📖Ray Dalio
Process Over Outcome
Evaluate decisions by process quality, not just results.
Judge decisions by the quality of the process, not by the outcome. Good decisions can have bad outcomes, and bad decisions can have good outcomes.
🏠 Everyday Analogy
📖 Core Interpretation
Ray Dalio emphasizes durable business quality over short-term noise. A strong model, real competitive edge, and disciplined capital allocation matter more than quarterly excitement.
💎 Key Insight：Good processes produce good outcomes over time.
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❓ Why It Matters
Without business-quality filters, investors drift toward stories rather than economics. Durable cash generation is what supports long-term valuation.
🎯 How to Practice
Use a checklist covering moat, management, unit economics, and capital allocation; track long-term cash generation instead of quarter-to-quarter noise.
⚠️ Common Pitfalls
Buying narratives instead of cash-generating economics
Overreacting to short-term operating noise
Ignoring management quality and capital allocation
📚 Case Studies
1
COVID-19 Market Shock (2020)
During the rapid pandemic selloff, diversified risk exposures helped cushion losses versus concentrated equity portfolios, while bonds and some commodities offset part of the drawdown.
✨ Outcome：Smaller drawdown and quicker recovery reinforced the strategy’s goal of stability across economic environments.
2
Mexico Debt Crisis Bonds (1982)
Bridgewater recommended selling Mexican bonds short before the 1982 default, convinced a major downturn was certain.
✨ Outcome：The bearish call was overstated, clients left, and the firm nearly failed. Dalio adopted radical open-mindedness and probabilistic thinking for future macro calls.
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