"The Fund" proves that wealth has nothing to do with being a good person, even if, like Ray Dalio, you think you've developed "The Principles" of living a good life.
Good review. I've been reading Jean Strouse's biography of J.P. Morgan. It's a big and detailed book, but the contrast between Morgan and Dalio is stark. While there's plenty not to like about Morgan, the way he ran his business (perhaps better described as the development of the American industrial economy including its cultural institutions) was by looking for "character" -people who would reliably deliver good results in their fields and then backing them to the hilt.
The first chapter of the book shows him at a congressional hearing, near the end of his life (the ones that a year later led to the establishment of the Federal Reserve Bank)-a senator asks him about how he decided to give loans--assuming things like assets and revenue, etc--and Morgan answered, 'that's not it at all, I'd write a check for a million dollars to a man who had nothing, if he had the character to do the thing that the money was for.'
Dalio and his approach are part of the great hollowing out of the American character.
I interviewed for a job at Bridgewater once. Things went south after I told the recent Harvard grad interviewing me that I didn't think hedge funds actually generated enough alpha to overcome their fees. The interview was over after I politely refused to engage in Maoist self-criticism. Dalio's investment strategy, best I could tell, was buy low-beta investments and juice returns with leverage. Brilliant.
Yeah, I think this is it -- in a generally low yield world, he bought small positions with at least some yield and levered them up. Since margin was also cheap, it created modest but steady returns and he avoided absolute losses.
Good review. I've been reading Jean Strouse's biography of J.P. Morgan. It's a big and detailed book, but the contrast between Morgan and Dalio is stark. While there's plenty not to like about Morgan, the way he ran his business (perhaps better described as the development of the American industrial economy including its cultural institutions) was by looking for "character" -people who would reliably deliver good results in their fields and then backing them to the hilt.
The first chapter of the book shows him at a congressional hearing, near the end of his life (the ones that a year later led to the establishment of the Federal Reserve Bank)-a senator asks him about how he decided to give loans--assuming things like assets and revenue, etc--and Morgan answered, 'that's not it at all, I'd write a check for a million dollars to a man who had nothing, if he had the character to do the thing that the money was for.'
Dalio and his approach are part of the great hollowing out of the American character.
Very sad. I'm glad the book exists as one more piece of evidence that the rewards system in our society is truly ill. Thank you for the review.
I interviewed for a job at Bridgewater once. Things went south after I told the recent Harvard grad interviewing me that I didn't think hedge funds actually generated enough alpha to overcome their fees. The interview was over after I politely refused to engage in Maoist self-criticism. Dalio's investment strategy, best I could tell, was buy low-beta investments and juice returns with leverage. Brilliant.
Yeah, I think this is it -- in a generally low yield world, he bought small positions with at least some yield and levered them up. Since margin was also cheap, it created modest but steady returns and he avoided absolute losses.