market folly

Bridgewater Associates founder Ray Dalio gave a TED talk on what idea meritocracy looks like at his hedge fund.

The talk focuses on how to build a company where the best ideas win.  Dalio talks about algorithmic decision making and his history as an investor and how he began to learn from his mistakes.

He would write down his lessons and it became a set of principles which eventually were developed into algorithmic decision making.  Dalio has also recently published a brand new book, Principles.  

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."

Embedded below is the video of Ray Dalio's TED Talk:



Be sure to also check out Dalio's brand new book, Principles.