Principles

“Being so wrong—and especially so publicly wrong—was incredibly humbling and cost me just about everything I had built at Bridgewater. I saw that I had been an arrogant jerk who was totally confident in a totally incorrect view.”

Throughout Principles, Dalio encourages readers to view mistakes in a positive light. Early on in the book, while describing his background and the early years of Bridgewater, he recalls mistakenly predicting that there would be a major depression in the 1980s. He openly admits that his claim was a terrible mistake caused by his own arrogance. By sharing this story with readers, he demonstrates the willingness to admit and learn from mistakes that he recommends readers practice.

“[W]hat was most important wasn’t knowing the future—it was knowing how to react appropriately to the information available at each point in time.”

Dalio is highly focused on collecting data and analyzing it to help make decisions. However, he recommends that readers not think of decisions as predicting the future, but rather adapt to the conditions of a moment. Because investing is typically thought of as a process of making choices to capitalize on future gains, Dalio’s alternative view exemplifies his original thinking.

“A shaper is someone who comes up with unique and valuable visions and builds them out beautifully, typically over the doubts and oppositions of others.” 

Business leaders like Steve Jobs, scientists like Charles Darwin, nonprofit leaders like Wendy Kopp, civil rights activists like Dr. Martin Luther King, and other notable figures inspire Dalio. He sees them as remarkable for creating and achieving visions that are original and have widespread, lasting effects. Shapers are inspirational, Dalio implies, because they remind people to focus on their goals in spite of whatever challenges arise and to aim to create positive influence.