📖Ray Dalio
Evolution Through Time
Long-term success requires continuous evolution.
Over long periods, the most important force is evolution — in economies, in markets, and in your own investing ability. Those who evolve survive and thrive.
🏠 Everyday Analogy
📖 Core Interpretation
Ray Dalio treats survival as the first objective. Limiting permanent capital loss, controlling leverage, and avoiding single-point failure are prerequisites for long-term compounding.
💎 Key Insight：Adapting your approach over time is essential for longevity.
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❓ Why It Matters
A single large drawdown can erase years of progress. Risk control is not timidity; it is the operating system that keeps compounding alive.
🎯 How to Practice
Define downside scenarios before entry, cap position size, avoid fragile leverage, and maintain liquidity so mistakes remain survivable.
⚠️ Common Pitfalls
Equating volatility with all forms of risk
Oversized positions without an exit plan
Using leverage to compensate for uncertainty
📚 Case Studies
1
Betting on Disinflation (1982)
Dalio used his cause-and-effect models to predict falling inflation and interest rates, buying long-term U.S. Treasuries when many feared persistent inflation.
✨ Outcome：Bonds rallied sharply as rates fell, validating his systematic ‘economic machine’ framework and strengthening Bridgewater’s reputation.
2
Navigating the Global Financial Crisis (2008)
Bridgewater’s ‘economic machine’ framework anticipated deleveraging and deflation. The firm reduced risk in equities and credit, increased quality sovereign bonds and some hedges.
✨ Outcome：Pure Alpha performed strongly in 2008, protecting client capital and demonstrating the power of model-driven thinking about the economy as a machine.
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