Why the CEO of the World's Largest Hedge Fund Thinks You're Soft

Published: Jul 18, 2011


This week, Ray Dalio, the founder and CEO of Bridgewater Associates, the world's largest hedge fund by assets and one of the world's most profitable firms, gets The New Yorker treatment: a several-thousand-word profile by the prestigious weekly publication in which we learn that Dalio, whose firm has been likened to a cult due to its unorthodox culture, which itself is based on Ray's 100-page-long "Principles," will soon be relinquishing his CEO duties to become "Mentor" of Bridgewater. We also learn that Dalio is an extremely bada$$ manager and investor and that (most likely) you are not. Here's why:

cape buffalo1. You don't like to kill things.
Ray Dalio does. In fact, Dalio "is an outdoorsman and naturalist of the Hemingway school: he likes to go places and kill things. He fishes in Canada, shoots grouse in Scotland, and hunts big game in Africa, with a bow -- particularly Cape buffalo, which weigh up to two thousand pounds, are famously ornery, and sometimes gore hunters with their giant horns. Naturally, Dalio sees this as a metaphor for how he invests. 'It’s always a matter of controlling risk,' he explained. 'Risky things are not in themselves risky if you understand them and control them.'"

2. You talk behind coworkers' backs.
Ray Dalio does not. In fact, according to Dalio, "A typical organization [aka an inane one] is one where people are walking around saying, ‘This is stupid, this doesn’t make sense,’ behind each other’s backs." Whereas an exceptional organization (aka Bridgewater Associates) is one where this does not happen. For example, when deciding whether or not to promote someone, or whether or not to hire someone, Dalio will discuss a candidate's candidacy in front of him or her. And Ray will not pull any punches when deciding said someone is not going to get the nod. One such promotion candidate "arrived and stood before Dalio's desk. Dalio explained what the discussion was about and said, 'I don't imagine that you would be a good fit for the job.'"

3. You do not like pain.
Ray Dalio does. In fact, Dalio's business and personal philosophy (the "radically transparent" one) includes this equation: "Pain + Reflection = Progress," which "Bridgewater puts ... into action by organizing lengthy assessment sessions, in which employees must discuss their mistakes."
4. You constantly stroke your ego.
Ray Dalio does not (and will not). In fact, according to Dalio, the ego is the root of all evil and inefficiency inside capitalistic corporations. And it is the ego, above all things, that Dalio attempts to do away with inside the glass walls of Bridgewater headquarters. He explains, "What we're trying to have is a place where there are no ego barriers, no emotional reactions to mistakes ... If we could eliminate all those reactions, we'd learn so much faster." [See Dalio's "Principles," available on the firm's web site, for much more on egoless living and investing.]

5. You don't practice transcendental meditation.
Ray Dalio does. In fact, the technique, which Dalio picked up in India after John, Paul, George, and even Ringo took it up, is paramount to his being a billionaire. "Most mornings before going to the office, [Dalio] still meditates. Demonstrating his technique, he sat back in his office chair, closed his eyes, and clasped his hands in front of him. 'It's just a mental exercise in which you are clearing your mind,' he said. 'Creativity comes from open-mindedness and centeredness -- seeing things in a nonemotionally charged way.'"

6. You think you're a big swinging deal since you work on Wall Street.
Ray Dalio does not. In fact, Dalio puts very little stock into bulge-bracket banking experience. He says an investment bank is a "totally different world" than working in hedge funds. To boot, remember said promotion candidate in point No. 2 above? Well, in Dalio's and other Bridgewater employees' presence, "the candidate explained his experience on Wall Street and said he thought he could do the job well. Dalio leaned back in his chair, looking skeptical. The employee didn't get the promotion."

(Related: Everbody Loves Raymond Dalio, the CEO of the World's Largest Hedge Fund; Bridgewater's Ray Dalio Signs Gates and Buffett's Giving Pledge; Bridgewater Associates Is Not a Cult, It's the Future; Bridgewater's Ray Dalio: Cult Leader or Profit Prophet?)