WEBVTT - Ray Dalio 0:00:01.040 --> 0:00:03.960 Ray Dalio is the founder of the world's biggest hedge 0:00:04.000 --> 0:00:09.240 fund firm, Bridgewater Associates, which manages one hundred sixty billion dollars. 0:00:09.480 --> 0:00:12.920 Dalio has joined Warren Buffett and Bill Gates Pledge, promising 0:00:12.960 --> 0:00:15.520 to give more than half of his fortune to charitable 0:00:15.560 --> 0:00:20.360 foundations within his lifetime. Through his Daio Foundation, he's directed 0:00:20.400 --> 0:00:23.560 millions of dollars in donations to the David Lynch Foundation, 0:00:23.840 --> 0:00:28.720 and organization that sponsors and promotes research on transcendental meditation. 0:00:29.120 --> 0:00:32.760 Also working to make sure Bridgewater survives him. Dhaio moved 0:00:32.800 --> 0:00:36.320 in twenty eighteen to turn Bridgewater into a partnership and 0:00:36.400 --> 0:00:39.879 give employees more of a stake in the firm. Daio 0:00:39.960 --> 0:00:42.879 sat down with David Rubinstein, co founder of the Carlisle 0:00:42.920 --> 0:00:45.400 Group and host of the Bloomberg television show Peer to 0:00:45.479 --> 0:00:49.680 Peer Conversations. They discussed what he looks for in an employee, 0:00:49.920 --> 0:00:53.320 how he's preparing for a possible recession, and whether or 0:00:53.320 --> 0:00:56.200 not he'd ever take a job in government. You are 0:00:56.560 --> 0:00:58.920 seen as somebody who has said it might be a 0:00:59.040 --> 0:01:01.600 chance of a recession at some point. Do you see 0:01:01.600 --> 0:01:04.000 any chance of a recession in two thousand nine or 0:01:04.040 --> 0:01:08.920 two I'm big on principles, right, so I think that 0:01:09.000 --> 0:01:13.319 it's important to understand how the economic machine works. And 0:01:13.400 --> 0:01:16.199 so when I'm looking at that, I want to maybe 0:01:16.280 --> 0:01:20.639 take a few minutes and get into the important things 0:01:20.720 --> 0:01:25.600 that are pertained to a recession. Because a recession, you know, 0:01:26.120 --> 0:01:30.560 whether you it's two negative quarters of GDP and we're 0:01:30.560 --> 0:01:35.039 going to be hovering I think fairly close to that level, 0:01:35.400 --> 0:01:38.000 and there's a certain variation around it. But the bigger 0:01:38.120 --> 0:01:44.360 things are a combination of the absence of effectiveness of 0:01:44.680 --> 0:01:47.640 central bank policies. So I hope we can talk about 0:01:47.680 --> 0:01:52.240 those together with the wealth gap, the large wealth gap. 0:01:52.440 --> 0:01:55.160 So when the next downturn comes, what that will look 0:01:55.240 --> 0:02:01.200 like socially, politically and so on. UM the elections, which 0:02:01.320 --> 0:02:07.640 is a issue between um let's say capitalists and socialists 0:02:07.760 --> 0:02:11.079 or the rich and the poor. And then the emergence 0:02:11.440 --> 0:02:16.280 of China UM and in relationship to the United States. 0:02:16.320 --> 0:02:21.360 Those four factors are factors that have not existed since 0:02:21.400 --> 0:02:24.840 the thirties. I think they're unique, and so when we 0:02:24.919 --> 0:02:28.359 get into the question of the recession, I think it's 0:02:28.480 --> 0:02:32.600 how that will affect those other things, and those things 0:02:32.600 --> 0:02:35.720 affected in the investment world, your firm was quite known, 0:02:36.000 --> 0:02:39.280 well known for quite some time before the last recession. 0:02:39.280 --> 0:02:41.720 It was a very successful firm before. But in the 0:02:41.800 --> 0:02:45.640 last recession, your firm performed extremely well, maybe better than 0:02:45.680 --> 0:02:48.640 any of any other major hedge fund. So as I 0:02:48.720 --> 0:02:54.280 recall your up or something like that during the worst year, So, um, 0:02:54.440 --> 0:02:58.040 are you anticipating a recession now and are you changing 0:02:58.040 --> 0:03:01.160 your investment approaches or your not quite where you were 0:03:01.360 --> 0:03:05.720 in two thousand seven. In two thousand seven, it was 0:03:06.880 --> 0:03:10.280 pretty easy, I think, to calculate that these debts that 0:03:10.360 --> 0:03:13.480 we're going to come do and that the there was 0:03:13.520 --> 0:03:17.080 not an adequate amount of funding, and so that sort 0:03:17.120 --> 0:03:20.840 of debt crisis was something we anticipated and we were 0:03:20.880 --> 0:03:24.480 positioned well for. When I go through those calculations, it's 0:03:24.520 --> 0:03:27.440 not the same. In other words, the amount of maturing 0:03:27.520 --> 0:03:31.240 debt and that whole problem doesn't look the same. It 0:03:31.280 --> 0:03:34.520 looks more like a gradual squeeze having to do with 0:03:35.920 --> 0:03:38.720 quite a lot of debt of a certain type. But 0:03:38.960 --> 0:03:47.040 with that um also pension liabilities and healthcare particularly as 0:03:47.120 --> 0:03:51.080 that produces a greater squeeze. We have large deficits and 0:03:51.120 --> 0:03:54.280 so on. So so the amount of promises that we 0:03:54.360 --> 0:03:57.200 have are large, but they're going to be coming at 0:03:57.280 --> 0:04:00.600 us at a more gradual pace, and I that's going 0:04:00.680 --> 0:04:04.520 to produce a squeeze. I think related to that, what's 0:04:04.560 --> 0:04:09.760 important is that when you don't have monetary policy being 0:04:09.800 --> 0:04:13.840 able to be effective, um what kind of monetary policy 0:04:13.920 --> 0:04:17.240 we will have, we will have more than likely a 0:04:17.360 --> 0:04:21.479 lot of debt monetization. On fiscal policy, there's no room 0:04:21.520 --> 0:04:23.760 for additional tax cuts, you agree, because we already have 0:04:23.800 --> 0:04:26.600 such a big deficit, so you couldn't really cut taxes 0:04:26.680 --> 0:04:29.400 any anymore. Or do you not agree with that? I 0:04:29.440 --> 0:04:33.720 believe that in terms of spending that probably there will 0:04:33.760 --> 0:04:37.960 be increases in spending that probably will not be well funded. 0:04:38.240 --> 0:04:40.040 And when you ask about that, I think we have 0:04:40.120 --> 0:04:43.760 a political question, and that's which is relevant to also 0:04:43.800 --> 0:04:48.560 the markets. Between now and the elections, we're probably going 0:04:48.640 --> 0:04:52.560 to have very different policies, but policies maybe more of 0:04:52.600 --> 0:04:56.240 the left and policies more of the right, more extreme policies, 0:04:56.279 --> 0:04:59.440 greater polarity, and the choice will be greater. And how 0:04:59.480 --> 0:05:01.599 those choice as are made are is going to be 0:05:01.680 --> 0:05:04.560 very important to not only the size of the deficits, 0:05:04.600 --> 0:05:08.120 but the nature of taxation. So I think that I 0:05:08.160 --> 0:05:12.599 think that UM. When I'm looking at the presidential candidates, 0:05:12.920 --> 0:05:15.240 what I do is I look at what their policies 0:05:15.279 --> 0:05:18.760 are stated policies in terms of UM, any of their 0:05:18.839 --> 0:05:22.120 various policies, and I look at that as a probabilistic basis. 0:05:22.560 --> 0:05:25.320 So I think when we have to answer that, we 0:05:25.400 --> 0:05:30.920 can't um um. You you like, after the election, you 0:05:31.000 --> 0:05:36.600 might get taxes raised by UM on the wealthy or 0:05:36.839 --> 0:05:41.320 you have corporations, you can reverse those tax those tax policies, 0:05:41.640 --> 0:05:44.160 and you're probably going to get an increase in spending. 0:05:44.520 --> 0:05:46.719 All right, let's talk for a moment about how you 0:05:46.839 --> 0:05:49.720 came to be, Let's say, one of the most respected 0:05:49.839 --> 0:05:54.400 commentators on economic and financial policy, which is starting your firm. 0:05:54.480 --> 0:05:58.320 So you grew up in Long Island and where you 0:05:58.360 --> 0:06:01.719 from a wealthy family? No, my dad was a jazz musician, 0:06:01.880 --> 0:06:04.840 very lower middle class fan. When you were a young boy, 0:06:04.960 --> 0:06:07.160 were you interested in the financial world or what were 0:06:07.160 --> 0:06:09.200 you most interested in with growing up on Long Island. 0:06:09.440 --> 0:06:11.440 I got hooked on the markets when I was twelve 0:06:11.600 --> 0:06:14.560 because I used to caddy and I would take my 0:06:14.640 --> 0:06:17.040 money and I put in the markets and everybody was 0:06:17.120 --> 0:06:21.640 chatting about the markets. So, UM, how did you do well. 0:06:21.680 --> 0:06:25.039 The first stock I bought, I bought because it was 0:06:25.080 --> 0:06:27.000 the only company I ever heard of that was selling 0:06:27.040 --> 0:06:30.480 for less than five dollars a year, and I figured 0:06:30.520 --> 0:06:32.440 I could buy more shares, so if what up, I'd 0:06:32.480 --> 0:06:36.240 make more money. That was my strategy work and it worked, 0:06:37.320 --> 0:06:40.440 and it worked because this company was about to go 0:06:40.520 --> 0:06:44.159 broke and somebody came along and acquired it, and it 0:06:44.279 --> 0:06:47.080 by luckily, Um, it went up. And I said, this 0:06:47.120 --> 0:06:51.120 game is easy, and I m then decided that I 0:06:51.120 --> 0:06:53.160 would be involved in the markets. And this game is 0:06:53.200 --> 0:06:56.240 anything but easy. So in high school, were you interested 0:06:56.279 --> 0:06:58.680 in academics or were you a good student? No? I 0:06:58.720 --> 0:07:01.919 hated high school. Did you go to high school you 0:07:01.960 --> 0:07:04.960 cut classes? Or what did you do? I did cut 0:07:05.000 --> 0:07:07.880 classes a fair amount and cut classes to go surfing. 0:07:08.080 --> 0:07:09.720 Did you have a hard time getting into a good 0:07:09.720 --> 0:07:12.320 school in college? Yeah? I got into c W Post 0:07:12.320 --> 0:07:17.320 College on probation, probation on probation, okay, and but you 0:07:17.400 --> 0:07:21.480 did well there. I loved college. Okay. I love college 0:07:21.520 --> 0:07:25.920 because well, uh, besides mixing all the fun that college 0:07:25.920 --> 0:07:28.640 gives you, it also, um, what I liked is that 0:07:28.720 --> 0:07:30.800 I could pick the subjects that I was interested in 0:07:31.280 --> 0:07:34.280 and I so I loved college. Right, you must have 0:07:34.320 --> 0:07:36.760 done recent well because you got into Harvard Business School. Yeah, 0:07:36.800 --> 0:07:40.600 I did. I got great grades when you graduated. What 0:07:40.600 --> 0:07:43.000 did you do? So in my two years? It's a 0:07:43.000 --> 0:07:46.000 two year school. Um and in my summer I like 0:07:46.120 --> 0:07:48.800 to trade commodities. I got into trade and commodities. Now 0:07:48.840 --> 0:07:52.720 this is now, uh, the summer of seventy two and 0:07:52.920 --> 0:07:56.840 um so nobody ever for more of a business school 0:07:56.840 --> 0:07:59.680 went into commodity division. But I went to Merrill Lynches 0:08:00.000 --> 0:08:02.320 hodity division. I said, hey, can you give me a job? 0:08:02.640 --> 0:08:05.360 The director of commodities in that summer gave me a 0:08:05.440 --> 0:08:09.840 job to help him. Around three, we have the oil shock. 0:08:11.320 --> 0:08:14.600 Bear market in stocks. Commodities is the hottest thing. And 0:08:14.600 --> 0:08:18.520 I was hired as director of commodities at Dominic and Dominic, 0:08:18.720 --> 0:08:21.920 having never done anything in the director of commodities, but 0:08:21.960 --> 0:08:24.960 I was hired. And that's so that's what I So 0:08:25.000 --> 0:08:27.960 you left that eventually though, to set up your own firm. 0:08:28.040 --> 0:08:33.360 Yeah so I. Uh that was seventy seventy four, big 0:08:33.360 --> 0:08:38.079 bear market in stocks. Uh, Dominic and Dominic essentially went broke. 0:08:38.200 --> 0:08:41.320 I went to, uh, what was Sandy Walls firm? Cbd 0:08:41.400 --> 0:08:44.520 L E. L. Hayden Stone at the time became Shearson 0:08:44.559 --> 0:08:47.319 Hayden Stone Lean blah blah blah. Because it did all 0:08:47.320 --> 0:08:51.560 those mergers, I became in charge of institutional commodities, in 0:08:51.559 --> 0:08:54.320 other words, hedging of all different things, and that put 0:08:54.360 --> 0:08:59.160 me with all different futures markets. And then we got 0:08:59.280 --> 0:09:05.400 into the environment where um seventy four you got into 0:09:05.520 --> 0:09:10.560 this environment where interest rates, tightness of monetary policy, all 0:09:10.600 --> 0:09:13.200 of those things were driving all the markets. So that 0:09:13.280 --> 0:09:17.120 got me hooked on those markets. Anyway, I got fired 0:09:17.120 --> 0:09:20.240 from there because I was a bit rowdy. Did you 0:09:20.280 --> 0:09:22.760 punch somebody? Did you punch your boss in the face? 0:09:22.840 --> 0:09:24.480 Or yes, I punched my bost in the face. That's 0:09:24.520 --> 0:09:27.000 not a good way to print that was, but that was. 0:09:28.480 --> 0:09:31.040 It was New Year's Eve. We got drunk on New 0:09:31.120 --> 0:09:34.840 Year's Eve and somebody other than your boss. You didn't 0:09:34.840 --> 0:09:40.280 think of that anyway, But it didn't. It didn't last long. 0:09:41.840 --> 0:09:44.120 And that's how I started the firm because I was 0:09:44.960 --> 0:09:47.199 because the clients still wanted to do business. The year 0:09:47.280 --> 0:09:50.280 was that and you started the firm. So it grew 0:09:50.320 --> 0:09:53.280 true from one or two employees to how many. Well, 0:09:53.559 --> 0:09:57.760 in nineteen two it was I think there were eight 0:09:57.800 --> 0:10:02.680 employees and at one point and then I had a 0:10:02.920 --> 0:10:06.600 terrible eighty two so UM, and then it came down 0:10:06.600 --> 0:10:09.240 to one employee. So nineteen eighty three or so, it 0:10:09.320 --> 0:10:12.320 was just me, you have to borrow money from your father. Yeah, 0:10:12.360 --> 0:10:14.920 so let me tell you about the moment um. So 0:10:15.080 --> 0:10:21.760 nineteen eight, nineteen seventy nine, eight eight one. I calculated 0:10:21.760 --> 0:10:23.920 the American banks had lent a lot more money to 0:10:24.200 --> 0:10:26.920 emerging countries than those countries are going to get paid back. 0:10:27.320 --> 0:10:30.480 And I anticipated that there would be a debt crisis 0:10:30.880 --> 0:10:35.440 and with that an economic crisis. So that was my thinking. UM. 0:10:35.559 --> 0:10:39.320 In August nine eighty to Mexico defaulted on its debt 0:10:40.120 --> 0:10:43.520 and a number of countries followed. And so because I 0:10:43.559 --> 0:10:46.400 said that, UM, I got a lot of attention about that, 0:10:46.480 --> 0:10:49.200 and I thought that was going to be producing a 0:10:49.240 --> 0:10:51.760 bear market in stocks. And I could not have been 0:10:51.760 --> 0:10:55.240 wrong more wrong. August nine eighty two was the exact 0:10:55.240 --> 0:10:58.200 bottom of the stock market. And I was wrong. And 0:10:58.280 --> 0:11:02.679 as a result of that, UM, let's take my employees 0:11:02.800 --> 0:11:05.959 or UM, I had to let them go. I lost 0:11:05.960 --> 0:11:08.720 money for myself, I lost money for and I had 0:11:08.720 --> 0:11:11.120 to borrow four thousand dollars for my dad. It was 0:11:11.160 --> 0:11:13.680 the most painful, one of the most painful experiences, but 0:11:13.760 --> 0:11:16.800 it was one of the best experiences that ever happened 0:11:16.800 --> 0:11:21.120 to me in my life because it changed my perspective 0:11:21.120 --> 0:11:24.960 about decision making. It made um. It may gave me 0:11:25.120 --> 0:11:28.760 the humility that I needed and fear of being wrong 0:11:28.880 --> 0:11:32.440 in my decisions, while I was able to maintain my aggressiveness. 0:11:32.440 --> 0:11:35.720 So it changed my whole approach to decision making. You 0:11:35.800 --> 0:11:39.160 paid your father back with equity in Bridgewater or just 0:11:39.920 --> 0:11:44.319 interest now with without interest and with a big hug. Okay, 0:11:45.200 --> 0:11:48.560 so um. From that time on, you began to rely 0:11:48.640 --> 0:11:51.960 a lot more on arithmetic or algorithms and other kinds 0:11:51.960 --> 0:11:54.520 of things. No, no, no no. The big thing was, and 0:11:54.840 --> 0:11:57.360 this is like the biggest message that I think that 0:11:57.400 --> 0:11:59.640 I would get across that I'm trying to convey in 0:11:59.640 --> 0:12:04.880 printce of and so on, UM, is that so many 0:12:05.000 --> 0:12:09.960 people in there have opinions in their heads that might 0:12:10.000 --> 0:12:14.400 be wrong, and they're too attached to them. And if 0:12:14.559 --> 0:12:19.160 you know how to um operate with a certain amount 0:12:19.200 --> 0:12:22.560 of uncertainty and stress test your opinions in a different way, 0:12:23.120 --> 0:12:25.920 you get away from your ego, get away from all that, 0:12:27.080 --> 0:12:30.719 you can learn a lot about raising your probablies and 0:12:30.800 --> 0:12:33.480 being right. So what it made me want to do 0:12:33.520 --> 0:12:36.559 is find the smartest people I could find who disagreed 0:12:36.600 --> 0:12:40.520 with me, and then I could have conversations with them. 0:12:40.600 --> 0:12:43.720 Um and only after I found the smartest people that 0:12:43.880 --> 0:12:46.600 I could find who disagreed with me, would I be 0:12:46.720 --> 0:12:50.120 able to make a decision. In addition to know how 0:12:50.160 --> 0:12:54.120 to improve my return to risk ratio by being able 0:12:54.160 --> 0:12:58.080 to diversify well to create. And so I wanted all 0:12:58.120 --> 0:13:01.679 the upside, but I wanted be able to control the downside. 0:13:01.800 --> 0:13:04.840 And so I would say a number of lessons that 0:13:04.880 --> 0:13:07.240 I'd like to, you know, sort of pass along. First 0:13:07.240 --> 0:13:09.680 of all, the value of mistakes, the value of painful 0:13:09.720 --> 0:13:13.280 mistakes and learning and reflecting on them has been a big, 0:13:13.320 --> 0:13:16.839 big thing. Finding the smartest people who could work with you. 0:13:17.559 --> 0:13:21.360 That's what created an idea meritocracy at Bridgewater. And it's 0:13:21.440 --> 0:13:24.920 that back and forth in terms of the thoughtful disagreement 0:13:25.480 --> 0:13:28.440 and then also raising your probabilities of being right in 0:13:28.440 --> 0:13:31.520 those ways. So that's humility, that fear of being wrong, 0:13:31.920 --> 0:13:34.760 combined with still the audacity to go for the great 0:13:34.800 --> 0:13:37.400 results and how to do that well is really the 0:13:37.440 --> 0:13:39.480 most important thing I learned. But you now use a 0:13:39.520 --> 0:13:43.360 lot of computer related algorithms to help you navigate the market. 0:13:43.920 --> 0:13:46.439 You know, algorithms, or what we call them today, equations 0:13:46.480 --> 0:13:48.720 is what we used to call and so you would 0:13:48.720 --> 0:13:52.040 write that down. And what I learned is by being 0:13:52.120 --> 0:13:55.040 clear that I could tell how that decision would have 0:13:55.040 --> 0:13:57.959 worked in the past in all different environments. So it 0:13:58.000 --> 0:14:00.559 gave me a lot of perspective on making that decision. 0:14:00.840 --> 0:14:03.040 I could test it through the Great Depression and so on, 0:14:03.440 --> 0:14:07.839 and then I could find that I used that same algorithm, 0:14:07.880 --> 0:14:11.480 I could take data from and have the computer make 0:14:11.559 --> 0:14:14.800 decisions in parallel with me, and so, and that does 0:14:14.840 --> 0:14:17.120 what I recommend for everybody. I recommend they write down 0:14:17.120 --> 0:14:20.720 their principles and then realize that almost any of those 0:14:20.760 --> 0:14:25.040 principles can then be converted into algorithms. And so the 0:14:25.080 --> 0:14:29.080 computer was making decisions in parallel with me making decisions. 0:14:29.280 --> 0:14:33.040 That type of partnership between me and the computer and 0:14:33.040 --> 0:14:36.680 not also expressing the algorithms was invaluable not only in 0:14:36.680 --> 0:14:39.320 the quality of the decision making, but also the quality 0:14:39.360 --> 0:14:41.680 of the relationships that I had with people I worked with. 0:14:42.160 --> 0:14:44.720 Bridgewater would not be said to be an easy place 0:14:44.760 --> 0:14:47.640 to work, or is that fair or not? Because that's 0:14:47.680 --> 0:14:51.160 fair because many people common this is a very intense environment, 0:14:51.160 --> 0:14:53.360 and some of them don't survive. Those that do, presumably 0:14:53.360 --> 0:14:57.000 are are adopting your principles. But are you love it 0:14:57.080 --> 0:15:01.560 or hated? Um, you have a big attrition rate from 0:15:01.680 --> 0:15:03.640 young people coming in or I would say in the 0:15:03.680 --> 0:15:08.320 first eighteen months probably about we have protocols and you 0:15:08.400 --> 0:15:12.480 have to understand your weaknesses as well as your strengths. 0:15:12.840 --> 0:15:16.560 And so people coming to that are almost of two types. 0:15:16.960 --> 0:15:19.760 There are the people who say, um, well they I 0:15:19.800 --> 0:15:23.480 suppose almost all come that. I'm excited about that. And 0:15:23.480 --> 0:15:26.400 they're excited about that because they said, yes, I would 0:15:26.480 --> 0:15:29.080 like to know my weaknesses as well as my strengths, 0:15:29.480 --> 0:15:31.800 and I would like to be able to talk about 0:15:31.840 --> 0:15:36.680 anything and have it thrashed out. And uh, that's who 0:15:36.720 --> 0:15:40.320 it works for. But it takes getting used to because 0:15:40.520 --> 0:15:45.640 when you're really talking about the strengths, weaknesses and differences 0:15:45.680 --> 0:15:49.640 and ideas. Our brains have been programmed in a certain way, 0:15:49.920 --> 0:15:54.080 partially because of genetics and partially because of our environments, 0:15:54.120 --> 0:15:59.800 in which disagreement is thought of as producing a fighting 0:16:00.040 --> 0:16:03.760 up a reaction or weaknesses are something that becomes a 0:16:03.840 --> 0:16:06.360 challenge for people to look at. So that's the essence 0:16:06.360 --> 0:16:09.480 of what I suppose. I'm a young college graduate and 0:16:09.520 --> 0:16:12.480 I want to go to Bridgewater and make money and learn. 0:16:13.200 --> 0:16:15.600 What would be the qualities that you would look for 0:16:15.680 --> 0:16:18.520 in me to make it likely that I would succeed? 0:16:18.720 --> 0:16:20.440 Do you want somebody as a first in his class 0:16:20.520 --> 0:16:23.120 or her class? You want somebody that's a student, body, president, 0:16:23.160 --> 0:16:25.920 an athlete? What is it that you look for When 0:16:25.960 --> 0:16:28.320 I look at people, I look at them in uh 0:16:28.560 --> 0:16:35.280 three dimensions of a person, values, abilities, and skills um. 0:16:35.520 --> 0:16:39.360 Most companies higher for skills UM. I believe it should 0:16:39.360 --> 0:16:42.080 be the other way around. I look at their values. 0:16:43.400 --> 0:16:46.520 Values means like, what are the motivations? What are the missions? 0:16:46.720 --> 0:16:50.280 So and it skills is least important. Then you look 0:16:50.280 --> 0:16:53.200 at abilities and abilities is the way of thinking? Is 0:16:53.200 --> 0:16:55.880 somebody a big picture thinker or somebody creative? And I 0:16:55.920 --> 0:16:58.160 want to put together a mix of those right people? 0:16:58.600 --> 0:17:03.160 And then skills? Can you program? Do you know those things? 0:17:03.520 --> 0:17:06.960 That's important, but it's least important. So what I look 0:17:07.040 --> 0:17:13.240 for is really character characters number one um uh and 0:17:13.520 --> 0:17:16.560 UM to be on a mission and then it applies 0:17:16.600 --> 0:17:19.399 to the particular job they have. So when I'm referring 0:17:19.440 --> 0:17:21.960 to values, I'm referring to is this a person of 0:17:22.000 --> 0:17:25.800 good character? Number? One? Now, over your let's say thirty 0:17:25.880 --> 0:17:28.600 years as an investor at Bridgewater, what is your track? 0:17:28.640 --> 0:17:32.000 Every year you've made money virtually for your investors? Well 0:17:32.040 --> 0:17:35.399 at eighteen and the late last eighteen years? Eighteen have 0:17:35.440 --> 0:17:39.880 the last eighteen Yes, that's not too bad. Um about uh, 0:17:40.119 --> 0:17:44.320 is it too late to invest with you? Or who 0:17:44.320 --> 0:17:46.720 can invest with you? Anybody? And any credit investor you're 0:17:46.720 --> 0:17:50.720 not taking are are? We're closed to new investments in 0:17:50.920 --> 0:17:53.840 that pure alpha strategy? And our clients are all institute 0:17:53.920 --> 0:17:56.919 large institutions. And you have two basic strategies that you 0:17:57.960 --> 0:18:00.800 provide investors. That's right, and I think that will be 0:18:00.800 --> 0:18:04.200 helpful for people to understand the nature of that. There 0:18:04.280 --> 0:18:07.480 is a strategic asset allocation. Next, what is your best 0:18:07.520 --> 0:18:11.159 diverse by portfolio? If you had no idea what was 0:18:11.160 --> 0:18:15.000 going to happen, what would you hold. That's what we 0:18:15.119 --> 0:18:20.600 call our all weather strategy strategy. It's a portfolio of assets. Um. 0:18:20.680 --> 0:18:23.320 And then we have what we call our pure alpha strategy. 0:18:23.600 --> 0:18:30.080 Because there's a separation between alpha and beta. So most 0:18:30.119 --> 0:18:34.800 investors make the mistake of separating those two and think 0:18:34.880 --> 0:18:36.639 that they're going to make money in the market, and 0:18:36.840 --> 0:18:39.840 in the zero sum game, they're probably going to lose 0:18:39.880 --> 0:18:44.080 money from making those bets. So there's the strategic asset 0:18:44.119 --> 0:18:47.800 allocation mix, which is the all weather beta piece, and 0:18:47.840 --> 0:18:50.560 then there's the alpha. In other words, Okay, now I 0:18:50.560 --> 0:18:52.920 think it's a good time to move this way that way, 0:18:52.920 --> 0:18:56.040 and that's the alpha stress. Um, it's too too late 0:18:56.080 --> 0:18:58.080 for friends and family to get into your fund right, 0:18:58.960 --> 0:19:02.600 there's no opening, not gonna open any anytime soon. Okay. 0:19:03.119 --> 0:19:06.639 So important part of your life has been transcendental meditation. 0:19:07.280 --> 0:19:09.760 You do this twice a day. When did you start 0:19:09.920 --> 0:19:12.600 and why is it so important to you? Um? I 0:19:12.760 --> 0:19:18.640 started in nineteen sixty nine or so. I've started because 0:19:18.680 --> 0:19:22.160 the Beatles, uh did it and then and I learned 0:19:22.200 --> 0:19:25.640 about it and I thought it was but I it's Uh, 0:19:25.720 --> 0:19:29.920 it's a it's a very important thing. I would say. Um, 0:19:31.920 --> 0:19:34.360 it's the greatest gift that I think I can give anyone. 0:19:35.000 --> 0:19:40.399 It gives a combination of an equanimity, uh, the you know, 0:19:40.440 --> 0:19:43.240 a calmness, so no matter what's coming at you. You 0:19:43.280 --> 0:19:46.520 can approach it with that sort of calmness. It gives 0:19:46.600 --> 0:19:49.720 one a creativity because it is a process of going 0:19:50.080 --> 0:19:53.359 transcending is a process of going into your subconscious mind 0:19:53.760 --> 0:19:58.359 and relaxing. So it's UM, it's been very helpful. So 0:19:58.400 --> 0:20:00.280 now you are one of the wealthiest up in the 0:20:00.359 --> 0:20:02.800 United States, one of the most successful investors. So you 0:20:02.920 --> 0:20:04.840 now have a fair amount of wealth to give away, 0:20:04.840 --> 0:20:06.919 and you were one of the original signers of the 0:20:06.960 --> 0:20:10.280 Giving Pledge. What are the philanthropic interests that are most 0:20:10.320 --> 0:20:14.440 appealing to you. My interests are I guess I would 0:20:14.440 --> 0:20:18.640 say two big interests. I'm really thrilled about ocean exploration. 0:20:18.760 --> 0:20:21.000 This is something that's a big deal for me. But 0:20:21.119 --> 0:20:24.880 we we have donate to many different things. UM. And 0:20:24.920 --> 0:20:28.720 then important things for my wife and for me has 0:20:28.760 --> 0:20:33.040 to do with the education of what are called disengaged 0:20:33.040 --> 0:20:37.840 and disconnected UH students, those who would not get through 0:20:37.960 --> 0:20:40.520 high school. So when you have the kind of platform, 0:20:40.560 --> 0:20:43.880 you now have a virtue of your success as an investor. UM. 0:20:43.920 --> 0:20:45.720 Do you find it easier to meet with heads of 0:20:45.760 --> 0:20:49.840 state finance ministers, heads of countries and do you find 0:20:49.840 --> 0:20:52.040 that to be appealing to do that? And give them 0:20:52.080 --> 0:20:56.240 your views on these subjects. We find it mutually appealing. Yes, 0:20:56.320 --> 0:21:02.280 I um, uh I that you know, from my point 0:21:02.280 --> 0:21:04.280 of view, I'm very interested in the subject matter. But 0:21:04.320 --> 0:21:08.440 I'm also interested in being able to UM have an impact, 0:21:08.560 --> 0:21:13.560 being able to help and so sometimes in policies, UM 0:21:13.600 --> 0:21:17.680 it's had a big, big effect. And like EACB policy 0:21:17.760 --> 0:21:20.560 or other policies. So if a if somebody came to 0:21:20.600 --> 0:21:22.119 you and said I'd like you to be the chairman 0:21:22.119 --> 0:21:24.080 of the Fed or the secretary of the treasury, would 0:21:24.080 --> 0:21:26.000 you ever go into government? Or that's not for you, 0:21:26.200 --> 0:21:28.439 that's not for me. Today, the greatest pleasure of your 0:21:28.480 --> 0:21:32.119 life is your family or financial success giving away money? 0:21:32.160 --> 0:21:35.760 What do you most enjoy? No, the financial success has 0:21:35.800 --> 0:21:40.000 never been It's an inadvertent thing that came largely because 0:21:40.040 --> 0:21:41.840 I like to play a game that if you played 0:21:41.840 --> 0:21:45.120 the game, well, you get the money. But the financial 0:21:45.160 --> 0:21:48.840 success has never been uh. Pass taking care of my 0:21:48.920 --> 0:21:52.040 family and living adequately. Uh, it's been a nice thing 0:21:52.080 --> 0:21:56.000 to have it. No, UM, for me, the most important 0:21:56.000 --> 0:22:00.359 thing in terms of saving really has been relationships. UM. 0:22:00.400 --> 0:22:04.680 Meaningful work and meaningful relationships. These are the most important thing. Well, 0:22:04.720 --> 0:22:07.240 I on a mission, to have a passion to work 0:22:07.240 --> 0:22:10.040 with people that I liked to understand the subject. Well. 0:22:10.320 --> 0:22:13.800 I love my game because it forces me to understand 0:22:13.880 --> 0:22:16.840 macro economics the world and to bet on it in 0:22:16.960 --> 0:22:19.840 relationship to other people. So it tests whether I have 0:22:19.920 --> 0:22:23.440 that knowledge. I love that, and I'm glad that we've 0:22:23.480 --> 0:22:26.600 taken it to a certain point. And then there's the 0:22:26.680 --> 0:22:29.320 things that I've savor even more than that above all 0:22:29.359 --> 0:22:33.639 else with seventy years old, and is the relationships, the 0:22:33.800 --> 0:22:37.439 quality of the relationships, that sense of community. That's what 0:22:37.560 --> 0:22:41.040 I treasure more than anything. Thank you very much for 0:22:41.080 --> 0:22:43.520 an interesting conversation and it's a terrific read and I 0:22:43.560 --> 0:22:46.280 highly recommend it. Thanks for writing it, Thank you for 0:22:46.359 --> 0:22:53.080 having me. That was Bridgewater Associates co Chairman and co 0:22:53.240 --> 0:22:55.120 chief investment Officer Ray Dalio.