Here's What Psychologists Think of Ray Dalio | Exploring Markets

Here's What Psychologists Think of Ray Dalio

There's a constant debate about Ray Dalio and his hedge fund Bridgwater. Some people say it is a cult. Others say it is harmful and over the top extreme. But then there are those who absolutely love it and live it. If you do some digging, you can even find what professional psychologists and authors think. Here's what they say:

Robert Kegan, Ph.D. and Lisa Lahey, Ed.D. 
Professors at Harvard’s Graduate School of Education

1. “Imagine finding yourself in a trustworthy environment, one that tolerates—even prefers— making your weaknesses public so that your colleagues can support you in the process of overcoming them. . .You’re imagining an organization that, through its culture, is an incubator or accelerator of people’s growth.”

2. “Bridgewater stands for the pursuit of what is true, no matter how inconvenient, both as a business necessity in the financial markets and as a path for personal evolution and cultural integrity.”

3. “At Bridgewater, learning from one’s mistakes is a job requirement... Bridgewater destigmatizes (and even celebrates) making mistakes. More than that, it treats the ongoing, often painful experience of one’s imperfections as valuable data for learning rather than unproductive blame.”

Adam Grant, Ph.D.

Wharton School of the University of Pennsylvania

“In the investment world, you can only make money if you think different from everyone else. Bridgewater has prevented groupthink by inviting dissenting opinions from every employee in the company. When employees share independent viewpoints instead of conforming to the majority, there’s a much higher chance that Bridgewater will make investment decisions no one else has considered and recognize financial trends no one else has discerned. That makes it possible to be right when the rest of the market is wrong.”

“Dalio can be confident that members of his staff won’t feel pressured to nod and smile whenever he presents an opinion; his whole team will be radically transparent in challenging his assumptions about markets, and they’ll be the same with one another. Decisions will be made based on an idea meritocracy, not a status hierarchy or democracy.”

Edward Hess, L.L.M.

University of Virginia Darden School of Business. “I am not saying that Bridgewater is just like the Navy SEALs. Making the best investment decisions is not analogous to executing a Navy SEAL mission; however, it’s clear that there are common threads between the cultures of these two high-performance but very different organizations. The fact that some of the same learning mindsets, capabilities, and processes apply in high-change environments, both business and nonbusiness, is compelling.”

“Disagreements are encouraged because . . . the process of wrestling through disagreements and stress testing one’s thinking and beliefs [gets one] to the truth or a better place. One senior manager told me ‘I don’t like conflict. But I deal with it here because it has rational benefits.’”

“At Bridgewater, Ray continually emphasizes that people’s differences—their unique ways of thinking and seeing the world—are good, because all jobs are not the same. It is those differences that bring together different ideas and the different perspectives necessary to stress test ideas and create the best outcomes for an organization. The challenge is to educate people to embrace each other’s uniqueness and independent thinking.”

You can read more and see where some of these quotes came from right here