The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds

Chapter 1

The Global Macro Maven

Ray Dalio

Bridgewater Associates

Above all else, I want you to think for yourself—to decide 1) what you want, 2) what is true and 3) what to do about it. I want you to do that in a clear-headed thoughtful way, so that you get what you want.

—From the introduction to Ray Dalio’s Principles

In his famous Principles, Raymond, or “Ray,” Dalio tells his employees, “You learn so much more from the bad experiences in your life than the good ones. Make sure to take the time to reflect on them. If you don’t, a precious opportunity will have gone to waste. Remember that pain plus reflection equals progress.”

This is just one of the many aphorisms, precepts, nuggets of wisdom, and practical management tips that the 62-year-old Dalio—the founder of Bridgewater Associates, the global macro fund that is the world’s largest hedge fund, with $120 billion under management—emphasizes time and time again. Bridgewater advises and runs portfolios for the most powerful pension funds, central banks, and countries around the world. In fact, a recent study by London-based research firm Preqin shows that Bridgewater is the most popular hedge fund among public pensions.

If you did a quick search on Dalio, you’d be flooded with stories of his firm’s success in the markets (including generating its best returns in the most difficult markets of the last decade) and get a fair dose of his philosophy on life and management. For example, Dalio has been practicing transcendental ...