📖Ray Dalio
Review Through Principles
Diagnose failures by testing against your principles.
When things go wrong, diagnose what went wrong by comparing the outcome to your principles. Was it an error in your principles, or an error in following them?
🏠 Everyday Analogy
📖 Core Interpretation
Ray Dalio advocates a repeatable process: define criteria, execute consistently, and review decisions against evidence. Process quality drives outcome consistency.
💎 Key Insight：Distinguish between bad principles and bad execution.
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❓ Why It Matters
Without process, there is no reliable feedback loop. Structured execution and review improve decision quality over time.
🎯 How to Practice
Run a decision loop of research, thesis, execution, and post-mortem; document assumptions and update playbooks with evidence, not hindsight bias.
⚠️ Common Pitfalls
Having opinions without execution criteria
Reviewing outcomes but not decisions
Abandoning rules during volatility spikes
📚 Case Studies
1
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.
2
Long-Term Capital Management Turmoil (1998)
Bridgewater misjudged how central banks would react to LTCM’s collapse and related market stress.
✨ Outcome：Positions suffered from unexpected policy responses. Dalio refined stress-testing, scenario analysis, and diversification to account for extreme but plausible central bank interventions.
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