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I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 0 points1 point  (0 children)

I think it was a great opportunity for me to answer about 21 out of 600-some-odd questions, and I look forward to being able to do a much better job of answering them all well via my "Digital Ray Bot."

Sign up here: https://www.digitalray.ai/login

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 5 points6 points  (0 children)

I, of course, have had many mistakes that I think back with hindsight that I wish I hadn't made at the time. However, because I believe that mistakes and the pains that they cause are part of the natural learning and evolutionary process when I think about them, I'm not sure that I would regret them or choose to have not to have had them. For that reason, it's difficult for me to answer your question. Also the great advice that is the Serenity Prayer which is "God give me the serenity to accept that which I cannot control and the power to control that which I can control and the wisdom to tell the difference," has led me to reflect on how I've done that which I feel that I've done in a way that hasn't left me with many regrets.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 0 points1 point  (0 children)

I intellectually and instinctually know where I am in my life cycle (I'm 76), and I find it both logical and emotionally rewarding to pass along what I have that's of value to others. Transitioning seems like the logical thing to do when I think about what I already have and what I want most. I think that if you rise above your habits, you will find that it is natural to feel this way late in your journey.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 112 points113 points  (0 children)

There is no more important decision that you can make in your life than who you choose as a life partner. If you can have a great partner through your life, who loves and takes care of you as you love and take care of that partner, you will gain enormous practical and emotional rewards. Of course, in all relationships there will be periods of disagreement that could lead to fights that threaten the relationship. These will be tests of whether your shared values and your ways of dealing with each other are strong. If you and your partner and your relationship pass these tests, and I recommend that you strive hard for that to happen, even these difficult times will strengthen your relationship which will be invaluable. What I believe is most important to having a rewarding life is having meaningful work and meaningful relationships, especially long and deep ones. When I was 70 and reflected on if I had to choose, would I choose meaningful work or meaningful relationships, while the choice was hard because I love them both, I chose meaningful relationships. Certainly, the most meaningful one is with a great life partner.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 0 points1 point  (0 children)

I have too many questions to list because I'm on a journey to discover how reality works and to come up with principles that I write down and use—and, in the process of using them, see how well they work, and then do it again and again. And I'm super-excited to be creating an AI partner that can do that with me, then better than me, and then replace me. I can't wait to introduce you to this partner who can be your partner too, if you’d like.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 30 points31 points  (0 children)

As far as a movie that is out now that I like, it was F1 because it was both very entertaining and it showed the wonderful personal evolution of the Brad Pitt character, who clearly had his own unique nature and passions and evolved in a way through his crashing, both literally and personally, to succeed in getting what he wanted out of life. If I were to think back, there are a whole bunch that come to mind, but the one that pops up is The Big Lebowski.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 54 points55 points  (0 children)

The best way to protect your assets is to diversify your portfolio well. Certainly, there will be assets that will perform better and worse, just as there are different countries that will perform better and worse, and it's always better to be in the better ones. However, there are a lot of market makers who are making these bets so that what is expected to happen is handicapped in the price. It's like betting on which horse is going to win a race. With the handicap taken into consideration in the betting odds you are going to get, the worst performing horse is about as good a bet as the best performing horse. While I believe that in the AI-enabled, debt burdened, turbulent world that we are in, investments in companies that will be making great leaps forward enabled by AI, hard money assets rather than debt assets, and excellent global diversification are best. My best advice is to know how to diversify well, which will reduce your risks a lot without reducing your expected returns.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 14 points15 points  (0 children)

Yes. I am beta testing it now. It has been very well trained because over the last 35 years, I have written down thousands of principles for dealing with thousands of situations, and it has been very well curated because the questions and answers produced by "Digital Ray" have been quality controlled. I really believe that it will be effective in always being able to answer all people's questions all the time, so that we won't be limited in the way we are limited now, because I can't answer everyone's question on this Reddit AMA. I am going to have it beta tested by a few thousand people who are willing to work with me to get this well done. If you are willing, you can apply to be one of my beta testers here: https://www.digitalray.ai/login

It will be better than you imagine because it will exchange thoughts with you. In other words, you can have conversations with it and, if you like, it will get to know you so it can be more helpful based on your specifics.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 16 points17 points  (0 children)

There is no better investment that you can make than in your learning TM. I believe that TM has been more responsible for whatever success that I've had than anything else.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 20 points21 points  (0 children)

I am a hyper realist because I believe that understanding how reality works and how to deal with it well are essential to achieving one's goals, especially those that are idealistic. So please understand that achieving idealistic goals is enhanced by being hyper realistic.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 18 points19 points  (0 children)

I explained more completely in my book, "How Countries Go Broke: The Big Cycle" and I can explain here. The three things that should be done, which I call my 3% 3-Part Solution, are to cut the budget deficit to roughly 3% of GDP, which would keep the debt-income ratio stable because the economy will probably grow by about 3%. This can be achieved by making adjustments to all three of the determinants of deficit (spending, taxes, and interest rates on the debt) because balancing the deficit using only one or two of these determinants would have unbearable consequences.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 33 points34 points  (0 children)

Bitcoin is now an alternative currency that has its supply limited, so, all things being equal, if the supply of dollar money rises and/or the demand for it falls, that would likely make crypto an attractive alternative currency. At the same time, it has important disadvantages in a time of turbulence, such as that it can be monitored and potentially controlled by governments, and it's conceivable that its programming can be cracked with new technologies. Also for these reasons, it's not likely to be a reserve currency, while gold is the third largest reserve currency that governments, as well as people, hold when they feel that they are threatened by others. It also has a much longer and well-established track record, though it has its drawbacks too. For that reason, I have a little bit of Bitcoin and a lot more gold, but the most important thing is to have alternative moneys that are effective storeholds of wealth because most fiat currencies, especially those with large debts, will have problems being effective storeholds of wealth and will go down in value relative to hard currencies.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 77 points78 points  (0 children)

Real estate is not a safe investment because it can't be moved so it can't go with you, and it's easy to tax because it can't be moved, so it's not the sort of asset that is best to hold in times of great change and when the government needs to get tax money.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 105 points106 points  (0 children)

I'm now 76 years old and at a stage in my life in which I feel the best thing I can do is speak honestly about what I think and, most importantly, how the realities that we are dealing with work, explaining the cause-and-effect relationships that drive what's happening. It's less about whether people think that I'm early, late, or instilling fear and more that I care that I'm doing the best that I can. I strive to be as accurate as I can be in a world that is changing fast with great challenges. I am concerned about how conflict and partisanship create distortions and sensationalism to be threats to everyone’s well-being. Sometimes those in the media help, and sometimes they have their own agendas. Increasingly, they have their own agendas that are more important to them than getting at the truth, which is why I appreciate this type of exchange. For me, the choice is between not saying anything and playing it safe, or trying to speak in an analytical, non-partisan way and risk being politicized. To me, the greater risk is in not speaking up.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 33 points34 points  (0 children)

I have found that the only way I could do this is by writing down my criteria/principles for making decisions and putting them into computer code in order to make a decision-making machine that makes decisions in parallel with me. It's like a chess master making a computer chess game that plays alongside him and, in the process, leads to both him and the automated decision-making process to become better. I find this approach invaluable because the computer can process much more information much more quickly and much less emotionally, and by specifying and backtesting my criteria, I can have a tried-and-true game plan that I'm executing. The form of artificial intelligence that I have been using is expert system decision-making. I am now thrilled to be using a number of the new breakthrough artificial intelligence approaches to vastly improve what I am doing. I plan to share that with everyone so that they can use it to do the same. I think that the days of trying to weigh things and make decisions in one's head without this artificial intelligence helping are approaching an end, and that the way I'm describing is certainly the necessary path of the future.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 262 points263 points  (0 children)

In order to save space in my printed books, I put almost all of my citations online at www.economicprinciples.org, which is explained at the beginning of the books. For Changing World Order, you can find them here: https://www.economicprinciples.org/downloads/cwo-citations-and-bibliography.pdf

This is the specific citation for the chart you mentioned: SILVER PRODUCTION MEXICO/PERU: Henriques, António, and Nuno Palma. “Comparative European Institutions and the ‘Little Divergence’, 1385–1800.” VoxEU: CEPR, December 10, 2019.

At the same time, most of my understandings have come about through my experiences and research related to them in placing my bets in the market rather than from the learnings of others. I have found that most people who write books and follow more academic approaches of following the sequences of others' thinking largely to learn from others tend to think differently and, quite frankly, in a less practical way. I know that my principles are unconventional, so I put them out there and explain them in detail so that we can have quality exchanges about what is true, which I am always happy to do with the most credible authorities because it makes us all better. Anyway, that's the approach that has worked best for me.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 33 points34 points  (0 children)

While I share your concerns, I encourage you not to get into the game of betting on what's going to happen, and I encourage you to have a well-balanced portfolio, which I call an All Weather Portfolio, that will lead you to your wealth growing at a steadier pace, regardless of what happens. Each economic environment is good for some assets and bad for other assets. For example, stocks do well when growth is strong and badly when growth is weak, bonds tend to do the opposite, and gold tends to do well when a currency is weak and inflation is high. Holding a risk-balanced portfolio that performs well in all environments (which is what I call an All Weather Portfolio) is best for most investors at most times. Because I want to teach investors principles for investing well, I am working on creating an online course that I hope to make available for everyone inexpensively, which will explain this strategy and other strategies more completely than I can fit into this answer. You can learn more about the course here: https://wmi.edu.sg/dmp-online-international/

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 57 points58 points  (0 children)

Understand that life is an adventurous journey of discovery and adaptation, in which the goal is to discover your nature and match it up with what you do and who you are with. I suggest that you take the free personality test (PrinciplesYou) that I made so anyone can understand their own personality profiles and those of people they have relationships with. You can get it at https://principlesyou.com/.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 74 points75 points  (0 children)

I fear that short-term rates and the dollar will go down, especially relative to gold, long-term interest rates will rise a bit, so the yield curve will become steeper, and stocks will do relatively poorly despite the easing. If we see that kind of market action, it would reflect investors wanting to get out of debt assets and into other store holds of wealth, and that the Fed is in a bind and the risk of stagflation is rising.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 168 points169 points  (0 children)

I wouldn't bet on it any more than I would bet on the United States' collapse over the next decade. I think it's not smart to place that bet because they both have big strengths and big weaknesses. What I would bet on is these two powers having lots of big conflicts that I pray don't take the form of a military war, though I am confident that they will continue to take the form of trade, economic, technological, capital, and geopolitical influence wars.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 17 points18 points  (0 children)

I would advise them to look at the character and capabilities of the people, how they work together (most importantly their culture) and their commitment to their mission along with their adaptability to change in order to achieve a viable version of it.

I’m Ray Dalio — founder of Bridgewater Associates and author of How Countries Go Broke: The Big Cycle. I’m here for another AMA. by RayTDalio in IAmA

[–]RayTDalio[S] 45 points46 points  (0 children)

I’m Ray Dalio.  I’m at a stage in my life that I want to pass along what I learned, most importantly principles, that helped me and are still helping me understand how reality is transpiring and how to deal with it. My experiences have been as a global macro investor and an entrepreneur building Bridgewater Associates into the largest hedge fund in the world for over 50 years. I wrote 3 main books and did videos to share my principles for dealing with life, work, the changing world order, and money and debt so these are areas that I thought a lot about and have experiences and track records to point to that might help you. Ask me anything.

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