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Pay attention. Pain plus reflection equals progress. And from that principle, my company became the largest
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hedge fund in the world. Managing how much? $150 billion. But I learned that history
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of things that never happened in my lifetime before were important things to understand in order to predict the
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future. And we can get into that if you want. Peace. So Ray Dallio is the legendary billionaire
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investor who decoded the cycles of human history to predict financial crashes. build the
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world's largest hedge fund. And now to warn us about what lies ahead. Are you optimistic about the future of
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the UK? No. What about the United States? No. Why? Okay. In order to bet on what's going to happen on the global economy, I learned
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that there's five big forces that create a big cycle that's repeated through history which lasts about 80 years. The
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first is the money debt force that creates wealth and opportunities gaps and it's connected to the second force, the internal conflict where you don't trust the system causing wars between
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the left and the right and it's not easy answers like tax the rich and we can get into that. But the third is geopolitical
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force. In other words, international conflict. Then there's acts of nature. And then number five is man's
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inventiveness particularly of new technologies. Now the question is who wins the technology war because the
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winner of that determine how the new world order works. Is it something to be concerned about? No. The question is how you as an
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individual handle it. How do I as an individual handle it? So there's building your financial strength, flexibility, the importance of
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being open-minded and how to get more out of the minute, not how to work harder. And I really urge your audience
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to learn all of this. So, first of all, I see messages all the time in the comment section that some of you didn't
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realize you didn't subscribe. So, if you could do me a favor and double check if you're a subscriber to this channel, that would be tremendously appreciated.
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It's the simple, it's the free thing that anybody that watches this show frequently can do to help us here to
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keep everything going in this show in the trajectory it's on. So, please do double check if you've subscribed and uh
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thank you so much because in a strange way, you are you're part of our history and you're on this journey with us and I
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appreciate you for that. So, yeah, thank you. [Music] Ray, I I want to describe to you who's listening right now. And the question I
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have for you is what is the most important thing that this persona of person should be thinking about at the
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highest level right now. So the person that's listening is someone who is intent on improving their life. They're
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they're really interested in business, potentially starting their own business. They they care about where they're
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investing their their time and energy and also where they're setting up their home based on in terms of geography.
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They are aspiring to accomplish some goal. They're probably between the age of 18 and 50 predominantly and they are
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very very interested in understanding what's happening in a world that feels incredibly
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scary, fast-paced and uncertain at the moment. This is a very difficult question, but
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if anyone I was going to ask anyone, it would have to be you. What What's one of the first things they should be considering at this moment to safeguard
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their future, their family, their finances? I don't think it's a difficult question. I um I think it's it's very clear. They
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have to understand how the life cycle works. Okay? They have to understand it how it works. We were just talking before, you know, in the book and there was the arc of the life cycle, right?
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And you have to understand that you're on an adventurous journey. Okay? And you have a certain nature. You know, those qualities that ma make you have your preferences and so on. And
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then you're going after the things that you like and you're learning and it's going to have the ups and downs and so on and how you approach that. So you
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asked from the higher level if I'm looking down you know like that life cycle that arc what's that journey like
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how do you approach it you know what are your principles how do you even learn how to approach it that's why we're
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having these conversations right y so that's clear you know what's your nature how's the journey how do you find
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the path that's suitable to your nature and then you'll go down that path and you'll discover and you'll evolve. What's that like?
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That's what they need to know. You said what's your nature? What do you mean by nature? People are born with and then also their
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environment creates their different nature. You know, we have our preferences, our inclinations. We think
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in a certain way. You chose to be entrepreneurial. Okay? You're living out your nature. Okay? This isn't for somebody else. You know, some people have a different nature. Okay? They
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would like to have the stability of a job and clarity and so on. So when you have your nature, you want to know that and then find the path that is going to
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be good for your nature. Then there's the particular tactical stuff. So if you would ask me, should I be in the UK or
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should I be in the US? Well, that depends on a lot of things, but that's a tactical question.
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So if I want to be an entrepreneur and I want to build a technology company, do you think I should be in the UK or the US? I think you should be in the US.
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Why? The US has a culture of um entrepreneurship, inventiveness. There's a whole different culture like in Europe generally speaking and in and in the UK
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there's an establishment culture, right? And here um you could be 25, have a blue
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streak in your hair and have the talent, but if you got the talent to pull it off, you can get the resources and you
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can be an entrepreneur. It's there's a culture of that. That means that it's happening more. That's why you even see
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the differences in the economies. Okay, where is the inventiveness really happening? Okay, it's happening here. So
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I would say if you want to be an entrepreneur, this is an environment that's particularly conducive to being
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an entrepreneur. So what is your honest perspective about the UK at the moment? The UK has a financial problem. Uh the
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government has a debt problem and it doesn't have enough money for what it wants to do and what it can do. And so
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what you see is the nondom problem, people moving and so on so forth. And throughout history, when you have these sorts of things, then there's great clashes in people. Okay? And the UK has
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been in decline since the war. Even the development of the capital markets, can you raise capital there? All of these things are much worse than they are in
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the United States. And it leads to clashes. He said, "Of course, you know, there are five big
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forces that create a big cycle that lasts about 80 years, give or take 50, let's say. And the five big forces are there's
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a money, debt, economy force, okay? Debts are spending power. So what happens is when you give somebody credit they can spend and then but it also produces debt and
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debt has to be paid back and so what happens is if there's not enough income to pay back the debt then you have um debt rising relative to income it
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squeezes out spending people don't want to hold the debt assets and so on the UK
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has gone through that and has gone through that and it's connected to the second force And we're all going through
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this in varying degrees. The second force is the internal political and social force. In other words, like
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between the left and the right with wealth gaps and opportunities gaps. We have big wealth and opportunities gaps. So when you have big wealth and opportunities gaps, there's conflict.
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Okay? Conflict between the left and the right. And when you get to the situation where you don't believe the system is
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working for you and you don't trust the system, then there are wars. There are internal conflicts over over that and so
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on. So the third force is the geopolitical force. In other words, u there's a cycle that usually goes from one big war to another big war. So the
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last war ended in 194544 and we began a new order in 1945. And the way that works is that the winners of the war determine how the world order
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works. They draw borders. They say here's how it's going to work. And that's the new order. Okay? And that
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continues until there's a rising power challenging an existing power and the existing world order which typically is deteriorating at that time. And then you have international conflict. Okay, these
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orders, there's a monetary order, they all break down. There's an in internal political order, they all break down. And and there's a geopolitical order. They all have this conflict and they
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work together. The fourth force throughout history has been acts of nature. Droughts, floods, and pandemics,
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for example, have killed more people than wars. And acts of nature, nature has a big effect. And then number five force is man's inventiveness particularly of new technologies.
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Okay, because if you see that inventiveness that has raised per capita incomes, GDP per capita, any measures of living standards over a period of time
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and and so on. But it is also related to the first four that I said those four four forces interact. Now when we go back to your UK case, okay, they have a
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financial problem. they and almost every country now is dealing with more of that internal political problem for the same reasons. Wealth gaps,
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opportunities gaps, what do we do? Who's got the power? I don't trust the system kind of thing. Okay. Number three is we
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are certainly in an international great powers conflict, right? And it certainly
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affects Europe and the UK as we're dealing with not only the Ukraine situation but the Russian situation and
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what does that mean and that relates to the money thing because okay where's the money coming from to have defense or
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military expenditures and so on so forth. So that matters right the geopolitical matters climate certainly
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matters and then of course technology man's inventiveness. So everything could be looked through at
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through that lens. And so what does this mean for the UK if all other countries are going through
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this as well? Doesn't that just mean that all countries are going to suffer equally? No. No. No. Because they're not all
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equal. Okay. Some are more in debt than others. Okay. Some people are more willing to hold their debt than others. Um some means they they have more
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resources. Some are bigger and more powerful. Some are less powerful. They're different. Okay. They're all go
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in different conditions. Some countries have surpluses. Some countries, you know, are not in the middle of where
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there's having a war. Are you optimistic about the the future of the UK at the moment?
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No, no. Because it has high debt. It has the social internal conflict. It it's affected by the geopolitical factors.
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And in terms of inventiveness, it doesn't have the culture that other countries have like like the US. Is that
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Yes. The cult culture and the capital markets to support that at a scale that it needs to be supported to play seriously in the game. And for anyone that doesn't know capital markets mean basically the investor
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markets is way of saying well I mean it gets you the money. In other words, you're a guy with you know
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what happens is um we have to enable people. Okay. What what works is finding great people, talented people, and identifying those
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who you want to bet on and enabling them. And that works. That's the most important force, much more important than money. Okay? Because you could see
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who's got the money and power and where did they come from? Where did Nvidia come from? Where did where did they all
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come from? Okay? There are guys like you, entrepreneur in a sense, who's been enabled, okay, by you because you have the talent and people want to bet on you and that's the capital market. So they
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give you money to help enable you because they want to bet on you and then good things happen.
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But are you are you optimistic about the United States at the moment? The United States is very much a big
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picture. No, I think it's very much in this issue there. So, if I go down my list, it definitely has this uh debt
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money economy problem. We can get into that. Okay. It definitely has the internal conflict power in which there's a fight between the left, you know, the
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hard left and the right due to wealth and values gaps and people not believing that the system will work for them. And so democracy is at risk because they
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don't believe this. They they're not going to follow the rules in the sense they don't believe the rules are going to uh number three it's of course the
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leading one side in this great power conflict of the world right in other words yes between the United States and the one side let's say and China and the
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allies their allies on the other side. I mean in the news you just saw the meetings of Xi Putin Modi and that group
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over there walking down you know and okay so now it should be pretty clear how the sides are lining up okay you it's always better to be in a place that's not in one of those wars like
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stay out of wars um and of course climate has an effect and of course then we have technology the United States and China are in the big technology compet competitions. The others are really not
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in the game. They don't have the money that this innovation and talent in a sense to play at that scale and so on.
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So we have a great you know technology war which can be used to create great advances but at the same time could be used for great conflicts. And so now the
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question is going to be who wins the technology war because the winner of the technology war is going to win all wars.
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Okay. In other words, they'll win the economic war. They'll win the geopolitical war because technology and
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I'm not saying anything that hasn't repeated through history. Give me that historical context if you
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can just for the technology for example nuclear. Yeah. Nuclear won World War II. And and does this cycle go back further
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than just Oh, no. It goes back I that book. Okay. Um, in order to understand these things,
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cuz I have to bet on what's going to happen. I'm a global macro investor. I study the last 500 years of history and
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and it happens over and over again in all cases. So, I could take the British Empire, I
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could take you through all the empires, the Dutch Empire before that, and all this, and it it it happens uh all the
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time. I watched your I watched your videos about this and it was truly fascinating how predictable this stuff
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is and the work that you've done to uncover this trend throughout history. I mean, it's almost for me it was almost
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irrefutable watching the evidence in in I think it's like a 40-minute video on YouTube where you show how this played
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out through empires. And it begs the question, you know, because when you live in the United States, when you're
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when you're in the present time, you almost never assume that the empire you're in could fall. You just don't you
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don't see how it could happen. We're so strong. We're so great, you know, we're so that doing AI over here, have money over here, everything's good, the sun's
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shining. It's inconceivable. Of course, people always think that the future would be a slightly modified
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version of the present, and it's not. Okay. Watch over decades, but it's like watching a person grow. Yeah. Okay. Yeah. You know, you watch your kid or you
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watch a person at your age, any age, and that's what you see. Yeah. Okay. And you don't see the life
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arc. Yeah. Okay. But the life arc is in irrefutable. But the U do you think it's conceivable
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that in the next 50 to 100 years the US could no longer be the dominant power globally?
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Yeah. Yeah. More than conceivable. More than conceivable. What does what do you mean by more than conceivable? I mean that these evolutions always take
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place and they take place in a certain way and that um if you look at the probabilities um and the paths and the symptoms there is a challenge the United States
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is facing a number of those challenges and we're at a moment where Um it's a question of whether the system and the people
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could can get control of the situations and deal with it strongly and well in a way where they are not
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fighting to the point of damaging each other and damaging managing the prospects for the future. But I mean, the United States is very
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innovative. Got all these great innovative companies here. So surely Yeah. But you you can't make
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generalizations about the United States. And you can't make generalizations, by the way, about the markets either.
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um what you see is um 1% a small percentage 1% of the population if you're looking at the breakdown of incomes and also you're looking at the innovation the stock
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markets which stocks are doing well who owns those companies and all of that about three million people in a country of uh 330 million people are really
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unbelievably doing great and you could pick the neighborhoods they're in and what they're doing. And then there's the
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top 10%, let's say, which is the people around them. And they're really, really doing great in that world. At the same
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time, the bottom 60% 60% of Americans have below a sixth grade reading level. Wow. And that population
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in terms of um the basics being productive, you have to be productive and be prosperous. So what what you need to
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have a su successful society is to have broadbased productivity and prosperity. Okay? And that's a problem. Okay? So, which America are you looking
00:19:46
at? And are you watching the war that's happening between these? It's a little bit complicated for me as a as a bit of an outsider because I see Trump saying he represents those people,
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but obviously Trump is a from the billionaire class himself. So, I mean, is he is he a savior for inequality? Is
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he correcting? I think I think he sees a lot of the problem and he uh I think he
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sees the debt problem. I think he sees the internal conflict disorder problem and I think he represents uh the red, let's call it the red states. I mean, you look at a map and
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there's red and blue and you see where they are, okay? And he represents that and they're united behind him in terms
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of doing some things. Okay? So he represents let's call it the red side which is located where the maps shows red and then there are the blue and and
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he's um he views himself as somebody who needs to take charge and to do certain things. Others in that population would say those who let's say are not getting
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are having the food stamp program cut off or having other programs cut off that they're dependent on would say uh wait a second that's not representing
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me. And so we have gone that population has gone to significant number behind him that are devotees. They're all in. Okay. At the same time
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as we have the other side which will have their devotees if you know we're in New York City. Okay. And the up upcoming mayoral uh election will be an example
00:21:40
of the two sides. Okay. And they will try to use the system but there's a question will the system have enough support to work. Okay. But that's what
00:21:52
we have. Just just to close off on this point of the UK in particular, if if you were to try and fix it, what would you be aiming
00:21:59
at? I say this because we do have a millionaire exodus that's widely reported in the UK where I think this
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year we're set to lose 16,000 roughly 16,000 millionaires. Um, when you look at the big big countries like China, America, the UAE, the UK, we're losing more millionaires than anybody else. And
00:22:15
I was wondering if you think it's fixable and if you were in charge of the UK, what you might aim at first.
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It's diff, you know, first of all, if you go back to the basic problem, which is there's too much debt, there are deficits,
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there's differences in education and opportunity levels and so on. The most important thing that you can have
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is a strong middle. Political middle. Political middle to be analytically strong and also strong enough to get the people to do
00:23:02
what needs to be done even if they don't want to do it to get to be productive. Now that's an easy thing to say. It's not an easy thing to do. But you do
00:23:14
need that strong middle and you do need to convey to people that you need to have the strong middle to change productivity and you know and are you in it? Are are
00:23:28
you in it? Are you patriotic and in it and you know but you look at history how did the United States come to be the United States? People will go to the
00:23:40
places that are better than them then stay in the places that worse for them. This is fundamental right incentives. Okay. So you have to make the place
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better. Okay. Now I would say also you can take pockets and they go into the pocket and
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let it spread out. But you also have to have this equal education or you know you've got to strive for equal
00:24:07
opportunity. But anyway, it's a difficult question that I'm afraid I'm incapable of
00:24:14
um solving. It was unnerving to hear the tone of your voice drop when I asked it. You
00:24:20
seemed slightly um as if you you've kind of given up on the UK a little bit. Your facial reaction? Well, I'm I'm just a I'm just a I'm a
00:24:32
practical guy. I'm a realistic guy. I made my money. I'm in the business and it's my nature to try to be realistic
00:24:44
and to bet on how things will transpire. And that's not healthy. The situation in
00:24:50
the UK is not healthy. And the situation in the United States is very risky in many ways. It's what we're describing. So, you know, and then if you look where
00:25:00
are people going then then you see the places that have the qualities we're talking about. They're civil. They're creative.
00:25:12
The people aren't at war with each other. What happens next in history? Well, usually there's a a big fight for control, political revolutions and things like
00:25:25
that. the system breaks down because they don't trust the system. So will the legal system resolve that? Will the parliamentary system resolve that
00:25:44
these disputes satisfactorily to the satisfaction of those people and the other people who have different points of view and the sides won't believe it. And this goes back
00:25:59
this goes back to Rome. It goes back to Caesar, you know, the Senate. And you know this
00:26:07
goes back through history all the time, right? And in in the 30s, four major democracies chose to be autocracies. Okay, that happened in Italy, Germany, Spain, and
00:26:21
Japan. What's autocracy for anyone that doesn't know the word? Well, it's it means a dictatorship
00:26:28
essentially of a limited number of people at the top who are autocratic, which means that they are directing things rather than a democracy
00:26:42
in which um there's representatives of all different points of view that get together and follow rules to make decisions. So the UK could become an autocracy as
00:26:56
could the US. I guess um you're going to see a lot of pressure for that strong leader who will get control of things and make it work well
00:27:08
and will and you're likely to see two different views as to which side, you know, the red and the blue sides, so to speak. You're likely to see that type of
00:27:21
clash. You said the US is playing a risky game itself. Is that from a de debt perspective or otherwise
00:27:27
from these things? Okay. From the debt, from the internal conflict, from the changing world order,
00:27:34
the geopolitical world conflict, you know, I don't know. We're playing with nuclear weapons and, you know, in wars and different places and then of course
00:27:46
climate and then the technology war. How we're doing that. Yeah, I saw that image the other day of Putin
00:27:52
and um President Xi and China together walking together. If China does become the dominant force in the world, the dominant power does is that a smooth
00:28:03
transition? First of all, I don't think either side is going to be the clearly dominant power for for a very long time and and the the quickest way to have it
00:28:16
is some kind of a war and that's a dangerous thing and but maybe it evolves hopefully the way the Soviet Union evolved that the the worry of mutually assured destruction
00:28:31
keeps everybody not having that kind of war and then what then then the systems one system or another system wins but that's an evolutionary process and
00:28:43
you know I can't say and um do you think much about time frames because when I was watching when I was going through the changing world order there seems to be somewhat consistent or
00:28:54
predictable time frames when these these transitions happen. Do you think about where we are? Well, they're long-term big cycles.
00:29:01
Yeah. Right. It's it's like a life cycle on average they are about a life cycle about 80 years but it's not predetermined just like your life cycle is not predetermined like if you take
00:29:14
care of yourself and you you know I don't know smoke eat well exercise and so on so forth then you will probably have a longer life cycle than if you
00:29:25
don't take care of yourself and it's um kind of like that you know and so you see them in industry they evolve but you can see the symptoms. Okay, you can see the actions and the
00:29:38
symptoms which like taking a physical uh then gives you a sense of where they are
00:29:44
in their life cycles. We're 80 years from World War II. 80 years from World War II. Yeah.
00:29:50
And you're seeing the symptoms. Yeah. Symptoms are clear. They're all in that book. You can see the charts of all
00:29:56
the systems. Is it something to be worried about or concerned about if you're in the United States?
00:30:02
No I mean, yes. And then the question is how you as an individual handle it. How do I as an individual handle it?
00:30:13
Well, first of all, I think I think you have to be aware of the situation and the risks for me and my family though in terms of risks
00:30:24
and how I should um counteract those risks. Is it a case of me saving for a rainy day? Is it a
00:30:29
That's part of it. Yeah. Um there's a there's a saying in Hong Kong um a Chinese saying which is a
00:30:37
smart rabbit has three holes. And what that means is you can see is it the UK or the US and and I can then move to the better place and get out of the place
00:30:51
that's a terrible place. So can I successfully be an immigrant or whatever and change my location? throughout history that's been important. So the ability to go to good places and away
00:31:05
from bad places. Um so that's part of it. Um secondly, building your financial strength is important which has to do with how you
00:31:18
earn, spend and save. That will determine the amount. And then what you do with that amount is invest. And so how you invest
00:31:31
uh is also important. So if you have your financial ability and you can make the move and then you have knowledge
00:31:43
you know about what's happening so that you can change things. Those are the things you need. So on that first point about a smart rabbit having three holes,
00:31:54
is it therefore a better decision at this point in time to not to not buy a house? Because a lot
00:32:01
of people end up buying a house and anchors them to to a place and it means that they then have to pay into a mortgage. So a lot of lot of the
00:32:07
financial advice most of us have growing up is when you get enough money to buy a house, move in, pay that mortgage for 25
00:32:13
years. But if I'm in a new economy, in a new world, and flexibility and the ability to get up and go and move is
00:32:19
there's there's uh value to that. The ability to move capital matters. And if you look at history, this has been an important consideration. Yes. So it matters. So if you're nailing yourself
00:32:32
down and that's your primary capital and it's nailed down there, then that's does
00:32:38
limit your flexibility. And on the point of earning, spending, and saving, wonder
00:32:43
what you you're a you're a a father, aren't you? Yeah. What what advice are you giving to your
00:32:49
children about earning money in the in the current world, where where they should set up their shop, the skills
00:32:54
that are most valuable to acquire, the technologies, the we talked about the US being a place to one of the better
00:33:00
places to build your career for all the reasons you described. Well, that's, you know, that's kind of like the particular that you asked me for. That's below the level of the higher level.
00:33:13
Okay. The higher level is I have a principle. Make your work and your passion the same thing. And don't forget
00:33:19
about the money part. Okay? If you make your work and your passion the same thing so that you're really enjoying your work, you'll have an enjoyable satisfactory life and
00:33:33
you'll probably be better at your career that um as a result probably advance and
00:33:40
so on. So you have a happier life and you will have a more probably a more successful life. But it is true that the
00:33:47
careers that you choose will have financial implications. Mhm. And if you say, "I want to be a poet or
00:33:55
something along those lines." You better consider the financial implications of that. That doesn't mean that you have to go make a ton of money because I think that that's I think a lot of people fall
00:34:06
into that trap that they think the money is um like vast amounts of money is vast
00:34:13
amounts of success. And that's not true. In other words, is your work and your passion the same thing? So, I think that
00:34:20
what brings people happiness is meaningful work and meaningful relationships. Okay? If you have meaningful work, you know, that you're into and your, you know, your passion and your work's the
00:34:32
same thing. And you have meaningful relationships, whether through that work or beyond, you're going to have probably
00:34:39
a great life. Okay? And so, you have to keep that in mind. And it doesn't have much correlation past a certain level of money. Uh it doesn't have much correlation with
00:34:51
um that well-being with the amount of money you have. And if you see studies across societies and you'll see that
00:34:59
past that certain basic level, there's no correlation between the amount of money they have and how much happiness
00:35:05
they have or well-being. Okay? that the highest level of co correlation across societies and studies of happiness and well-being is community. Do you have a
00:35:16
sense of community? Do you have those around you who are your community? You'll live longer that way. You'll have
00:35:22
a more joyous life and it'll be a better outcome. But anyway, so thinking about those things I think is important
00:35:30
based on your life cycle in this book principles your guided journey. create your own principles to get the work and
00:35:36
life you want. Do you think you have to play different games in different seasons of your life cycle as it relates
00:35:43
to generating wealth? And what I'm talking about here is really like risk profile um or what I should be
00:35:48
optimizing for. Should I be should I be trying to hang around with Ray Dalio or should I be focusing on the job that
00:35:54
pays me the most? First of all, the answer is yes. And the second question you asked the answer is um that you should be around
00:36:07
the the people who are the best people to teach you to operate by the the mentors and the learnings and so on. You should be around the best people and when I say best people I mean people of
00:36:20
good character and good capabilities. Okay. And uh so you should be around the best not the job that pays you the most. And I could explain why that is, but and
00:36:33
yes, in terms of that arc, you will play it differently at different parts of your life cycle. So in the early part of your life cycle, what you're going to do is I mean the more learning and
00:36:47
experiencing is the most important thing that you can do in the learning in the early part of your life cycle.
00:36:54
It's like you're going to make your choices. what direction am I going to be in and so on so forth. So learn. Okay,
00:37:00
that that's that's most important. And then what you're at the end of your life cycle, you're pretty much relieved from
00:37:07
all of that. You're not going to be working to earn, okay? You're going to be free of all of that. You're going to have um and you have freedom of choices
00:37:18
and so on. And you're going to be thinking about transitioning. how do I transition well-being or how do I
00:37:24
transition my wealth or how do I transition and so on you know that's that's where you are still learning is a
00:37:31
joy but at the same time in terms of trying to accomplish it's not the same at your late part of your life cycle as it is in your early part of your life cycle so I want to ask about your early life
00:37:43
cycle and what the most important strategic or wealth generating decisions you made that you would encourage encourage everybody to consider if their nature is aligned to yours.
00:37:54
Okay. My nature was I hated school. I didn't like the whole thing of remembering this and remembering this and then give it back to me and there were these uh you know history like
00:38:10
there's William the Conquer in 1066 and what did he do and you know like all of that was what education represented. And when I was um 12, a kid, I earned money
00:38:23
with odd jobs like um I had a paper route and um I mowed lawns and I caddied and I took my cadding money and when I was 12 I got everybody was talking about
00:38:37
the stock market. So I put some money in the stock market. I didn't know what I was doing, of course, but I um I picked
00:38:44
um the stock that was the only stock I ever heard of that was selling for less than $5 a share. And my reasoning was I
00:38:52
could buy more shares, so if it went up, I could make more money. Okay, that was
00:38:58
a stupid criteria, but it was a company that was about to go bankrupt. And another company acquired it and it tripled in price. and I said, "I like
00:39:10
this game." [Music] So, I got I got hooked on the game. I'm still hooked on the game, right? So, I liked it. Okay. That that affected me.
00:39:22
So, I barely got into uh CW Post College and then I went to uh Harvard Business School and that opened my eyes to the world in in many ways because of who
00:39:35
were there and what it was like and all that, you know, the best and the brightest kind of thing. But I always
00:39:40
still traded markets because I always played the game. I could tell you stories. You want a couple of quick stories? 100%. Okay. So, I'm clerking on the floor of
00:39:51
the New York Stock Exchange between graduating from college and in the summer between graduating from college and going to uh Harvard Business School.
00:40:01
And that is 197 the summer of 1971. Mhm. And on August 15th, 1971, Richard Nixon gets on the television and says
00:40:20
that, you know, the promise that that you were going to be able to take your paper money and go get gold, you can't
00:40:28
do that and we're not we're going to cut off that off. He didn't say it in exactly those words, but money then was
00:40:35
gold and what we think of as paper money, fiat money was claims on the gold. So I walked on the floor of the New York Stock Exchange that summer and I thought the market was going to go
00:40:47
down a lot and the market went up a lot and I didn't understand why because I never went through a devaluation before.
00:40:54
And I studied history and I found that in March of 1933, Roosevelt got on the radio and made the exact same announcement that you're not going to get your gold and they're going
00:41:07
to print the money. And when you print a lot of money, you have that. Okay. So, I learned that history of things that
00:41:16
never happened in my lifetime before were important things to understand. Okay. I went back then to Harvard
00:41:22
Business School two for two years and and two years later as a result of all the printing of money and the oil shock because of all of that uh we had the in
00:41:36
1973 oil shock and now because of my background I'm head hired to be director of commodities at a Wall Street brokerage firm. Okay.
00:41:48
Mhm. Which and then all sorts of things happened. Um turbulence and so on so forth. That firm went broke. I went to another firm and I was uh rowdy. I
00:42:01
wasn't your typical good employee, you know, follow everything. And uh so I got fired and that was in uh 1975
00:42:14
and then I but uh clients all liked me and for things and so they would pay me for advice and I continued to trade the markets and that's when I formed Bridgewwater.
00:42:26
Okay. And what that was 1975. I just passed along Bridgewater 50 years later. Yeah. Okay. So there's a journey there that
00:42:37
has failures and successes and learnings. You know, I have a principle. Pain plus reflection equals progress. Okay? Your best learnings come from the
00:42:50
pain. It's a message. Pay attention. Learn how reality works and how to deal with it differently so you have principles for re dealing with reality better. And I learned that process. And
00:43:02
from that process, my company Bridgewwater became the largest hedge fund in the world. Um, extremely
00:43:10
successful, managing how much? $150 billion. 1,500 people, $150 billion. And that's made you a very wealthy man. And made me a very wealthy man, which by the way was not my intention.
00:43:24
Okay. I just wanted to play the game and to have meaningful work and meaningful relationships. That was paramount. But it happened to be the game I played. If you're good at the game, you make a lot
00:43:34
of money. And now I'm at a stage in my life where I'm I want to pass things along. I need to pass things along, right? So, hence the books, hence our
00:43:46
conversation and here we are. That's the life arc. But I learned a lot. And so that's the
00:43:53
journey. I think B2B marketeers keep making this mistake. They're chasing volume instead
00:44:00
of quality. And when you try to be seen by more people instead of the right people, all you're doing is making
00:44:05
noise. But that noise rarely shifts the needle. And it's often quite expensive. And I know as there was a time in my
00:44:11
career where I kept making this mistake that many of you will be making it, too. Eventually, I started posting ads on our
00:44:17
show sponsors platform, LinkedIn. And that's when things started to change. I put that change down to a few critical
00:44:23
things. One of them being that LinkedIn was then and still is today the platform where decision makers go to not only to
00:44:29
think and learn but also to buy. And when you market your business there, you're putting it right in front of people who actually have the power to
00:44:36
say yes. And you can target them by job title, industry, and company size. It's simply a sharper way to spend your
00:44:42
marketing budget. And if you haven't tried it, how about this? Give LinkedIn ads a try. and I'm going to give you a
00:44:48
$100 ad credit to get you started. If you visit linkedin.com/diary, you can claim that right now. That's linkedin.com/diary. Just for context, people don't like
00:44:59
talking about money and I understand it, but you're a prolific philanthropist. Also, Google says that your net worth is
00:45:05
in the tens of billions of dollars. And I'm sure there's some people that have clicked on this conversation and aren't
00:45:10
aware of the scale of wealth you built up and the scale of Bridgewater Capital and how prolific and famous it is in the
00:45:16
investing world. In that 50-year life arc, one of the things you mentioned is pain. All of us will encounter pain. And
00:45:23
you said pain plus reflection. Reflection equals progress. How have you leared to deal with pain? You've had a lot of pain in all facets of life because you've lived the life arc um and you continue to. How what's the best
00:45:36
principle for dealing with pain? First of all, um to calm yourself down and to get centered. Meditation has had a big beneficial effect on my life. We
00:45:50
can get into meditation in a minute of how it has. But the ability to, you know, in a sense calm yourself down
00:45:59
and when the time is right to reflect on what's happened both to understand how reality works. You know, you want to be
00:46:10
a hyper realist. I understand how reality works. Therefore, I need to do this under this set of circumstances,
00:46:17
which means developing principles. And so what I did when I would do that anytime whenever I would think what what should I do whether painful or not I
00:46:30
would pause reflect on you know what should I do if that happened again and that's how I would
00:46:37
write down my principles and what I did was I wrote down a lot of principles a lot of principles a lot of principles if this happens that happens and whatever and then so I wrote
00:46:48
these principles down and then I found that in investing um if I can computerize those decision rules I could back test them
00:47:01
see how they would have worked and so on. So I built systems, decision-making systems. Um, computer would make
00:47:08
decisions. So it was AI before LLMs, but it was AI to have decision-making criteria. So it would be like I I would make a computer chess game that would
00:47:22
play while I was playing my mental chess game, what moves we would make. And it's
00:47:29
completely automated and so on. But I'm what I'm trying to say is that reflecting on how does reality really
00:47:37
work and what do I do when this happens to that happens is the development of principles and that has been invaluable
00:47:47
and it also makes me see things differently because a lot of people um and if I didn't do this I would be seeing almost as uh a blizzard of things
00:47:59
coming at me instead I see everything as another one of those. So let let's say for example it it's a species. So it's like seeing okay
00:48:14
that's what kind of species is it and how do I deal with that species? So it's one of those rather than just a lot of
00:48:21
things coming at me. Pattern recognition of Yeah. But but let's say if you think of a it's a duck.
00:48:27
Okay. Okay. Oh okay. It's a duck. How do I deal with a duck? Or it's a lion. Okay, how do I deal with a lion? Rather than just a lot of things coming at it. So this principle thinking and
00:48:41
seeing it that way had a big effect on the quality of my decision making and and that helped. Two questions I had there is to become a principal thinker I need to do more
00:48:53
reflection, right? And then the other think about how does how does the machine how does how does life how do these things work? So that's what I
00:49:05
mean. Okay. And to write that down. Uh yeah. Yeah. Write down your thoughts. I find sometimes what I would do is I'd uh dictate them into my iPhone. Okay.
00:49:16
Okay. I'd say no. Okay. Ah this is how when you're making a decision. Why did you make that decision? So, not just make a decision, but think
00:49:27
about the criteria you're using to make the decision also my emotions, my trauma, my
00:49:33
insecurities, my anxiety, right? And and you might say when reflecting on that, is that helpful? Is
00:49:39
that harmful? And what do I do about that? Like for example when what you're referring to is
00:49:47
yes the um that the motions and the things and all of those um we uh you have to understand that that basically the brain's got two parts to it right it
00:49:58
has the logical part of your brain reasonable tries to reason things through and then which is conscious and then it has the subconscious mind which is the
00:50:10
subliminal that is really driving you and so when you can reflect okay how are my emotions entering into it what do I you know and so on and you can think and
00:50:26
you can align that that's very powerful and meditation by the way naturally does
00:50:32
that because what you do when you meditate and maybe a times come I should explain meditation okay how it works um
00:50:40
what you do is it's a process process by which you sit quietly and you repeat in
00:50:47
your mind what is called a mantra which is a sound that it's a word that has no meaning. Let me say the most classic example of that would be okay. So you're
00:50:58
quietly there and you go with your breath you go you know [Music] like that but you need to be taught but anyway I um and so when you're doing
00:51:10
that uh because your m is in your mind or your mantra is in your mind you're not
00:51:16
able to have other thoughts. You'll see yourself wavering between doing that and staying on the mantra and then having thoughts. Um but what and
00:51:29
then you go back to your mantra. When you are uh in the mantra a a lot then it disappears. The sound disappears and you go into your subconscious mind. That's what they call transcending.
00:51:42
Transcendental meditation is the type of meditation I do. And so you go there and
00:51:47
you're not in a conscious state and you're not in a subcon unconscious state. You're in a conscious state. So
00:51:53
it's subconscious state. It's not unconscious is you're sleeping. Conscious is that you're awake like we are. You're in this. So it's a different state. Like if you hear that noise, you
00:52:04
would hear that noise. It would be big. Not when you're sleeping. But when you're in your subconscious state, then
00:52:12
it's relaxing. uh it's helpful and this process helps to um bring your conscious state and
00:52:22
your uncon subconscious state into alignment. In other words, you recognize both and
00:52:29
it calms you down. It it's like the ninja in the ninja movies, you know, they're fighting but they it seems in slow motion. The camera shows them in slow motion and they're doing whatever
00:52:41
they're doing along that. It kind of makes you in that kind of state of mind so that you're dealing with what's
00:52:47
coming at you in that way. And so what you referred to is this um these things that happen and how you deal with those is really important to the quality of your decision-making.
00:53:00
How influential was transcendental meditation in your success? Oh, enormously successful. Enormously
00:53:06
significant. Ve very very significant. In other words, that way of singing seeing things and how often and and by the way, there's you know there's I I would say say there's a
00:53:18
serenity prayer. The serenity prayer is God give me the serenity to accept that which I can't control and give me the power to control that
00:53:31
which I can and the wisdom to tell the difference. Okay. And so to how you approach these things, we're talking about reflection.
00:53:42
You ask me reflection. Okay? If you can reflect in that quality way, then you deal with anything. And I've I've dealt with uh the worst possible thing. Um I
00:53:56
lost a son. Okay? And I would have rather died. I would have rather lost everything to lose my son. So it's the worst possible thing. and and then to see what it did you know the damage and
00:54:07
the harm from family terrible. Okay. Then to go through that with meditation with reflection and so on uh was invaluable and people have their own
00:54:21
challenges but to be able to do it that way I I really urge your audience I urge
00:54:28
you to uh to learn that that's very helpful. How how did that tragedy change your your perspective and your your principles in any way on life on on happiness on success on all these things
00:54:40
that you've written about? Well, it's again I you know I go above it and um you reflect on the life arc
00:54:51
and I realize at that higher level that that's what the life arc is like. you you'll in in all my books there's this ar um arcing
00:55:06
this arcing here's a bigger version of it uh yeah there's this arcing okay I don't know if you're camera sees that okay whatever it is and that's what life and evolution is like to me meaning you
00:55:20
make advances you will have setbacks okay if you reflect Well, and you learn how reality works and how you will deal
00:55:33
with it, you will get past that and go on. And that's just what it is. That's just the way life is. And if you do that well,
00:55:46
then that's your best possible life. Are you religious? Are you a religious person?
00:55:51
I'm not religious, but I'm spiritual. Okay. The Dalai Lama who I had the pleasure of meeting told me u and I I agree with um that religions are typically
00:56:03
um a mix between superstitions and spirituality. There's half of it is that element that nobody knows but there
00:56:16
is the way people should deal with each other. There is karma. Okay. All religions there's the part of them that says do
00:56:31
unto others as you would have them do unto you or what goes around comes around and then you get to the
00:56:37
particulars. Okay. And it is true that if we work well together that even little things I can do to help you can make a big difference in your
00:56:51
life and little things that you can do to help me make a big difference in our lives. And so it's practical and it is also joyous.
00:57:01
Okay, that creates a relationship. And we talked earlier about how that meaningful relationship is like the
00:57:09
source of great happiness. But when you have a community and you do that, you have a better society. And almost all
00:57:17
religions will tell you that there'll be elements of those. And when I believe in spirituality, what I also mean is uh
00:57:24
we're all part of this greater hole. Okay? We're all part of the greater hole. And if you could see yourself as part of the greater whole and love the
00:57:37
greater whole uh and whatever that is spirituality really okay and so I will go through my life arc okay and I will die and I'm comfortable with that okay
00:57:53
in that okay it's all part of the greater whole you know na nature and whatever it is that's true I can't tell you about other things but I do believe
00:58:04
in the things I just told you when it comes to living a successful life we've talked about having dreams
00:58:11
and understanding your nature and aspiring for things and then understanding reality which transcendental meditation is a great
00:58:16
mechanism and vehicle to do um and in your in your book about a successful life you talk about plus determination
00:58:24
plus determination hard work if I want to be a successful man or woman, how important do you think
00:58:35
hard work is? Well, gives you power. It's very important, right? Some people some people, you know,
00:58:42
I'm not saying they want to choose it, but the ir the irony of things is there are first order consequences and there are second order consequences. This is like a rule of life, okay? And
00:58:52
most of the time the first order consequences whether they're likable or not has the opposite second quarter second
00:59:05
order consequences. What I mean by that is like eating or exercising. Okay, eat the foods you like. Second order consequence is probably not going to be good. um you know I don't
00:59:21
want to exercise um second order consequences won't be as good. Okay. Working hard which gives you strength. Where does strength come from?
00:59:32
I mean strength comes from working hard. So working hard will will give you power. Power will make things easier and make things better. That's just the way it
00:59:46
is. and being open-minded while you do it. Something that was openminded to you.
00:59:51
Yeah. I say uh the importance of being open-minded and assertive at the same time. Um I I I watch
01:00:03
people becoming so tied to their own opinions like this is the greatest tragedy of mankind. The greatest transgen of mankind because
01:00:15
it so easily can be fixed is holding a strong opinion that is wrong that you could have made right better
01:00:31
if you were open to learning more. If you would said, "I want to be stress tested. I want my thinking to be stress
01:00:37
tested. I want to make sure that I'm making the better decision and so I'll be challenged. But a lot of people view that challenging like a fight.
01:00:49
It's not a fight. If somebody holds a different opinion, it should prompt a curiosity.
01:00:55
You know, I don't know. Am I wrong or is they wrong? There's a 50% chance. I don't know. Maybe I'm wrong. So, it
01:01:01
should prompt curiosity and in exchange to try to make sure that you're seeing the whole picture and so on. But subliminal instincts are I'm going to stick with it and I'm going to have a
01:01:13
fight. That's a problem because there's too much on the line for so many people to
01:01:19
it's subliminal. It's it's it just goes back to the mind thinking that the intellectual challenge is a fight and it's egotistical. You know, ego,
01:01:32
I must be right. As an as an investor and entrepreneur, that's obviously particularly important because you're constantly dealing with
01:01:39
your information and feedback, which you need to be flexible. That was one of the two things that changed my
01:01:46
uh my my my whole direction and made me successful. I I can explain it if you want. Please. 19 79 and 80
01:01:59
I had calculated that American banks had lent more money to foreign countries that they were going to be able to pay back and that we were going to have a debt crisis.
01:02:10
Very controversial point of view. In August of 1982, Mexico defaulted on its debts and over the next decade, many other countries did and it caused bank problems.
01:02:24
However, at that time, I thought things were going to get bad and that was the exact bottom in the stock market, August
01:02:31
1982. So, I couldn't have been more wrong. I lost money for me. I lost money for the clients. I lost money. I was so
01:02:42
broke that I had to borrow $4,000 from my dad to help to pay for family bills because I was faced with the choice. What am I going to do? And and do I do I
01:02:53
go back to work on Wall Street, get a uh tie, get on the train, and go back that
01:02:59
which is again not in my nature or whatever. And and two things changed me. Okay, reflection.
01:03:07
First of all, um, I learned what we were just talking about. I learned humility and fear of being wrong and open-mindedness.
01:03:19
So, I wanted the smartest people who could I could find to stress test my opinions because I'm always realized I
01:03:26
could be wrong. And then I learned how to diversify my bets so that I could dramatically reduce my risk without reducing my returns. Okay, that was the
01:03:38
bottom. Okay, from that point all the way over that following those principles took me to the biggest hedge fund in the world, the most successful and so on because I applied it to the markets,
01:03:50
applied it to what we did and so on. So that notion of reflection and then how do you deal with what reality is like and then you know okay the learn learn
01:04:03
radical open-mindedness in other words and like there's a principle in the book you have to take in before you put out
01:04:10
or that um decision making is a two-step process first take in then decide. Okay.
01:04:18
So, yes, open-mindedness. You don't doesn't in any way minimize your ability to decide. So, you still
01:04:26
have the freedom to decide, but it's crazy not to be open-minded. You recognize that the biggest threat to
01:04:31
good decision-m is harmful emotions. And that two-step process is first learn and then make the decision. Which is funny
01:04:37
because it sounds simple, but when you said it, I think about all the worst decisions I've ever made in business. And I missed step one.
01:04:44
I forgot to I forgot to take a minute and do the evidence gathering or the like information gathering process.
01:04:50
Yeah, just smart people who care about your decision say stress test me. Why don't we do that? That ego and also instinct that that's a fight.
01:05:03
Is there any advice you would give me on becoming a better decision maker? So I have a fund, I have many businesses. Is
01:05:09
there any sort of practical simple foundations of becoming a better decision maker that we haven't talked about? Get smart people to interrogate my thinking. Um, be open-minded.
01:05:22
I think we've talked about almost all of them. Um, I think then you have to then
01:05:28
know about how to leverage yourself. Okay. In other words, as you do more and more, uh, how do you do more and more when your brain has a capacity limit, okay,
01:05:41
and there's only certain number of hours in the day or the week, okay, you have to know how to do that.
01:05:47
Is that focus or is that something? No, no, no. It's knowing how to do it through
01:05:52
others. Okay. It's knowing how to pick others and orchestrate. Well, it's like uh running a symphony or whatever. Okay.
01:06:02
get the best players. Okay, when I say uh you know um good character and good capabilities and orchestrate them well and then provide
01:06:14
that um that leverage like uh um when I was doing the most I had 30 direct reports whatever the number is. So uh it the
01:06:26
process is how to get more out of a minute or a day, not how to work harder, okay? It's how
01:06:33
to leverage yourself. And you're going to leverage yourself by picking the right people who you can trust. They're
01:06:40
not going to screw you. They're going to operate in your interest and they're going to be capable. And so a lot of
01:06:46
people what you can do is you can deal with them and then you can say like I I would deal with them on this 30 reports. I'd have maybe um an hour meeting with
01:06:58
them once every two weeks and and they go off and do things. And when you do that you can even find people who are much better at things than you would be if you did them. Because if you have
01:07:10
these different things, okay, you better because otherwise you don't have the capacity. You have these two key challenges to to overcome as an entrepreneur, which is
01:07:22
find these great capable people that have great character and then like bind them with the right culture to make sure that they do the best work,
01:07:28
right? And and in other words, it's meaningful work and meaningful relationships
01:07:35
through radical truthfulness and radical transparency. Radical truthfulness and transparency.
01:07:41
Okay. First, if you can have um meaningful work and meaningful relationships, the people are on the mission with you.
01:07:54
Wow, that's fantastic. But you you better be truthful and transparent. That'll show that you're honest and you better because you have
01:08:05
to get a truth including what people are bad at and how to deal with all those things and and most people hide them. They don't bring them out into the open.
01:08:18
Okay, they everybody's worried about hurting each other's feelings or you know uh that and then so they're not
01:08:24
honest with each other and and they're that's the barrier you we talked about the barrier of disagreement there's it's
01:08:31
like that okay um you know uh I don't know are you good at that or you're striking out if you're striking out and what is it how do we deal with it you better talk about that clearly because
01:08:43
you need to have an a team of players you know you have to work yourself so your team is an A team of players who
01:08:49
are tight. How did you do that at Bridgewater? How did you make people honest? Oh, well uh f first of all um I had a
01:08:56
policy talk behind another person's back um critically. That happens three times,
01:09:04
you're out. And then I would have radical transparency so everybody could see everything. So you could see why I'm making decisions and I would reflect.
01:09:16
But the main thing is you know you know if it's happening or not. Okay. And I made that comfortable because that's ordinarily uncomfortable. We talked about the fact that there's an
01:09:29
intellectual you and there's an emotional subliminal you. Okay. I made them understand like if I had a team a
01:09:37
football team and so on that this is going to be better for the team. is going to be
01:09:42
better for you and you'll have your evolution because what do you want to have dishonesty? Do you want people to
01:09:49
think one thing about you and really say something different? How is that going to work? So there's an intellectual okay we believe it and then also by
01:10:01
having the meaningful relationships. I mean I'm not I don't force them. I create a culture of meaningful relationships so that they have known each other for a long time. They go go
01:10:13
to each other's parties or they go to each other's there are funerals. There are baby showers. There are these things. Not
01:10:23
that anybody's f I created uh clubs. I said, "Any club that you want to create that has more than uh 20 people um whatever it is up to $500 per half." So,
01:10:39
so I don't care what it is. If it's play softball or play chess or whatever it is
01:10:46
that you're enjoying each other's company or you want to go to ball games or something, I don't care what it is.
01:10:52
I'll pay for half up to that up to $500. So I to nobody has obligations to or something but if I have that kind of meaningful relationships so you can talk
01:11:05
honestly with each other uh I found that very helpful and you've built a famously built an
01:11:11
idea meritocracy which in my understanding means where the best idea ends up winning in the company versus just your idea because you're the most powerful person in the business right I mean I want what do I want I
01:11:24
want the best idea to win This sounds simple but but again it's it's not how businesses operate. One of the
01:11:29
fascinations I've always had is that when businesses get bigger and they have more intellectual horsepower by I mean
01:11:36
if you just added up how many brains they had they sometimes get less innovative and it it feels like the the
01:11:43
CEO well because they become more more bureaucratic and more fragmented. Yeah. Okay. There's um I found it to be true and it's wellestablished fact that if
01:11:54
you get a group of people past a certain size which is 75 to 100 people um they don't know each other. Okay, they they they start to become different
01:12:07
and then you lose those relationships. You lose a lot and so on. I found it because uh um at the holiday season every year, what I would do is I would
01:12:19
write everybody notes, long notes in their cards and I would pick an individualized holiday gift for them. And when it got to be to 67 people, I remember the year, it broke
01:12:33
my back. I mean, I I just couldn't do it. Okay. And I realized that at that point I was going into another frame. Okay. And so
01:12:44
it's a organizational reality that you can keep that group and then what you have to do is then you have different
01:12:51
those different areas and you have to create cohesiveness between those different and cohesiveness common
01:12:59
mission and how do you do that between that. So, like for example, when we would have our holiday party where it
01:13:04
used to be everybody would be, you know, sort of go in and you have a holiday party and everybody together, what I
01:13:11
found out is we had a big arena that we would uh go to and I'd have both. I'd have okay um that department is in that area and whatever and then they come out and they all mingle together and so on.
01:13:24
So there's an organizational thing that you've got to realize in terms of culture and and management of
01:13:31
that. It's like villages in a city I guess like yeah you basically keep build the villages and then good example city. Interesting. Okay.
01:13:39
Yeah. Our media company's at that exact point now. It's at it's at that 90 90 odd people. Okay. There you are. So when you said 75 to 100 I was like ah interesting. Yeah. I was thinking about all the
01:13:50
things I should be doing now to counteract some of those adverse effects of the culture splintering or
01:13:55
relationships breaking down. But I guess you've described it there. Uh interesting. And I have to say one of the things I found to be most I'm 33 years old. I just turned 33 last week.
01:14:06
It's crazy how how often people say that hiring is the most important thing. Yet when you look
01:14:13
at how what entrepreneurs are spending their time on, it's usually like the product, the marketing, etc. and it's
01:14:18
maybe like one or two hours in some cases if they're lucky on finding truly exceptional people. They often just
01:14:24
outsource it to someone else, the recruitment team. When you think back through your career, how important was
01:14:29
it to find truly exceptional people? Of course. Well, I systemized it first of all. Um I think that anything I do or one does can be systemized. So I would
01:14:43
think what are the personalities, what are the backgrounds of the people that I'm hiring, what are the choices, how do I specify it? And I've and I got it by
01:14:54
also maintaining a lot of data with people. There's um there's a TED talk I did that uh explains how like data uh everybody's going around and they're
01:15:06
operating in a certain way. So I know what people are like. If you know what people are like, you know what you can
01:15:12
expect of them. And then I would then say uh in a very data way, those people who are successful in these jobs have the following attributes
01:15:25
that would create a job specifications for that type of job. So I I knew that in that type of job there would be that type of person I'm looking for. Okay. what works they work okay data and
01:15:42
then I would find that would be my job spec and and so we had the systems and then we had some people who are responsible for doing that because you're right it takes time how can I
01:15:55
interview all those people and so on but who can you trust and you're operating that way and then evaluation process
01:16:02
doesn't stop when you hire them okay the valuation process continues from that moment and you still learn more about what they're like and you do that same process and still think would I still
01:16:16
have hired them and and if I wouldn't have hired them you know in the first place then they shouldn't be there and so I have a process and people people in
01:16:27
process do people change after a certain point so if you've hired someone in six months and 12 months and they haven't changed
01:16:32
is it worth giving them another year is it worth a performance review I found out that
01:16:38
for me the big question mostly there were two big questions but um the big question is how do you adapt to my culture
01:16:49
and that would take about 18 months to find out like can you speak honestly about what can we have thoughtful disagreement do you like this evolutionary process where you're
01:17:00
challenged and all of this kind of thing that culture that' take about 18 months
01:17:05
and then roughly speaking then learning about the people their strengths and weaknesses would take 18 months two two years maybe something along those lines and so then
01:17:20
you know you could pretty much decide but always being open every day by day so nobody's surprised that you're always talking about things you know how's it going
01:17:32
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01:17:38
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01:19:13
code diary. AI is um a bit of an alien that seems to have entered the room um and has is going to change more almost every every industry. Great.
01:19:24
Yeah. I can't tell if you're being sarcastic. No. Truly, if you are um working with
01:19:30
it, controlling it, if it's a good partner to be able to get a lot of leverage, it's truly fantastic. As I said in almost everything I did, we had
01:19:43
the criteria, we had the systemized. Would you do that? Would you not do that? How do you know how does reality
01:19:49
work? What are the principles? And and so it's a fantastic leveraging like I described. You know, I would make the decision-making model like the computer chess game that would make it. Well, now
01:20:02
it's better than uh ever those those resources. So it leverages you enormously. What about having a strong middle? We talked about having the strong sort of economic political middle.
01:20:12
Political middle. Yeah. Yeah. Is it going to drive inequality? Yes. It's going that's like all good
01:20:18
like all things. going to be um it has good things and bad things and we were talking let's say first about managing and doing that I think in managing and
01:20:30
knowing what people are like and how they're all it's going to be very valuable mostly very valuable in terms of changing um there'll be uh a limited
01:20:42
number of winners and a bunch of losers and um I think it's going to create much
01:20:48
greater polarity which as we're seeing um through the system the ways that we talked about you know that top 1 to 10%
01:21:00
benefiting a lot and that you know so that will be a dividing uh force I think it's got to got to pose the question with robotics accelerating at the speed of of light with optimist and Tesla and
01:21:12
all the things they're doing and all these other companies humanoid robots and then with artificial intelligence
01:21:17
having trillions of dollars plowed into it and accelerating. We're in this crazy boom at the moment. With these two
01:21:23
things combining, you're going to be able to have a humanoid robot who that can navigate human spaces, but is also
01:21:28
smarter than I am. Lawyers, accountants, uh lots of people in the medical profession. Why would you why would one need them if we had a humanoid robot
01:21:41
that is smarter than all of us and has a PhD and everything? Well, we will not need a lot of those jobs for the reasons
01:21:48
that you're saying. Okay. And then the question is what our society does and what do you think we do in such a world? I think we fight over about what we do
01:22:02
unfortunately. Um but as I say I I don't think we have escaped a world where most people to have a healthy society most people have
01:22:15
to be productive and prosperous. I don't I I think people need to be now certainly there and there certainly needs to be a redistribution
01:22:28
policy. I don't think that's just a redistribution of money policy because uselessness and money may not be a great combination.
01:22:40
So I think that you have that has to be figured out and the question is whether we're too fragmented to figure that out and agree on it and I'm worried about
01:22:51
that. Interesting times. Is there any historical precedence for this in your view? Someone that knows history. Is there any historical precedence for something like AI and robotics converging? Well, um
01:23:05
through um evolution, we have gone from a period of time which was called the dark ages or the
01:23:16
agricultural age in which um basically there was land. it's agricultural and so on and people were treated they were
01:23:27
essentially like oxen most people and then there were the landowners who were the nobles and then there were the
01:23:33
royalty who uh were the families that control most things and so on and then in history with the uh invention of the printing press there became more
01:23:46
knowledge um uh more intelligence and we see an evolution in which um you start to see new ages emerge and thinking emerge and
01:23:59
power change and I won't take you through the whole history but you start to see that individuals can be clever
01:24:07
enough to earn money that so you begin the age of exploration and the industrial revolutions in which machines replaced people and it's almost like
01:24:21
they first replaced them physically that um in other words they didn't have they
01:24:26
were not like oxen doing the thing so you get a tractor or something and and it's almost like from the body up in terms of the mind and so you've seen
01:24:38
that evolution through time and the rise of intelligence in its various forms go
01:24:44
through this arc of rising in intelligence and now you see that intelligence matters more than anything. Okay? It matters more than money. It matters more
01:24:57
than anything because intelligence will attract people among those with money to
01:25:02
invest in them in the development of that. And so we have seen this arc through history develop in that way, right? And we've seen people replaced.
01:25:13
Now the question is as we get higher and higher in thinking, okay, whether we've
01:25:20
run out of capacity to shift or whether we're just going to be totally replaced.
01:25:25
Our muscles have been totally replaced, but okay, as this is happening, our best thinking may be totally replaced and
01:25:33
we're going to have to deal with that question. Are you hopeful? I'm excited. I'm
01:25:45
I think it all comes down to human nature. Okay. I'm excited in that. Fast forward, make the most of it, jump on it. Woo! You know, I'm excited. I've
01:26:01
also watched uh the evolution of species. Almost all species have come and gone for certain reasons and they uh one of
01:26:12
the reasons that they come have come and gone is because almost their strengths are not in all respects great strengths. you can use these things, intelligence
01:26:24
to your detriment. And I believe that um the things that these technologies and so on bring us while very important, it extends life
01:26:36
expectancy and all of that is not import as important as human nature. And so if you were to go back in time and we're at different societies, do you
01:26:49
have happier societies? Is the well-being greater? Okay. So you can go 50 years ago and you
01:26:57
might say the well-being is greater 50 years ago. Not in all ways, not in in many ways the technologies and the consequences of those are much better, but you may have had a better life. And
01:27:09
it's human nature of how people are going to deal with each other. So I think the real question is can people rise above this and and which it goes back to the
01:27:22
spirituality question. Can people then rise above it so that they think of the collective good and they think of you know collectively how do we make the
01:27:34
best and also karma you know in other words um the realization that if I help you in ways that can be so simple for me to help you make such a big difference in your life and you do the same and we
01:27:48
have win-win relationships it'll be good but if we don't do that And I worry about human nature and I worry about this process, especially when you've got geopolitical
01:27:59
tensions. And it's because of human nature. I've had a lot of conversations on the
01:28:04
podcast about AI and I just can't seem to get to my own solid conclusion about this because when I look at human
01:28:10
nature, as you say, I see greed, I see power, hunger, status. Yeah. Some problems you just just accept
01:28:17
the fact that you may not be able to be confident about a prediction in the future. So, it'll always be a question
01:28:23
and just get on with the fact of using it for yourself in the best way that works for you. That's what I'm doing. We have a closing
01:28:29
tradition on this podcast where the last leaves a question for the next not knowing who they're leaving it for. You know this person um because I've seen
01:28:36
you with them. Um the question they left for you is what is a book or books that
01:28:42
you've recommended or gifted more than others and why? can't say your own but right um there are three books there's a book on evolution written by
01:28:56
Richard Dawkins uh river from Eden I think it's called then a book by um Will and Ariel Durant which are the maybe the greatest historians
01:29:12
in time and it's called lessons from history it's a very short book. I think it's 104 pages. They wrote massive amounts about 5,000 years of history and
01:29:24
so on. And they sort of condense their lessons, lessons from history. And then um Joseph Campbell's The Hero's Journey.
01:29:37
Is it the the hero with a thousand faces? Yes, that's it. Hero with a thousand faces.
01:29:42
And why Dawkins book? Why did you say that one? Oh, he understands evolution. Everything is evolving. Okay. All
01:29:50
species. Man is one of 10,000 species. I mean, and they're and they're all structured similarly. There's a structure. They they you know, like um two eyes, a brain that has a structure
01:30:04
to it. Um that and the same parts of the brain. There's the cereum, the cerebellum, the prefrontal cortex.
01:30:10
there's this structure that makes you think differently and and so on. There's evolution. There's all evolution. So,
01:30:17
it's not just limited to um human evolution or what humans are like. It's the force of evolution. Man is only um mankind's only about 200,000 years old.
01:30:30
That's in history that's short. Okay. And and the species and all species evolve. Okay. And it's very interesting. So that's And you know
01:30:40
that's what his books are about and you know I think they're very good and Joseph Campbell's the hero's journey
01:30:45
the hero with it's it's about human nature and and the evolution of life and the life journey that we're talking about. What I find so interesting Ray is how you draw on principles from other
01:30:57
domains whether it's from nature or biology as you were talking about there to tie into your work in business and
01:31:04
investing and everything else and life and happiness. And it really says something to me about
01:31:11
being more eclectic and be broadly curious in order to be successful in my more narrative. Yeah. I just see I I don't Is that to me maybe too much of a
01:31:22
specialist kind of mentality but the world is being interrelated to these things if you want to understand how
01:31:29
reality works. Um you can't say I'm going to be just a specialist. I mean these are all affected by each other. Thank you so much for write writing
01:31:41
these books. They are iconic and uh the YouTube videos that explain these these books are iconic. I don't know who you have on your team that makes the animations and pulls it all together.
01:31:52
But not only is the content so important because they are principles, so they're enduring through time, but they're so
01:31:59
unbelievably accessible to all people of all ages. And if if you if people haven't read this book, I'd be shocked.
01:32:04
But um all of these books are fantastic. The this book, Principles by Ray Dalia, which I'm going to link all of them
01:32:10
below for anyone that wants to read them. I suggest you read them all, um will be formative in your life, even if you're not interested in business or
01:32:16
investing because as as it says on the book, they're principles and the the economy affects us all in ways that we
01:32:21
might not understand. We're all trying to be successful or happy in our own right. And that that's interwoven into all of these books. So, thank you. I
01:32:27
hope you write more books. Well, and thank you because yeah, I'm at a stage in my life, this is a symbiotic
01:32:32
relationship otherwise we wouldn't be here. Okay. And my um my benefit is that I want to pass along these things and we're doing it together. And I have found and it's joyous to me to know that
01:32:45
these things have made a big difference in people's lives. People come up to me and they say, "Thank you for the
01:32:50
difference you've made." And you know, at this stage in my life, that's what I want to do. I think that's an understatement. I think it's had a profound impact. In
01:32:56
fact, every person I know, all of my best friends have taken something from your work which has had a profound
01:33:01
impact on their decision-m which has led them to be happier in some way. And when I told my friends that I was interviewing you, I'm interviewing 16
01:33:08
people while I'm in New York over the over the next month. When I told my friends, my best friends in the world, that I'm interviewing you, all of them
01:33:15
were telling me to pass on a message of thanks because there's something in one of these books that's helped them. And
01:33:20
they're all young people in that first season of their life. And there's there's something in all of these books that's um pushed them closer to their
01:33:26
success and their happiness. So, thank you for on behalf of me because you've had a profound impact on me. But thank you. Thank you for giving me that joy.
01:33:33
You know that. Thank you. I really really mean that. Thank you so much, Ray. [Music]