Looking forward to 2025 and seeing selfies from Ray Dalio at a Taylor Swift concert, I realize that I am in uncharted territory! What is driving the gold price higher and why am I seeing this information now? Markets and human nature may have timeless principles, so let's revisit the classic PRINCIPLES document from Ray Dalio.
If you've been following me online, then you may recognize the phrase "radically transparent". Where did this come from? Top 10 of Ray Dalio's principles, that's where! What does it mean? Well, the devil is in the details so let's go to the source:
... 6) Be radically transparent. Provide people with as much exposure as possible to what’s going on around them. Allowing people direct access lets them form their own views and greatly enhances accuracy and the pursuit of truth. Winston Churchill said, “There is no worse course in leadership than to hold out false hopes soon to be swept away.” The candid question-and-answer process allows people to probe your thinking. You can then modify your thinking to get at the best possible answer, reinforcing your confidence that you’re on the best possible path. 6a) Record almost all meetings and share them with all relevant people. Provide tapes of all meetings that don’t contain confidential information to enhance transparency. Of course, there are some times when privacy is required. If someone gives you confidential information, keep it confidential until you have permission to disclose it.
My take on this language is something like chaos theory where whatever can happen will happen; I focus on setting the table so that the things that can happen are more likely to be more better for us. The classic 80-20 rule called the Pareto Principle overshadows another basic economic idea credited to Vilfredo Pareto called "PARETO IMPROVEMENT". I like the Pareto Improvement because it is another name for a win-win outcome. I find that it's easier to find the win-win plays when we're all looking at as many peices of the puzzle as possible. Just me?
Let's ask Ray Dalio about fitting in versus sticking out.
... 70) Don’t try to be followed; try to be understood and to understand others. Your goal is to understand what is true and improve together. If you want to be followed, either for an egotistical reason or because you believe it more expedient to operate that way, you will pay a heavy price in the long run. If you are the only one thinking, the results will suffer. 70a) Don’t try to control people by giving them orders. They will likely resent the orders, and when you aren’t looking, defy them. An authoritarian approach also means you aren’t developing your employees, and over time they will become increasingly dependent on you, which damages all parties. Instead, the greatest power you have over intelligent people—and the greatest influence they will have on you—comes from constantly getting in synch about what is true and what is best so that they and you want the same things. People must desire to do the right things, and this desire must come from them. You can, however, show them the connection between fulfilling their responsibilities and their own well-being. Reaching agreement will come only from radically open discussions in which you are fair, reasonable, and open-minded. 70b) Communicate the logic and welcome feedback. When making rules or changes, explain the principles behind the decision. We want reasonable thinkers to operate sensibly. We achieve this through principles that are sound and well understood, applied and tested through open discussion. It is each person’s job to 1) evaluate whether he agrees with a decision, and if not, explain why; and 2) hold each other accountable for operating consistently within the organization’s principles. We want people who understand the principles that allow our community to succeed and possess strong ethics that motivate them to work by our rules, rather than to sneak around them. We want people who know that if the community works well, it will be good for them. We don’t want people who need to be ordered and threatened. We don’t want people who just follow orders.
Thanks to CEOca for the opportunity to continue to interact with other smart people in markets!
