We’re very lucky that a person like Ray Dalio Sir is interested in sharing his learnings with us. What a book, yet again!
Before “The Changing World Order”, I had luckily stumbled upon “Principles” by him, and it turned out to be a book which really opened my eyes. Amongst many things, it made it very clear why Ray Dalio Sir is indeed the “Founder of Bridgewater Associates, the world’s largest hedge fund”. It is no accident that this person is so successful. He really is a machine.
In this book, Ray Dalio Sir explains that the game he plays, “requires (him) to understand what is likely to happen to economies better than the competition”, and says that in his 50 years of wrestling with the markets and trying to come up with principles for doing it well, he’s learned that, “one’s ability to anticipate and deal well with the future depends on one’s understanding of the cause/effect relationships that make things change, and one’s ability to understand these cause/effect relationships comes from studying how they have changed in the past”.
This man studies the past and based on that, literally makes “algorithms” on how he’ll handle the future. Every move he makes is deliberated based on these “mental models” and is weighed neatly in terms of risk and reward. There’s little scope of him going wrong, because even that posibility is factored in his decision making, and is “hedged”, so to speak.
This is how the world of macro investing is supposed to work, but Ray Dalio Sir epitomises it even in regular life. He personifies it. Literally embodies it. Does it take the fun out of living? Looking at everything so “mathematically”? I don’t know. But he does it to T anyway.
In this book, Dalio Sir talks about how empires rise and fall, and how that affects the “economic machine” of the world. He explains how things that are happening today have had their versions play out in the past, first when the Dutch ruled the world economy, then got replaced by the Brits, and now the Americans. He says, while the world might change, human beings, essentially, remain the same.
The western economy aside, Ray Dalio Sir also shared his thoughts and research on China, which he believes is the natural successor to the American hegemony. While we’re screwed if that happens, Dalio Sir is big on China, both intellectually and financially.
The book is divided in three sections, appropriately titled with the grandiosity best suited to Ray Dalio Sir. They’re called:
Part 1: How the world works
Part 2: How the world has worked over the last 500 years
Part 3: The future
Just reading the index is enough to make one understand that the sheet is serious. Ray Dalio Sir isn’t kidding around. And he doesn’t.
While the book is obviously dense and has a certain, balanced seriousness quite characteristic of Ray Dalio Sir. He’s made it as simple as it could have been. He’s like a master interested in teaching little kids on how they can play with the world, and win.
Great book! :)
P.S. You just read an honest (and hopefully valuable) article for free. If you like reading my writing, please consider making donations. Amounts don't matter, gestures do. Here's a big cheers to all my Patrons!
Read more articles here.
Comments