The Tim Ferriss Show
#264: Ray Dalio, The Steve Jobs of Investing
Episode guests
Podcast summary created with Snipd AI
Quick takeaways
- Having the right opinion is more important than just having an opinion; questioning our own beliefs and seeking different perspectives can lead to better decision-making.
- Approaching differences of opinion with curiosity and a genuine desire to understand others' reasoning can enhance decision-making by gaining valuable insights.
- Diversification is crucial for reducing investment risk and improving returns; understanding correlations and intrinsic drivers of investments aids in creating a balanced portfolio.
Deep dives
Lessons from History: The Durant's 5,000 Years of History
The Durant's book explores the themes of history through various perspectives, including religion and natural resources.
A River from Eden by Richard Dawkins
Dawkins' book provides insights into evolution and helps put things into perspective.
The Hero of a Thousand Faces by Joseph Campbell
Campbell's book examines the hero's journey and the different attributes of heroes throughout history.
The Importance of Having an Opinion
Having an opinion is not valuable by default, as the focus should be on having the right opinion. It is crucial to question our own opinions and seek humility to improve decision-making. By exploring different perspectives, individuals can stress test their opinions and make better choices. The key is to know what the best decisions are and have the courage to make them.
Understanding the Reasoning behind Conclusions
To better understand someone's reasoning, it is important to approach differences of opinion with curiosity and a genuine desire to learn why they hold a different view. By asking questions and actively listening to their reasoning, we can raise our own probabilities of making better decisions. Engaging in conversations and seeking multiple perspectives can offer valuable insights.
The Value of Uncorrelated Bets and Diversification
Diversification is vital to reducing risk without sacrificing returns. Investing in uncorrelated assets can significantly improve the return to risk ratio. By diversifying investments effectively, individuals can eliminate a significant portion of risk. Understanding correlations and intrinsic drivers of investments can aid in creating a balanced portfolio and improving investment outcomes.
Ray Dalio (@raydalio) grew up a middle-class kid from Long Island. He started his investment company Bridgewater Associates out of a two-bedroom apartment at age 26, and it now has roughly $160 billion in assets under management. Over 42 years, he has built Bridgewater into what Fortune considers the fifth most important private company in the U.S. Along the way, Dalio became one the 100 most influential people in the world (according to Time) and one of the 100 wealthiest people in the world (according to Forbes). Because of his unique investment principles that have changed industries, aiCIO Magazine called him "the Steve Jobs of investing." Ray believes his success is the result of principles he's learned, codified, and applied to his life and business. Those principles are detailed in his new book Principles: Life and Work. In this interview, we cover a lot, including: How Ray thinks about investment decisions, how he thinks about correlation, etc. The three books he would give to every graduating high school or college senior How he might assess cryptocurrency And much, much more... Enjoy! This podcast is brought to you by Four Sigmatic. I reached out to these Finnish entrepreneurs after a very talented acrobat introduced me to one of their products, which blew my mind (in the best way possible). It is mushroom coffee featuring chaga. It tastes like coffee, but there are only 40 milligrams of caffeine, so it has less than half of what you would find in a regular cup of coffee. I do not get any jitters, acid reflux, or any type of stomach burn. It put me on fire for an entire day, and I only had half of the packet. People are always asking me what I use for cognitive enhancement right now -- this is the answer. You can try it right now by going to foursigmatic.com/tim and using the code Tim to get 20 percent off your first order. If you are in the experimental mindset, I do not think you'll be disappointed. This podcast is brought to you by Athletic Greens. I get asked all the time, "If you could only use one supplement, what would it be?" My answer is, inevitably, Athletic Greens. It is my all-in-one nutritional insurance. I recommended it in The 4-Hour Body and did not get paid to do so. As a listener of The Tim Ferriss Show, you'll get 30 percent off your first order at AthleticGreens.com/Tim. Show notes and links for this episode can be found at tim.blog/podcast.
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