Ray Dalio’s Post

With a lot of very interesting and important things going on, I find myself reflecting and writing more. My latest piece, The Loss of Trust in the Democratic Party and Next Steps, deals with the latest developments affecting the domestic political order. The article looks at the issues pertaining to the Democratic Party choosing its leadership, which is the latest important issue that will affect the domestic order. At the end of this piece, I ask three questions which I'd love you to answer. Of course, your more extensive thoughts in the comments are always welcome.  

Many complaints either fail to take into account the full picture or reflect a closed-minded point of view. They are what I call "chirping," and are generally best ignored. But constructive complaints may lead to important discoveries. #principleoftheday

When I refer to your "ego barrier," I'm referring to your subliminal defense mechanisms that make it hard for you to accept your mistakes and weaknesses. Your deepest-seated needs and fears--such as the need to be loved and the fear of losing love, the need to survive and the fear of not surviving, the need to be important and the fear of not mattering--reside in primitive parts of your brain such as the amygdala, which are structures in your temporal lobe that process emotions. Because these areas of your brain are not accessible to your conscious awareness, it is virtually impossible for you to understand what they want and how they control you. They oversimplify things and react instinctively. They crave praise and respond to criticism as an attack, even when the higher-level parts of the brain understand that constructive criticism is good for you. They make you defensive, especially when it comes to the subject of how good you are. #principleoftheday

If you and others don't raise your perspectives, there's no way you will resolve your disputes. You can surface the areas of disagreement informally or put them on a list to go over. I personally like to do both, though I encourage people to list their disagreements in order of priority so I/we can more easily direct them to the right party at the right time. The nubbiest questions (the ones that there is the greatest disagreement about) are the most important ones to thrash out, as they often concern differences in people's values or their approaches to important decisions. It's especially important to bring these issues to the surface and examine their premises thoroughly and unemotionally. If you don't, they will fester and cause rot. #principleoftheday

It is harder to run an idea meritocracy in which disagreements are encouraged than a top-down autocracy in which they are suppressed. But when believable parties to disagreements are willing to learn from each other, their evolution is faster and their decision making is far better. #principleoftheday

God Bless America on this 4th of July While I love this day with my family and friends, savoring a classic July 4th BBQ, drinks, and camaraderie followed by all of us watching a big fireworks display, I also can't help but feel for and reflect on the America I know. Because I was born in 1949, which was four years after World War II ended and at the start of the new world order (the American world order), I rode the wave up, living the American Dream in the land of opportunity when it was at its best. I was weaned on equal opportunity, economic and political freedom, rule of law, and democracy, and I was fortunate enough to have parents who were of the greatest generation, who overcame The Depression, fought in the war, and gave me a strong upbringing that included a good public-school education that allowed me to take advantage of the equal opportunities to live the American Dream. While it was never perfect in providing that to everyone, I felt that it always had the moral beacon and fundamentals to be great and continue to improve. You can hear in my description my deep-seated beliefs about how America and its people should be.  I also saw the generation that came after the greatest generation (i.e., my generation) run up government debt, let the country’s infrastructure break down, allow huge polarities in opportunities and living conditions to develop which led to pervasive economic and social inequalities, homelessness, mental illness and drug problems, and the relative decline of America’s economic, military, and moral leadership in the world. It is surrealistically shocking to me to see the condition the United States is in, such chronically horrendous leadership that has reached an apex in terribleness that is reflected in our two presidential candidates, our representatives in Congress, and how they deal with each other. They are so unimaginably worse than I ever could have thought possible.  Having experienced nearly one whole big cycle of up and down and from studying the patterns and causes of history, I worry about what might be ahead (what I call “Stage Six of the Internal Order Cycle,” where the rule of law breaks down and there is some form of civil war). That is why I pray to God that this is just another one of those times of darkness that is just before the dawn of America’s rebound—and that God will bless America. 

Ideally, someone other than you should be objectively measuring and reporting on your progress. If you're not hitting your targets, that's another problem that needs to be diagnosed and solved. There are many successful, creative people who aren't good at execution. They succeed because they forge symbiotic relationships with highly reliable task-doers. That's all there is to it! Remember that all 5 Steps proceed from your values. Your values determine what you want, i.e., your goals. Also keep in mind that the 5 Steps are iterative. When you complete one step, you will have acquired information that will most likely lead you to modify the other steps. When you've completed all five, you'll start again with a new goal. If the process is working, your goals will change more slowly than your designs, which will change more slowly than your tasks. One last important point: You will need to synthesize and shape well. The first three steps--setting goals, identifying problems, and then diagnosing them--are synthesizing (by which I mean knowing where you want to go and what's really going on). Designing solutions and making sure that the designs are implemented are shaping. #principleoftheday

In the long run, it saves time by increasing efficiency, but it's important that you do it well. You will need to prioritize what you are going to get in sync about and who you are going to get in sync with because of time constraints. Your highest priority should be the most important issues with the most believable and most relevant parties. #principleoftheday

I’ve been hearing from many of you that you find it difficult to give critical feedback, so I wanted to share some of the principles that have helped me to do it throughout my career. #principleoftheday