Alpha Masters: Great Book, Better Insight Into the Lives of the Most Powerful Money Managers
In Ray Dalio's famous Principles, a book which all employees are required to read and live by, he writes, "Above all else, I want you to think for yourself - to decide 1) what you want, 2) what is true, and 3) what to do about it. I want you to do that in a clear-headed thoughtful way, so that you get what you want." Ray Dalio is the infamous founder of Bridgewater Associates, the largest global macro hedge fund, with $120 billion in assets under management. But more so, he is striving to find truth and personally evolve. His success is what makes him famous, but it is his spirituality that makes him successful.
Mr. Dalio is one of the nine case studies of the new book, The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds, by Maneet Ahuja, and he is one of the more interesting. Now in his 60's, he has stepped down as Co-CEO but remains one of three Co-CIO's of the company. The investing strategy that has been successful for Bridgewater since the 1990's is still in place and has driven the firm to be the largest hedge fund in the world. Bridgewater has a portfolio of alpha-generating positions, normally around 15 or so. Bridgewater is able to tailor risk to each client by investing a portion of the assets in this alpha portfolio, and then the rest in a passive, index portfolio that only has beta. Thus, each investor can achieve optimum levels of risk and still have exposure to alpha.
Many have called Dalio the Steve Jobs of the investing world. As a huge proponent of mediation, Dalio says that twenty minutes of meditation can make up for hours of lost sleep. Further with his spiritual nature, he believes in the search for truth. As he writes in Principles, "There is nothing to fear from the truth. Being truthful is essential to being an independent thinker and obtaining a greater understanding of what is right."
If Dalio were to give you one piece of advice, it would be to go after what you want. In the book, he tells the story of trying to hire an architect to build his home. When he told the architect what he wanted, the architect replied that he had always wanted to design something like that, but never did. The architect showed Dalio a book of designs from another architect who had done those types of designs before and would use that as inspiration. Dalio proceeded to call the other architect and hire him to design his home. Dalio first asked this new architect how he started designing these types of structures, and the architect replied "I built doghouses to begin. But I really wanted to build this kind of stuff." The point of this story is to tell people that to get anywhere, you need to start. Start small, go after what you want, work hard, learn from mistakes, and success will follow.
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Tags: Bridgewater Associates