Book Review — Principles by Ray Dalio

This evening I finished Ray Dalio’s “Principles: Life & Work”. Ray is the founder and chairman of Bridgewater Associates, the largest hedge fund in the world with over $160 billion assets under management. For perspective Nigeria’s record budget is $28 billion. :)

Ray divides the book into three parts — his personal and entrepreneurial journey (autobiography), his principles about life, and his principles about work.

I loved the first part a lot. His humble journey investing at a young to building an investment management firm that now serves global foundations, governments and central banks around the world.

I love that unlike many others, the author genuinely believes that his success isn’t due to anything special about him but due to the many mistakes he’s made along the way, the people who have helped him, some stroke of good luck along his way and the principles he’s been able to imbibe. These principles are what he considers the most important in his journey and he believes most people can benefit from.

You will learn about how his early successes puffed him up and made him reckless in the market. This led to a near collapse of his company. After 8 years in business, he was left with nothing to show for it. His entire staff left and he was left with his wife and two young children to support. A true fork in the road.

One of the things that stands out about Ray for me is his consistency in writing. He started a series of writings called Daily Observations. It started as a means of informing his clients about happenings in the market so they can better understand their logic in playing in the market. Today, more than forty years and ten thousand publications later, it is still read and reflected upon by clients and policymakers around the world.

He explained how his contrarian approach to the market made him over 40% returns during the 2008 recession while major hedge funds around the world recorded losses. I have been reading a lot of his takes on investments during this coronavirus pandemic as I can see that Bridgewater’s hedge fund took some beatings; it’s down up to 20%. 🤷🏽‍♀ BTW, y’all need to watch his video titled How the Economic Machine Works on YouTube.

Some of the principles he espouses are great. The importance of governance in a company. The unfamiliar concept of idea meritocracy. The 5-Step Process. I especially appreciate how he speaks about being radically open-minded and his take on how to significantly raise your probabilities of making the right decisions by open-mindedly triangulating with believable people.

I admire his approach to philanthropy and how almost every member of his family is caught in this giving web. His first son is into inexpensive, effective computing to the developing world. His second son is into giving towards mental health. His son’s wives are into fighting climate change and animal welfare. His own wife is into providing education for detached and disengaged children. He is personally passionate about ocean life, while as a family they support among other things veterans with PTSD.

I think that generally the book did not live up to the hype. I have had it on my to-read list for a while and every mention of it on social media I see imply I’m missing a great deal. 5 star reviews on Amazon and GoodReads added to my anticipation. But after finishing it, I didn’t feel like I would have missed a great deal if totally skipped on this book in this life.

Oftentimes I asked myself why this was not produced as a long article for the New York Times or Financial Times, instead of such a lengthy book as I found large stretches of it full of information you can get and are available on Fela Durotoye and Tony Robbins’ desks.

The first part of the book was really good but the other parts were really disappointing and I think it’s because they were poor attempts at self-help. Alas, unlike folks like Jordan Peterson and James Clear, the author didn’t support a lot of his theories with relatable examples on how they work in real life. For instance, he speaks a lot about turning weaknesses into strengths but did not tell the reader what weaknesses he turned into strengths as he climbed the ladder of success.

Also, the principles and sub principles are so many that I wondered how he expects the reader to concentrate, not to talk of applying them. To his credit, he mentioned that he intends the third part to be a lifelong reference, but apart from the fact that same can be said of the second part, how can the third part be a reference when it is difficult to get through in the first place.

But I can understand how the publishers fell over themselves to put this on the market. He is a billionaire who has achieved remarkable feats in global investments and there is no way a book from him would not garner fans.

That said, I would repeat that I enjoyed the first part of the book, but at best the second and third parts would only appeal to much established and successful individuals. I already have two of such people I would like to send this book to.

Still, it’s the least favourite book I have read this year. I have already read some incredible books this year and it’s a shame this spoilt the great flow.

But may be COVID-19 is to be blamed for my poor choice this forgetable March/April.