Principles
principles.com
principles.com
Bridgewater is easily one of the most consistently performant hedge funds in history, so it's hard to argue there isn't anything at all to ways in which they're different. Capital-T-Truth is worth its weight in gold when your business is predicting the future.
My conclusion was that the system for which Principles sets the stage really does seem like a sort of Truth-utopia. I say that with no hint of irony--it really does sound like bliss to have so many unproductive communication complexities actively suppressed. If you've ever felt like work shouldn't be about navigating complex political landscapes, or other people's egos and insecurities, but instead about the team's mission, then a system built on Dalio's principles is probably up your alley.
In practice, it turns out it might be a little tricky. Understandably, there's a tremendous stigma at Bridgewater with becoming defensive when confronted with your potential 'wrongness.' It's one of the things they screen heavily for: can you receive aggressive critique of your argument, often bordering on personal attack, without feeling threatened or defensive--ie, while still maintaining a relentless pursuit of Truth?
Problems start (again, as I understand it second-hand) at the point where people use Truth-seeking methodology like a cudgel. Consider a simple example, not significantly altered from a friend's first-hand experience:
You: "I think we ought to do X, because of [etc etc]"
Colleague: "What? It feels like you're not even considering Y. I think what we're seeing is that you're consistently refusing to get your head out of your ass and see [etc etc]. You have a bias that leads you towards X, and it's making you useless to this project."
You: "I understand your argument and I think it's fair to think I have that bias. However, I've thought a lot about that particular bias, and I've concluded that it isn't a bias because of [etc etc]. So I think the premise of your objection is flawed."
In this example, were 'You' responding to the merits of the argument presented, or were you being defensive? How do you know? How do you disagree with arguments couched in critiques of your objectiveness, self-awareness, etc?
The conclusion I ultimately settled on was that so-called 'social niceties' don't just serve as kid-gloves for fragile egos. They're also a reliable mechanism of giving people the space to engage in honest discussions about their own short-comings as they relate to the argument.
Because the Colleague in this example had been conditioned to understand that more aggressive arguments can functionally shut-out a dissenting opinion (because, again, of the stigma around defensiveness), I'd argue he/she had incentive to act aggressively.
In some respects, the Colleague in this example has failed to check their own emotions (irritation, frustration, etc.)--a slip-up that isn't nearly as vilified as failing to control emotions when confronted. This sort of asymmetry, I think, is one of the bigger risks in this type of system.
Like I said at the top, though, I ultimately did apply. My reasoning was simple: every work culture has its baggage (I'd come from investment banking), and I felt this baggage was more manageable than most other types I was familiar with.
Now that I'm building my own company, I've been re-reading Dalio's stuff. I really respect what Bridgewater is trying to do culturally, and I'm anxious to see if parts of it are transferable to a more tech-oriented workplace (and one where the average worker doesn't gross $200k+, fwiw).
Going to give this a read now.
[0]: self-criticism, "Truth-upia", "a little tricky"
https://hbr.org/product/an-everyone-culture-becoming-a-delib...
I think the best way someone introduced me to Ray Dalio's principles is that it gives employee's the freedom, not to be an asshole, but to cut right to the heart of the problem without worrying about social niceties.
it's a common complaint and almost cliche on HN to hear someone say they find American culture ot be a bit "fake" where Fake refers to being polite or dancing around an issue rather than stating it clearly because they're worried about social niceties.
Principle 97 comes right out and says "Don’t let people off the hook."
and Principle 98 follows up with "Don’t assume that people’s answers are correct."
When you are free by the CEO's decree to just flat out not let someone off with a half assed answer I find that you get to the root cause of issues faster.
The downside of course is that asshole's are even more pronounced and even the most well meaning people start to sound a bit like assholes. If you have thin skin it doesn't work well, you need to learn that people aren't attacking you, but attacking the problem instead.
Not everyone transitions well to this type of environment as it can be a bit of a departure from the norm of many companies existing cultures.
Interesting, I never heard this at HN at all and here in Brazil we have the exact opposite perception: americans are very straightforward in business while we worry too much about niceties, ammenities and excessive politeness that borderlines hypocrisy. We consider this a disadvantage in our culture regarding business.
People in the UK would rather have dour but straightforward service than forced cheeriness that speaks of some kind of “compulsory smiles everyone!” management acting behind the scenes.
It's an important information-seeking question!
But, for some reason, in many geographies, here, in the US, people often (apparently) take it to mean something like "I don't agree." or "Justify that.". And that triggers defensiveness, and then you aren't getting information.
Because my goal is the information nugget at the end of the quest, I've learned, with most people, until I know them well, to use something like these instead of "why?":
- "Interesting. Why did you decide to do it that way?", or
- "Really? How did you prioritize the trade-offs to come to that conclusion?"
I would think, given my travel and cultural experience, that the US would be one of the least problematic countries from the PoV of being allowed to challenge "authority" and ask "why" without catastrophic career consequences, but would be interested to hear other perspectives.
I never found my co-workers to be defensive when I asked them the same question in Japan (in Japanese). I didn't have any subordinates, and management let the group decide, (at our level), so challenging management rarely came up.
I agree that asking "why" is probably not a career-ending move in the US -- I'm just talking about the subtle first-response I've notices from other Americans in the first place. I don't know that it has any larger relevance than to maybe lend support to the idea that US workers (or engineers, anyway) are afraid to be wrong in public too.
But, in companies that manufactured products intended to compete in the global marketplace (and not something intended to meet some local need), the internal processes for doing root-cause analysis of design, manufacturing or even business model defects was pretty direct/efficient/ruthless and impersonal. To me that makes some sense: If I were on a team of 100 NASA engineers, all of us armed with slide-rules, trying to send some people to the moon and back, I wouldn't want feelings (or social standing) to get in the way of the process of verifying that the calculations were correct.
Your two questions could elicit a better response, even though it's basically the same as "why," because it's at least showing a semblance of effort and the interest to probe deeper.
Excessively tough-minded bluntness is frowned upon for good reason.
Eg How Trigger Warnings Are Hurting Mental Health on Campus - The Atlantic https://www.google.co.uk/url?sa=t&source=web&rct=j&url=http:...
I think I have some kind of communication issue because often when I'm asking questions about decisions, people often think I'm arguing against them. Example: My boss decides to make a policy of $x. When I ask why, I can see my boss get frustrated.
I'm legitimately asking why, because I'm curious. I'm not trying to be an ass, but I come across that way for some reason I don't understand. I wish I could figure out why, but nobody has been able to articulate to me why they think I'm arguing.
I find this is effective even if you actually do want them to change their decision. Come in with a compliment, then try to lead them to recognize the flaws in the decision themselves.
Be honest with yourself and others. Self-education is a life-long commitment. Failure to plan is planning to fail. Think for yourself. Think things through. Know when to hold em, and when to fold em.
There. I think that covers probably 70% or so what he expounds on in his 210 principles.
That said, I like reading these kinds of articles because I'm still relatively young and yet to experience the full extent of life. I figure being able to collect the wisdom of those who have been around longer than I have will be quite useful.
My perspective on this (and feel free to point out if there are any flaws in my thinking) is that this tendency to "work within the system of evolution" is how humans evolved. With our consciousness and self-awareness, however, we've accepted that some things that run contrary to self-interest are sometimes "good" for society. We don't have a society of absolute Darwinian natural selection; we've set up some structures to make sure that everybody can live a life where certain rights and freedoms are protected. Things like Universal Basic Income would go against the author's apparent Social Darwinistic morality, even though it might be a net positive for society.
So I'm not sure I agree with that view of "good" and "evil", though it certainly is the most practical and effective when you're managing a company.
For example, humans evolved to be social creatures. Interactions with other humans impact our body chemistry in dramatic ways. I want to avoid loneliness, so I selfishly hold relationships with others. I want to hear people say "thanks" to me, so I selfishly give people gifts. I want to be able to be righteous without hypocrisy, so I selfishly stick to my principles.
Just my two cents. There are a lot of different types of desire in the world. Who's to say that UBI wouldn't be in folks' best self-interest?
I generally avoid this type of advice due to the inherent effects of survivorship bias. Admittedly, I haven't read all of the words yet. Am I being too rash, or does this boil down to the standard fare of a successful person's biased view and false narrative about how they have been successful?
I am, however, intrigued with the ostensibly rigorous approach of making sure the subject is defined precisely.
Building an organisation the size of Bridgewater involves many, many sub-challenges. How do find an opening with this client? How about this other client? How do you close a deal with this client? How about this client? One client now has an issue we're not able to solve. How do you retain them? How do you build a system to manage the sales pipeline and client relations?
Who do you recruit for this position? How do you interview them? How do you track for bad hires? How do you train interviewers so you avoid future bad hires? How do you build a system to handle recruiting and HR issues?
How do you train new hires? How do you decide who to promote? How do you minimise office politics? How do you handle conflicts between managers and teams? Etc, etc, you get the idea.
Once you've faced similar issues multiple times, you can track failures and successes, and figure out the essential actions which usually lead to success in that particular field. These essential rules are principles. Over time you identify meta-principles which apply to all fields (e.g., "be rational", or "avoid wishful thinking").
I assume you didn't intend to be offensive, but your attitude boils down to "someone smart and extremely successful has taken the time to identify what they believe to be the factors behind their success, and I'm going to dismiss their opinion without reading it, because I've decided, a priori, that they must be delusional, and I regard this a-priori reasoning as the scientific and rigorous approach".
However, I think you bring up a fair criticism. It's worth reading, if nothing else, because of what Dalio has seen and experienced, situations I will likely never find myself in. As such, I would otherwise not learn firsthand how to react to or solve problems in such environments. Whether his association between actions and the outcomes are true is only part of the value of what he has written.
Cool, that's perfectly reasonable.
> We are all guilty of it, no doubt.
This might sound facetious, but don't you see the contradiction here? Towards the proposition "These are the principles Dalio used to achieve success", you are skeptical. Towards the proposition "people erroneously construct narratives regarding cause and effect in their lives", you have no doubt that it applies to all people.
Why not apply skepticism towards the second proposition? Maybe somewhere on the planet are people who are able to examine their lives without constructing false narratives.
The reason I am not being facetious is that skepticism is extremely popular amongst intelligent people, but it leads to such contradictions in practice (e.g., "I know that all knowledge is biased").
However, per Kahneman, possibly some modes of thought are more susceptible to bias and to a greater magnitude than other modes of thought. This might allow for one to examine certain beliefs or actions based on one mode of thought with a higher degree of accuracy and lower susceptibility to bias than others.
This is getting off topic from the OP, but you raise an important issue that I think about often but don't have a good answer for. Thanks for the critical discussion.
I think the best counterargument comes from Lester Frank Ward, writing about Social Darwinism: http://www.nlnrac.org/critics/social-darwinism/documents/min...
Being a proponent of natural selection, non-interference and laisser-faire is inconsistent, because who can be against protecting the innocent from injustice or healing the sick?
A related argument is this one: the laws of physics cannot, in a sense, be the source of the laws of morality. This is because the laws of physics are (by nature) inviolable -- you can never really "disobey" them. But moral laws are (by nature) able to be broken.
Edit: Aristotle disagreed with this latter argument: he thought that final causes were both causes of physical events and the source of moral rules. But this conception of physics has been (almost entirely) displaced by the modern scientific method.
With the caveat that I've only read a portion, I am put off by the anecdote about the Hyena and the Wildebeest. This is where he seems to be attempting to justify social Darwiniasm with actual Darwiniasm, and bizarrely projects his own conception of morality onto both.
He seems to believe that evolution is directional, and moral, which seems rather fanciful to me.
The question of trying to understand morality based on principles of Nature strikes me as pointless.
When the Hyenas kill the Wildebeest, for food, to them it is good. To the Wildebeest who was killed, it was undoubtedly bad, if anything can be called bad. To the Wildebeest who remain, perhaps in a more healthy overall environment, it might go either way.
I'm not sure what my point is here, except that my intuition is that there are some basic principles of morality, and they are not synonymous with "success." This impulse of successful people to extend methods of achieving success to be more than that is weird.
They could use `replaceState`[1] instead of `pushState` though so as not to mess with your browser history.
[1]https://developer.mozilla.org/en-US/docs/Web/API/History_API...
The alternative is making users share the root URL, or scroll back to a menu and click a link to get the url directly to that #anchor.
This doesn't appear to be a commercial site at all. Weird that an ad blocker would be in conflict with it.
Also: I was able to read it with no problem with lynx, a text browser, after scrolling wwaaayyyy down to get to the article. Why don't designers (or whoever's responsible for this decision) put the content physically first, and the cruft last, in html? You can obviously arrange what gets displayed first in CSS/javascript. It would make life easier for text viewing people and their tools.
/rant
I like this analogy and will be stealing it for future use. It's for this reason alone my site is plain text with few images and few styles.
Time to see how my site does in a CLI browser like Lynx or eLinks. :)
Heh, I stole it from someone on here. I purposely built my site to work with minimal unnecessary components (JS, CSS, etc), and that makes it "just work" with things like Lynx. As it turns out, making sites simple also make them more compatible!
For some reason (probably that I recently ran across it), this reminds me of:
"designing the system so that the manual will be as short as possible minimizes learning effort."
- Mike Lesk, as quoted in Expert C Programming, Van der Linden. https://en.wikipedia.org/wiki/Mike_Lesk
If an elevator fails to operate - you can't get anywhere. If an escalator fails to operate - you can use them as stairs.
I found it a bit silly that the WSJ doesn't name the hedge fund in question.. It's like seeing a link on Hacker News that says "This company is redesigning its architecture", and the company is Facebook. Just say "Facebook is redesigning its architecture".
I shared the video about "How the Economic Machine Works" (narrated by Dalio) on Facebook yesterday.. Here's the video:
This stood out as particularly relevant to our deep political schism of late. When you have subgroups calcifying around worldviews that haven't been stress tested outside of whatever microcosm they originated in, you end up with with large pockets of people subscribing to massively wrong ideas.
One principle I live by is minimalism. With technology it's easy for things to become rapidly complex. It's worth applying mindfulness to technology and seeing the results. Most of my solutions are easy solutions with no cruft, instead of complex solutions with bells and whistles galore.
Another principle I try to apply is doing one thing at a time, which ties into minimalism. It's so easy to fall into the trap of distractions and multitasking. I've trained myself over the years to cull distractions, and segmented my workflow into discrete single duty units of work. If I'm on Skype, then I'm on Skype, & I'm not checking my email or Twitter too. If I'm on Hackernews, then I'm just on Hackernews, and not lurking in Reddit too, etc. It seems obvious, but focusing actually requires training.
Virtualization has helped with this, and it's not uncommon seeing me spinning up a new VM for the sole purpose of video conferencing, and having an entire operating system just for Twitter, etc
There's a resonance here with Andy Grove's constructive confrontation and the kind of zero based idea they had about lines of business after realising mistake with memory vs cpu.
I think the main difficulties with it come from Dalio's insistence that everything is a machine - hunan beings, the family, the firm and the economy. I don't believe that is true - even code has an organic aspect to it, and firms are certainly organic.
And I think that shows in the difficulties he has with sustaining the principles as he steps away. If you read the comments on glass door, few complain about the principles but they do complain the principles aren't properly applied. So I think that's because he neglects the human aspect and if it's a cult if is insufficiently a cultus. (see TS Eliot).
Any approach can end up becoming a substrate for opportunistic and political behaviour. And most people aren't cut out for quite that level of directness.
But I learnt much more from Dalio than the stuff where I think he gets it wrong, and it's pretty powerful stuff because he has set out a coherent philosophy.
Charles G Koch has similar ideas about getting to the heart of things and bring critical. He says if a supervisor isn't being challenged by employees after a couple of years then he shouldn't be a supervisor - but the obligation is on both sides. See his books or YouTube interviews.
I wonder if yelling and berating others is less helpful when its a technical issue versus yelling and berating others when it's some soft skill issue
Sounds like a justification for low-balling your pay. If there is a large range for "comparable" credentials, and you have been underpaid at a previous job, you get ... still low pay.
I say this as a person who was chronically underpaid for much of my early career due to this.
You could blame me for not being aggressive, for not advocating for myself, for being unaware of what others made. And I do blame myself. Don't make the same mistakes I made!
But yeah, it is unprincipled to default to getting away with paying somebody on the lowest end of the scale just because you can get away with it. You can dress it up as "smart" or "principled" however you want, but it is still scummy. Low pay can stick to somebody for years, it takes forever to climb out of it because it takes a lot of relatively high percentage raises, during economic downturns.
Do "ethical principles" fall in the same category?
I think the author is confusing principles for heuristics.
In particular, Dalio's anthropocentrism towards nature, evolution and the convergence he establishes between such human concepts as good and evil and subjective perception of outcomes make his work look shallow and flawed.
Overall, I think that his document works more towards justifying his situation than explaining it. If anything, I would suggest reading Spinoza as much as possible rather than this.
This probably holds equally for natural sciences, but these latter have the fortune of rather easier checking against reality.
Curious assertion -- is that true? I know I prefer to hire engineers with at least some humanities background.
I was lucky enough to have someone show me this, and now I try to spend a fair amount of my time educating myself not only in my field but also in philosophy, sociology, etc. I am happy to discover these now, rather than after a life of making things I would regret.
1. It's difficult to make a career in it unless you apply it in a non-traditional way. Many kids are often misled by that.
2. There is a lack of rigor, politics-under-the-color-of-science and experimental reproducibility problems in the humanities and social sciences, and it's the negative downside you have to look out for.
3. Postmodernism tends to be toxic and makes you ineffective. People repulsed by it go into more concrete things like STEM by instinct when they are young.
I. By that which is self-caused, I mean that of which the essence involves existence, or that of which the nature is only conceivable as existent.
II. A thing is called finite after its kind, when it can be limited by another thing of the same nature; for instance, a body is called finite because we always conceive another greater body. So, also, a thought is limited by another thought, but a body is not limited by thought, nor a thought by body.
III. By substance, I mean that which is in itself, and is conceived through itself: in other words, that of which a conception can be formed independently of any other conception.
IV. By attribute, I mean that which the intellect perceives as constituting the essence of substance.
V. By mode, I mean the modifications of substance, or that which exists in, and is conceived through, something other than itself.
... I mean, this kind of book is very hard work to even get a cursory grasp of, which might explain why many readers prefer clearly-explained contemporary texts by experienced people from their field of work.
However, as I read it, I also wondered if his principles were used to test his principles.