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Ray Dalio: The one thing I do differently before investing a single dollarYouTube
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MY FIRST MILLION · EXTRACTED

Ray Dalio: The one thing I do differently before investing a single dollar

Find 15 uncorrelated return streams, turn pain into principles, and why the portfolio most investors build is designed to fail.

▶70K views on YouTubePreview, 1 of 12 tactics free

With Ray Dalio

"Find 15 good uncorrelated return streams. If you can get out to 15, you can reduce about 80% of your risk without reducing your return. That means you increase your return-to-risk ratio by something like a factor of five." — Ray Dalio
Ray Dalio, on the episode

Ray Dalio built Bridgewater Associates from a one-man operation, started after borrowing $4,000 from his father, into the largest hedge fund in the world. The pop framing of Dalio is the billionaire sage dispensing life wisdom. The actual operating system underneath is more specific: a set of repeatable, back-tested decision rules for markets and for life, derived from systematic reflection on every failure. This conversation, recorded for My First Million, covers the mechanics behind the Holy Grail of investing, how Dalio converts painful losses into written principles, and the values-abilities-skills hiring framework he used to find talent before Bridgewater had any name recognition to attract it.

Tactic 01

Ray Dalio, My First Million

The Holy Grail of Investing: 15 Uncorrelated Return Streams

The play

List holdings and build toward many genuinely uncorrelated return streams.

Ray Dalio says

The holy grail of investing is to find 15 good uncorrelated return streams. If you can get out to 15, you can get down to reduce about 80% of your risk without reducing your return. That means you increase your return to risk ratio by something like a factor of five. This came from looking at the math of diversification, the marginal benefits given different levels of correlation.

Try this

List your current holdings and identify which ones would move together in the same market scenario. Work toward building genuinely uncorrelated positions.

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Tactic 02

Back-Test Every Decision Rule Before You Trade It

Ray Dalio says

Every time a decision was about to be made, the past would be studied to see how that same decision would have…

Episode quotes and Try this

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Tactic 03

Hire Values First, Abilities Second, Skills Last

Tactic 04

Identify Your Freedom Number

Tactic 05

Allocate 5-15% of Your Portfolio to Gold or Alternatives

Tactic 06

Use Personality Tests to Improve Team Dynamics

Tactic 07

Practice Transcendental Meditation

Tactic 08

Study Primary Sources to Learn

Tactic 09

Create a Life Purpose Statement

Tactic 10

Identify The Five Big Forces In Macro Cycles

Tactic 11

Use The Bubble Gauge For Long-Term Timing

Tactic 12

Document Culture in Principles

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MY FIRST MILLION, extracted by Podex