He notes, "In order to be an effective investor, one has to bet against the consensus and be right."
Dalio walks through the biggest mistake he ever made and how it made him ask himself in any future decisions: "How do I know I'm right?" He gained humility.
The Bridgewater founder also takes us inside a meeting at Bridgewater and shows how they collect data on each person's ideas and believability. Dalio says they do this because people naively and arrogantly hold opinions in their mind that are wrong. But if you zoom out and gain perspective, you can see things through everybody's eyes and view things collectively.
"Collective decision making is so much better than individual decision making if it's done well. It's been the secret sauce behind our success."
What I found most interesting about this talk was the discussion about the reliability of opinions. It is very difficult to form an unbiased opinion of someone else’s decision-making skill and whether they are objectively right. The conclusion is complicated by the fact that we all possess different strengths and weaknesses which means we are better at making some kinds of decisions that others or that we are more creative in certain fields that others.
It makes eminent sense that valuing the attributes of people be subjected to clinical algorithms because it is only by building a team of different people with varying attributes that an organisation can hope to gain a fuller understanding of any problem. If algorithms are used to pick baseball and football teams then doesn’t it also make sense to base other business decisions on similar metrics? It also offers a window into the kind of artificial intelligence that is being used to target us for advertising but will in future also form part of the assistive technology now in development.Back to top