Page 110 - Ray Dalio - Principles

much more dependent on the quality of the people and
their decision making.

Think about that. Imagine how Bridgewater’s
investment decision making would work if it operated the

same as Bridgewater’s management decision making (i.e.,
dependent on the people we hired and how they
collectively made decisions in their own ways). It would be
a mess.

The way the investment decision-making process works
is that a small group of investment managers who created
these systems see the systems’ conclusions and the

reasoning of the systems while we make our own
conclusions and explore our reasoning on our own. . . .
The machine does most of the work and we interact with it
in a quality way. . . . [And] we are not dependent on much
more faulty people.

Think about how different management is. While we
have principles, we don’t have decision-making systems.

In other words, I believe that the investment decision-
making process is effective because the investment
principles have been put into decision rules that make
decisions that people then follow while the management
decision-making process is less effective because the
management principles have not been put into decision
rules that people can follow to make management

decisions.

It doesn’t have to be that way. Having built the
investment systems (with the help of others) and knowing
about both investment decision making and management
decision making, I am confident that it can be the same.
The only questions are whether it can happen fast enough

and what will happen in the meantime.

I am working with Greg (and others) to develop these
management systems in the same way I worked with Greg
and others (Bob, etc.) on the investment systems. You are
seeing this happen via the development of the Baseball
Cards, Dot Collector, Pain Button, testing, job specing,