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.
Knowing what people are like is the best indicator of how well they are likely to handle their responsibilities in the future. At Bridgewater, we call this "paying more attention to the swing than the shot." Since good and bad outcomes can arise from circumstances that might not have had anything to do with how the individual handled the situation, it is preferable to assess people based on both their reasoning and their outcomes. I probe their thinking in a very frank way so as not to let them off the hook. Doing this has taught me a lot about how to assess others' logic, and how to have better logic myself. When both the outcomes and the thinking behind them are bad, and when this happens a number of times, I know I don't want them to do that type of thinking anymore.
For example, if you're a poker player and you play a lot of poker, you will win some hands and lose others and on any given night you might walk away with less money than a lesser player who's gotten lucky. It would be a mistake to judge the quality of a player based on just one outcome. Instead, look at how well someone does what they do and the outcomes they produce over time.