Ray Dalio Investment Analysis Prompt

This prompt is based on Dalio's 40 years of investment wisdom, covering economic machine mechanics, debt cycle analysis, radical truth, asset allocation, and risk management to help you make systematic and principle-driven investment decisions. Paste it into ChatGPT or Claude and request a structured output: a one-sentence thesis, key risks, invalidation triggers, and a margin-of-safety range. Use it to organize research, not to outsource certainty—verify facts in primary sources and stay within your circle of competence. ⚠️ AI analysis is for reference only. Always conduct your own research before making investment decisions.

Full Prompt Content

Decision checklist (before you act)
  • {
  "t": 0,
  "b": {
    "t": 2,
    "i": [
      {
        "t": 3
      }
    ],
    "s": "Write a 1-sentence thesis (what must be true)."
  }
}
  • {
  "t": 0,
  "b": {
    "t": 2,
    "i": [
      {
        "t": 3
      }
    ],
    "s": "List disconfirming evidence and invalidation triggers."
  }
}
  • {
  "t": 0,
  "b": {
    "t": 2,
    "i": [
      {
        "t": 3
      }
    ],
    "s": "Define a valuation band or margin-of-safety range (avoid false precision)."
  }
}
  • {
  "t": 0,
  "b": {
    "t": 2,
    "i": [
      {
        "t": 3
      }
    ],
    "s": "Set position sizing and risk limits before price moves."
  }
}
  • {
  "t": 0,
  "b": {
    "t": 2,
    "i": [
      {
        "t": 3
      }
    ],
    "s": "Schedule a review date and update only on new evidence."
  }
}
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Getting Started
What is the 'economic machine' Dalio refers to?
Dalio views the economy as a machine driven by three forces: (1) Productivity growth (long-term), (2) Short-term debt cycle (5-8 years), (3) Long-term debt cycle (50-75 years). Understanding where we are in these cycles helps predict economic trends and asset performance.
What is 'radical truth' and 'radical transparency'?
Radical truth means facing reality objectively, acknowledging mistakes, and learning from them. Radical transparency means operating openly, sharing information freely, and encouraging honest feedback. These principles help eliminate bias and improve decision-making.
What is Dalio's 'All Weather' portfolio strategy?
A risk-balanced portfolio designed to perform reasonably well across all economic environments - growth, recession, inflation, and deflation - by diversifying across uncorrelated asset classes. The typical allocation is 30% stocks, 40% long-term bonds, 15% intermediate bonds, 7.5% gold, and 7.5% commodities, balanced by risk contribution rather than capital weight.
How to Use
What is risk parity and why does Dalio use it?
Risk parity balances portfolio risk across asset classes rather than balancing capital. Traditional 60/40 portfolios have 90% risk from stocks. Dalio's All Weather portfolio spreads risk equally across stocks, bonds, gold, and commodities for better risk-adjusted returns.
How can individual investors apply Dalio's principles?
Start with the All Weather portfolio concept: diversify across uncorrelated assets that perform in different economic environments (growth, inflation, deflation, recession). Rebalance regularly. Focus on what you don't know rather than what you think you know.
How does this prompt apply Dalio's macro analysis to individual stocks?
The prompt evaluates where we are in the economic cycle, how the company is positioned for different macro scenarios, and whether the stock fits a risk-parity approach. It considers factors like debt sensitivity, inflation exposure, and cyclical positioning to assess how the company would perform across growth, recession, inflationary, and deflationary environments.
Advanced Questions
What does 'radical transparency' mean for investment analysis?
Dalio advocates being brutally honest about what you don't know. The prompt encourages identifying assumptions, stress-testing your investment thesis, and acknowledging blind spots. Rather than seeking confirmation of your views, it pushes you to find the strongest arguments against your position and evaluate how your analysis could be wrong.