Ray Dalio on His Biggest Failure

Video Description

In the late 1970’s, I calculated that we were going to have a global debt default. I was so confident in what that meant for the markets that I went to Congress to share my perspective. I couldn’t have been more wrong. While several countries defaulted on their debt, the impact on markets was the opposite of what I expected. And I lost a lot of money — for me and for my clients. I had to let all of my employees go. But it was the best experience that ever happened to me because it taught me that pain + reflection = progress. And it taught me three lessons that became the foundation of Bridgewater’s success. 1) It gave me humility — the fear of being wrong was so strong that I had to always ask, “How do I know I’m right?” 2) It taught me the power of diversification — and how 15 good, uncorrelated return streams could lower risk by 80% without impacting returns 3) I realized I wanted an idea meritocracy