Principles are ways of successfully dealing with reality to get what you want out of life.
Ray Dalio, one of the world’s most successful investors and entrepreneurs, cites principles as his key to success.
In 1975, Ray Dalio founded Bridgewater Associates, out of his two-bedroom apartment in New York City. Over forty years later, Bridgewater has grown into the largest hedge fund in the world and the fifth most important private company in the United States (according to Fortune magazine), and Dalio himself has been named to TIME’s list of the 100 most influential people in the world. Along the way Dalio discovered unique principles that have led to his and Bridgewater’s unique success. It is these principles, and not anything special about Dalio, that he believes are the reason behind whatever success he has had. He is now at a stage in his life that he wants to pass these principles along to others for them to judge for themselves and to do whatever they want with them.
Life Principle
Raising the probability of being right is valuable no matter what your probability of being right already is.
I often observe people making decisions if their odds of being right are greater than 50 percent. What they fail to see is how much better off they'd be if they raised their chances even more (you can almost always improve your odds of being right by doing things that will give you more information). The expected value gain from raising the probability of being right from 51 percent to 85 percent (i.e., by 34 percentage points) is seventeen times more than raising the odds of being right from 49 percent (which is probably wrong) to 51 percent (which is only a little more likely to be right). Think of the probability as a measure of how often you're likely to be wrong. Raising the probability of being right by 34 percentage points means that a third of your bets will switch from losses to wins. That's why it pays to stress-test your thinking, even when you're pretty sure you're right.
Life Principle
- Learn How to Make Decisions Effectively
- Make your decisions as expected value calculations.
- Raising the probability of being right is valuable no matter what your probability of being right already is.
- Make your decisions as expected value calculations.
Any person or organization can adopt Principles to better achieve their goals.
Learn what Principles are and how they are applied at Principles.com
