And as they bring their currency, because it's a world 0:05:41.240 --> 0:05:45.200 currency of reserve currency, others want to own it. And 0:05:45.279 --> 0:05:48.320 because others want to own it, because that's buying power, 0:05:48.320 --> 0:05:52.000 it's the common wamp them. And then because of that um, 0:05:52.160 --> 0:05:55.280 then they lend it to the Dutch. So in other words, 0:05:55.320 --> 0:05:59.560 Americans get lent money because others want a whole dollars, 0:05:59.680 --> 0:06:02.719 and then that allows us, that's the exorbitant privilege, to 0:06:02.760 --> 0:06:05.680 get more and more in debt, and then what happens 0:06:05.760 --> 0:06:09.760 is they lose their competitiveness. The British built came along 0:06:09.800 --> 0:06:12.440 and copied from the Dutch and found oh, they can 0:06:12.520 --> 0:06:16.440 make ships better and cheaper, and then they became the competitors. 0:06:16.800 --> 0:06:19.839 And then as the competitors are operating, they take market 0:06:19.880 --> 0:06:23.880 share away, quite similar to lots of technology companies and 0:06:23.920 --> 0:06:27.200 what's going on now. And then what happens is then 0:06:27.240 --> 0:06:29.640 they get more in debt, and then they have the 0:06:29.680 --> 0:06:33.560 other cycle that's operating, and then you have the challenges 0:06:33.640 --> 0:06:36.680 of that. They had the Dutch, they typified by the 0:06:36.880 --> 0:06:39.720 Dutch tool bulb craze where people were spending a lot 0:06:39.720 --> 0:06:43.760 of guilders buying toil bulbs. Right, So that imploded and 0:06:43.800 --> 0:06:46.040 the British came in and they built a big economy, 0:06:46.040 --> 0:06:48.520 and then they kind of went south a bit. They 0:06:48.560 --> 0:06:51.479 had the same and then we came along the United 0:06:51.480 --> 0:06:54.720 States became the biggest economy world around eighteen seventy and 0:06:54.760 --> 0:06:57.640 since World War Two we've been the dominant economy. So 0:06:57.720 --> 0:07:02.040 now we have a lot of debt. You'd say, yeah, trillion, 0:07:02.960 --> 0:07:05.040 good of that, So how are we going to pay 0:07:05.080 --> 0:07:08.880 off at that? By the way, well is the only way. 0:07:09.360 --> 0:07:12.360 In the end, it's always print the money. You know, 0:07:12.480 --> 0:07:15.800 it's always print the money because you see the one 0:07:15.840 --> 0:07:20.040 man's debts or another man's assets. And so if you're 0:07:20.080 --> 0:07:24.320 holding a bond and you receive a you don't get 0:07:24.360 --> 0:07:27.160 compensated for inflation. Let's say people think cash is a 0:07:27.200 --> 0:07:30.800 low investment, low risk investment. Well, they're earning no interest, 0:07:31.120 --> 0:07:34.560 and when you have a seven percent or five percent inflation, 0:07:35.040 --> 0:07:37.600 you lose five percent of your buying power. Or if 0:07:37.600 --> 0:07:40.440 you're owning a bond, you have the same thing. And 0:07:40.520 --> 0:07:43.440 so what happens is not only is there the debt 0:07:43.840 --> 0:07:47.040 that is coming from the new debt created to run 0:07:47.040 --> 0:07:51.680 the deficits, but there become sellers of that debt because 0:07:51.720 --> 0:07:54.239 the owner as an asset, it's not a good asset. 0:07:54.640 --> 0:07:56.920 And then there's so much selling. And what that means 0:07:57.000 --> 0:07:59.520 is that you either have to interest rates have got 0:07:59.600 --> 0:08:03.760 to go up, or and then that grinds things down 0:08:03.920 --> 0:08:06.800 to a close or what they do is they have 0:08:06.920 --> 0:08:09.800 to print money. And so the history of all of 0:08:09.840 --> 0:08:14.480 these cycles is that the coffers are empty because you 0:08:14.560 --> 0:08:16.880 can't continue to spend more than you earn and give 0:08:16.920 --> 0:08:19.400 it to somebody expect them to like it, and then 0:08:19.440 --> 0:08:22.520 you devalue it and that becomes the cycle. And so 0:08:22.600 --> 0:08:26.080 you see the classic cycle of the ingredient is um 0:08:27.040 --> 0:08:29.480 the cycle I'm talking about in terms of supply to man. 0:08:29.520 --> 0:08:32.480 And so what you want to do is presumably let 0:08:32.480 --> 0:08:34.959 people know this is occurring. So maybe they could take 0:08:35.000 --> 0:08:38.840 action by letting their congressman or governors know something about 0:08:38.880 --> 0:08:41.280 this or not. Well, I think there are two two things. 0:08:41.360 --> 0:08:43.320 What you can do to make a better side in 0:08:43.360 --> 0:08:46.960 your contribution, but also how you can individually take care 0:08:46.960 --> 0:08:50.840 of yourself in a situation that might be difficult. Okay, 0:08:51.040 --> 0:08:53.760 so let's finish on the third part of the cycle. 0:08:53.840 --> 0:08:56.240 The third part of the cycle is somebody's rising up. 0:08:56.240 --> 0:08:58.120 And right now you would say China is rising up? 0:08:58.240 --> 0:09:01.600 Is that correct? It there's just numbers and you look 0:09:01.640 --> 0:09:04.760 at it and okay, so if I want to do 0:09:04.800 --> 0:09:06.240 something about it, and I want to live in a 0:09:06.280 --> 0:09:08.679 time when China is not rising up so much, and 0:09:08.720 --> 0:09:11.360 were better off in the US economy. What should I do? 0:09:11.360 --> 0:09:13.480 Should I lobby my members of Congress not to print 0:09:13.520 --> 0:09:17.760 so much money? What should I do about it? If anything? Um, well, 0:09:17.800 --> 0:09:20.720 again it's the cycles. I think. If I think, if 0:09:20.720 --> 0:09:23.959 we go back and we look at history, there are 0:09:24.000 --> 0:09:29.560 three main things that you can do. Okay, first as 0:09:29.600 --> 0:09:33.880 a society individually and then collectively. Um, how do you 0:09:33.920 --> 0:09:36.800 earn more money than you spend? And how do you 0:09:36.840 --> 0:09:40.240 build a balance sheet that has more assets than liabilities. 0:09:40.320 --> 0:09:43.880 That's a healthy and so keeping that in mind, the 0:09:43.960 --> 0:09:49.760 second is um internal conflict or cooperation? Can you have 0:09:50.320 --> 0:09:57.440 internal cooperation because you realize what the consequences are? So 0:09:57.679 --> 0:10:01.240 I think that in the two twenty for elections, there 0:10:01.280 --> 0:10:04.520 is a reasonable chance that neither party will accept losing 0:10:04.520 --> 0:10:08.680 the elections. And that is something that means that democracy 0:10:08.880 --> 0:10:12.000 or a type of civil war of sorts could develop 0:10:12.120 --> 0:10:15.920 in a way. This is realistic. I'm not being um 0:10:16.040 --> 0:10:19.760 exaggerated by that. And when one looks at those types 0:10:19.800 --> 0:10:22.880 of things, there is a worry that one should have 0:10:23.160 --> 0:10:26.280 about the divisiveness and what it means for each other. 0:10:26.600 --> 0:10:30.280 And the same is true internationally. So basically, if you 0:10:30.679 --> 0:10:34.880 anybody who has gone into wars this through history. Um, 0:10:35.360 --> 0:10:37.960 the people who are the most convinced that that's the 0:10:38.000 --> 0:10:41.640 thing to do all regretted going into wars because of 0:10:41.679 --> 0:10:44.160 what wars are like. So the things that I would 0:10:44.200 --> 0:10:47.280 hope to convey is, first of all, what are the arcs? 0:10:47.679 --> 0:10:51.560 Is that right or wrong? In the arcs measured not opinionated. 0:10:51.840 --> 0:10:54.080 Just look at those measurements so that you could see that. 0:10:54.720 --> 0:10:57.640 And then as we think about it, like I have 0:10:57.679 --> 0:11:00.840 a principle, if you worry, you don't have worry, and 0:11:00.880 --> 0:11:03.319 if you don't worry, you need to worry. And what 0:11:03.360 --> 0:11:05.720 I mean by that is if you worry and you 0:11:05.720 --> 0:11:09.080 start to think what this direction could be and what 0:11:09.200 --> 0:11:12.640 it's like, then um, maybe you deal with the things 0:11:12.640 --> 0:11:16.800 that prevent those worries. Where if you don't worry, maybe 0:11:16.880 --> 0:11:19.680 you get into trouble without worrying or with a confidence 0:11:19.679 --> 0:11:22.079 that there are things we can do. The world has 0:11:22.160 --> 0:11:25.280 now more resources than it has ever had, and there 0:11:25.280 --> 0:11:27.520 are things that can be done. Now you're managing a 0:11:27.600 --> 0:11:30.599 hundred and fifty billion plus about them? And why is 0:11:30.640 --> 0:11:32.800 it explained this to me? I really don't know the answer. 0:11:33.280 --> 0:11:35.600 Hedge funds seem to come and go sometimes they're hot, 0:11:35.679 --> 0:11:38.160 sometimes they're cold. Sometimes they go out of business. You've 0:11:38.160 --> 0:11:41.400 been in business for almost half a century and you've 0:11:41.400 --> 0:11:43.320 got a hundred fifty billion. What did you do that 0:11:43.360 --> 0:11:45.719 nobody else has been able to do. What we were 0:11:45.760 --> 0:11:49.360 able to do, UM was to be able to structure 0:11:49.440 --> 0:11:54.800 portfolios in a way that we're UM better in terms 0:11:54.880 --> 0:12:00.559 of the returns, risks and correlations of our investors. So 0:12:00.679 --> 0:12:04.439 to give you that an idea, in other words, UM, 0:12:04.480 --> 0:12:06.760 you could balance things in a way. I could take 0:12:06.840 --> 0:12:11.360 different alpha's, different bets in different markets, and I could 0:12:11.440 --> 0:12:14.400 carry that and put that in a fund called pure Alpha. 0:12:14.520 --> 0:12:17.720 Then I could take different asset classes and put that 0:12:17.800 --> 0:12:20.560 in a fund which was called pure beta. And then 0:12:20.600 --> 0:12:24.480 we could engineer it for the customers risk levels. Do 0:12:24.520 --> 0:12:28.720 you want it at twelve percent volve, volatility eight percent involved? 0:12:29.160 --> 0:12:32.800 And then they would whatever benchmark they wanted we could 0:12:32.840 --> 0:12:36.000 put the alpha on top of, so they could say 0:12:36.040 --> 0:12:40.600 I want the SMP five hundred plus a six percent 0:12:40.679 --> 0:12:43.680 ball operating that way. I know it all sounds complicated, 0:12:43.880 --> 0:12:47.200 but we could design and structure things to their liking 0:12:47.520 --> 0:12:51.080 that would produce an attractive, rich risk in return that 0:12:51.200 --> 0:12:54.520 also was not correlated with their other investments. You wrote 0:12:54.520 --> 0:12:58.079 a book a few years ago called Principles that sold 0:12:58.160 --> 0:13:01.120 millions of copies. Usually books in the business world on 0:13:01.240 --> 0:13:03.440 sell millions of copies, and millions of them were sold 0:13:03.480 --> 0:13:07.400 in China as well. Um, what is it that was 0:13:07.440 --> 0:13:10.240 in that book that was so exciting to people? When 0:13:10.280 --> 0:13:15.600 I would make decisions, I would not just make the decisions. 0:13:15.679 --> 0:13:18.200 I would think about, what are the criteria that I 0:13:18.200 --> 0:13:21.400 would use to make the decisions, and I'd write them down, 0:13:21.720 --> 0:13:25.280 those are the principles. And then in our culture, which 0:13:25.360 --> 0:13:28.040 is this idea of meritocracy, we would say that those 0:13:28.080 --> 0:13:31.320 criteria good or bad, and then we would try to 0:13:31.360 --> 0:13:35.920 put them into algorithms and equations. And so I would 0:13:36.000 --> 0:13:38.720 do that almost like a diary kind of thing, and 0:13:38.760 --> 0:13:41.160 I would see the same things happening over and over again, 0:13:41.160 --> 0:13:43.440 and the next time it happened, I would go to 0:13:43.480 --> 0:13:46.679 the principle, and we could together go to our principles. 0:13:46.920 --> 0:13:49.559 And so it accumulated that over a period of time, 0:13:49.920 --> 0:13:53.880 and they were practical, they're not theoretical principles, and people 0:13:53.920 --> 0:13:55.960 seem to find the valuable. Now it is said that 0:13:56.000 --> 0:13:59.240 you use these principles in your firm, and you operate 0:13:59.280 --> 0:14:01.920 the firm and in the principles right more or less, 0:14:02.200 --> 0:14:06.240 but it's very constant self examination. Employees have to be 0:14:06.320 --> 0:14:10.600 self examined by their peers. You're self examined by your peers, right, 0:14:10.800 --> 0:14:13.839 or other people in the firm. It's hard to get 0:14:13.880 --> 0:14:15.880 people to want to do this and where they be 0:14:15.920 --> 0:14:19.920 examined so intently over the years, and it's so logical, 0:14:19.960 --> 0:14:22.880 But that doesn't mean everybody wants to do it. Um, 0:14:23.040 --> 0:14:27.120 it's um so in one sentence, it's an idea meritocracy. 0:14:27.960 --> 0:14:30.000 You know, the best ideas win out from wherever they 0:14:30.040 --> 0:14:33.120 come from, in which the goals are meaningful work and 0:14:33.240 --> 0:14:39.040 meaningful relationships. That we're in it together through radical truthfulness 0:14:39.040 --> 0:14:43.480 and radical transparency. So if we disagree, that's a good thing. 0:14:43.520 --> 0:14:46.000 It's no reason to have anger and to have the 0:14:46.120 --> 0:14:50.760 art of thoughtful disagreement and examine how do you scientifically 0:14:50.880 --> 0:14:53.080 find out what's true? How do you test things? And 0:14:53.120 --> 0:14:57.200 so on? And that's been essential to our success. So 0:14:57.360 --> 0:14:59.640 you know, you're very intense. You're obviously into the numbers, 0:14:59.680 --> 0:15:03.400 but you're so big into transcendental meditation. Right, Yeah, that's 0:15:03.400 --> 0:15:07.720 helped me a lot. It's been probably the biggest whatever 0:15:07.760 --> 0:15:10.840 success I've had, maybe more attributable to transcendental How did 0:15:10.880 --> 0:15:16.880 you get into transcendental meditation? The Beatles help you or something? Yeah? Yeah, Um, 0:15:17.240 --> 0:15:21.200 it was exactly that. In ninety eight the Beatles went 0:15:21.240 --> 0:15:26.040 to India and they meditated, and then I heard about it. 0:15:26.200 --> 0:15:30.880 And then in nineteen sixty nine in New York you could, Um, 0:15:31.240 --> 0:15:33.040 you can bring some flowers and you could do that 0:15:33.120 --> 0:15:37.920 and you could learn how to meditate, and and wow, um, 0:15:38.040 --> 0:15:40.840 I recommend it's the best thing gift. I could do 0:15:40.840 --> 0:15:44.600 it every day or almost every almost. Yeah, I try 0:15:44.640 --> 0:15:45.840 to do it every day. I try to do it 0:15:45.880 --> 0:15:47.960 about twice a day. And if I could take a 0:15:48.000 --> 0:15:52.840 second to describe it, um um, what it is, um 0:15:53.040 --> 0:15:56.600 is it frees your mind of thought, and it takes 0:15:56.600 --> 0:16:01.440 you from a conscious state into your subconscious, and your 0:16:01.440 --> 0:16:07.040 subconscious is where creativity comes from and equanimity and all 0:16:07.080 --> 0:16:10.080 of that. Like if you're calm and great ideas come 0:16:10.080 --> 0:16:13.200 to you, and when you have that equanimity, then you're 0:16:13.280 --> 0:16:16.080 as you're approaching everything. Things are just the way they 0:16:16.120 --> 0:16:18.400 are and you have to deal with them. And it's 0:16:18.440 --> 0:16:21.640 a little like being you know, in the uh Ninja movies, 0:16:21.680 --> 0:16:24.320 it's a little bit like being the ninja, and everything 0:16:24.360 --> 0:16:27.120 seems slower and you can handle it better. And so 0:16:27.240 --> 0:16:31.000 and you align your subconscious which is where the motions 0:16:31.160 --> 0:16:35.640 and also inspirations come from, with your conscious mind. And 0:16:35.640 --> 0:16:38.120 when they're aligned and you have that equanimity, it's a 0:16:38.160 --> 0:16:41.560 great thing. You're gonna write a book on transitentle meditation. 0:16:42.520 --> 0:16:44.840 Let me ask you this. The average person watching right 0:16:44.840 --> 0:16:47.920 now probably doesn't have a hundred and fifty billion dollars 0:16:47.960 --> 0:16:52.320 to manage the investment of. So what can the average 0:16:52.360 --> 0:16:56.280 person do to invest reasonably? Well, well, you know, um, 0:16:56.520 --> 0:16:59.280 like I didn't have any money, and I remember the 0:16:59.360 --> 0:17:04.520 cycle and what it was is I would start to think, um, 0:17:04.600 --> 0:17:09.200 how much money do I have to how many weeks, 0:17:09.320 --> 0:17:12.520 months and then years can I take care of myself 0:17:12.560 --> 0:17:15.560 and my family? And I would calculate that I would 0:17:15.560 --> 0:17:18.200 be at okay, fifty two years if no income was 0:17:18.240 --> 0:17:22.119 going to come in, And then I would start to think, um, 0:17:22.160 --> 0:17:25.280 and then if I'm holding a portfolio in something, maybe 0:17:25.280 --> 0:17:27.639 I could lose half, so I better cut that number 0:17:27.640 --> 0:17:29.959 in half. And then I start to think of what 0:17:30.040 --> 0:17:32.200 are my uses of the money, what do I need 0:17:32.240 --> 0:17:34.919 to do? And I would think about how do I 0:17:34.600 --> 0:17:38.200 immunize that? And you start and you build like that, 0:17:38.480 --> 0:17:41.760 and you know how to save and and saving you 0:17:41.840 --> 0:17:45.480 know things like don't put it into cash deposits that 0:17:45.640 --> 0:17:48.879 get eroded by inflation and taxes and so on, and 0:17:48.920 --> 0:17:51.040 you start to develop it. And the thing that you 0:17:51.119 --> 0:17:53.800 can do, the most important thing you could do, is 0:17:53.840 --> 0:17:58.240 not be in cash and and those deposits, particularly now 0:17:58.280 --> 0:18:01.399 when there's such negative real rates. And to have a 0:18:01.440 --> 0:18:06.480 well diversified portfolio. And that well diversified portfolio that's a 0:18:06.520 --> 0:18:08.359 whole subject of what does that mean and how to 0:18:08.400 --> 0:18:12.360 do it, But it's a well diversified portfolio of not 0:18:12.480 --> 0:18:19.040 just asset classes, but of uh countries, of um uh 0:18:19.240 --> 0:18:22.600 you know, of of different thing currencies, diversified. But let's 0:18:22.640 --> 0:18:26.119 let me ask you an average person who isn't you know, 0:18:26.280 --> 0:18:29.480 a billionaire. Should they expect to get a great return 0:18:29.560 --> 0:18:31.520 over on their money of five percent a year? Is 0:18:31.520 --> 0:18:34.240 that a good target? Six eight percent? What do you 0:18:34.240 --> 0:18:36.560 think is a reasonable target for somebody doesn't want to 0:18:36.560 --> 0:18:42.200 take undue risks? Well, nowadays the structure of the markets 0:18:42.200 --> 0:18:46.760 and where everything is priced um if um and done 0:18:46.840 --> 0:18:50.119 the normal way, we'll give you probably a return in 0:18:50.200 --> 0:18:55.280 the vicinity of with a lot of risk around it. Uh, 0:18:55.480 --> 0:18:59.720 maybe in the vicinity of four percent three three and 0:19:00.119 --> 0:19:05.280 three percent three four, Okay, something that might not equal inflation, 0:19:05.480 --> 0:19:07.560 probably would be very close. And then you have to 0:19:07.560 --> 0:19:11.200 pay taxes on it um because there are so many 0:19:11.240 --> 0:19:14.760 financial assets. But one thing you can, they'll send you 0:19:14.800 --> 0:19:18.480 more money. As we talk today, the stock market in 0:19:18.520 --> 0:19:20.800 the last couple of weeks has been correcting, if that's 0:19:20.800 --> 0:19:23.880 the right verb, and a lot of the errors out 0:19:23.880 --> 0:19:26.919 of the so called bubble. Should people be selling everything 0:19:27.000 --> 0:19:28.879 and getting out of the market now because the markets 0:19:28.920 --> 0:19:30.400 are going down? Or is just the time to buy? 0:19:31.600 --> 0:19:33.960 First of all, I'm not here to give a lot 0:19:34.000 --> 0:19:36.520 of advice, but I'll give you the following thoughts. We 0:19:36.600 --> 0:19:39.919 won't tell anybody, just give us, okay, just just on 0:19:39.960 --> 0:19:44.040 our own. Uh. What's happened is the they produced a 0:19:44.080 --> 0:19:45.879 lot of debt and gave out a lot of money, 0:19:45.920 --> 0:19:48.399 and so everybody's got money. And it's also very easy 0:19:48.480 --> 0:19:51.600 to borrow money to buy things. And as a result, 0:19:51.600 --> 0:19:54.760 if you create much more buying power, then you create 0:19:54.880 --> 0:19:57.840 goods and services. You've got a lot much more inflation. 0:19:58.440 --> 0:20:01.600 And the Federal Reserve has been behind the curve slower 0:20:01.680 --> 0:20:05.640 to tighten monetary policy, and as a result, we're now 0:20:05.680 --> 0:20:09.359 starting to see the rise in interest rates to be 0:20:09.600 --> 0:20:13.440 able to deal with that. As that happens, all assets 0:20:13.480 --> 0:20:17.040 compete with each other. So now that free money is 0:20:17.040 --> 0:20:19.679 still going to be cheap money, but it's going to 0:20:19.760 --> 0:20:23.160 be a bit higher, so interest rates. Let's say bond 0:20:23.240 --> 0:20:27.040 yields have gone up about one percent. Now you take 0:20:27.119 --> 0:20:30.520 that and you adjust everything is the present value of 0:20:30.560 --> 0:20:33.720 future cash flows. But it means that that interest rate 0:20:33.760 --> 0:20:36.520 goes up a percent. That means all the other assets 0:20:36.600 --> 0:20:39.640 have to adjust. We're in a process of making that 0:20:39.720 --> 0:20:43.159 kind of adjustment. That means the days that we've had before, 0:20:43.280 --> 0:20:45.359 the easy days where they not money on you and 0:20:45.400 --> 0:20:48.360 you don't have much inflation and you don't have much tightness, 0:20:48.720 --> 0:20:51.600 those are past and now we're in a different kind 0:20:51.640 --> 0:20:54.480 of part of the cycle. How do you foresee crypto 0:20:54.760 --> 0:20:59.240 impacting the world order? Uh? I think it's interesting. I 0:20:59.280 --> 0:21:03.200 have a tiny percentage of my portfolio wanted to to diversify. 0:21:03.240 --> 0:21:06.720 But it is a very vulnerable incident because they can 0:21:06.840 --> 0:21:09.280 track who is operating on it. It can be tracked. 0:21:09.480 --> 0:21:13.000 It will be outlawed, probably by different governments, and in 0:21:13.080 --> 0:21:15.960 terms of its size, it has issues. So I think 0:21:16.000 --> 0:21:21.159 too much attention is spent spent on um crypto or 0:21:21.240 --> 0:21:23.840 somebody might be a gold bug, or somebody might be 0:21:24.000 --> 0:21:26.360 I don't know they hold gems or whatever they do. 0:21:26.560 --> 0:21:29.320 But I think that we're now in an era where 0:21:29.359 --> 0:21:32.320 we're going to have different types of money. We're going 0:21:32.359 --> 0:21:35.280 to question money is a medium of exchange, but it's 0:21:35.320 --> 0:21:37.560 also a store hold of wealth, and we're going to 0:21:37.600 --> 0:21:41.439 be questioning what are the right store holds of wealth 0:21:41.640 --> 0:21:43.960 in in the value And you're going to see around 0:21:43.960 --> 0:21:47.280 the world, not only the digital versions of that take 0:21:47.320 --> 0:21:50.680 place in many forms. You're going to see other forms 0:21:50.720 --> 0:21:53.520 of that competition. I think in the year's at we 0:21:53.600 --> 0:21:58.040 are not investing, and you're not transcendental meditating, and you're 0:21:58.080 --> 0:22:01.480 not writing books and doing philanthropy. What are you doing? 0:22:01.480 --> 0:22:05.399 You have any Outsidember Number one is my grandkids? Okay, 0:22:05.520 --> 0:22:08.880 my my kids, my my family of course, um and 0:22:09.520 --> 0:22:12.959 one of the greatest blessings in life that whenever can 0:22:13.040 --> 0:22:15.880 possibly have his one. How many grandchildren you have? I have? Ford? Now, 0:22:16.000 --> 0:22:19.359 what do they call you? Papa? Not Mr Dahlia or 0:22:19.400 --> 0:22:24.399 something like that. Thanks for listening to hear more of 0:22:24.400 --> 0:22:28.960 my interviews. You can subscribe and download my podcast on Spotify, Apple, 0:22:29.200 --> 0:22:30.119 or wherever you listen