Page 50 - Ray Dalio - Principles

CHAPTER 4

MY ROAD OF TRIALS:

1983–1994

Coming out of my crash, I was so broke I couldn’t muster
enough money to pay for an airplane ticket to Texas to visit a
prospective client, even though the fees I’d earn were many

times the cost of the fare—so I didn’t make that trip. Still, I
gradually added clients, revenue, and a new team. With time,
my upswings increased in magnitude and my downswings
were both tolerable and educational. I never thought of what I
was doing as building (or rebuilding) a company; I was just

getting the things I needed to play my game.
Computers were among the most valuable things I

acquired, because of how they helped me think. Without them,
Bridgewater would not have been nearly as successful as it
turned out to be.

The first microcomputers (what would later be known as
personal computers) had come on the market during the late
1970s, and I had been using them as econometricians did,

applying statistics and computing power to economic data to
analyze the workings of the economic machine. As I wrote in
a December 1981 article, I believed (and still believe) that
“theoretically . . . if there was a computer that could hold all of
the world’s facts and if it was perfectly programmed to
mathematically express all of the relationships between all of

the world’s parts, the future could be perfectly foretold.”

But I was a long way from doing that. Though my early
systems provided valuable insights into where prices would
eventually reach equilibrium, they hadn’t helped me develop
robust trading strategies; they just showed me that a particular
bet would eventually pay off. For example, I’d run through my
analysis and end up with a view that the price of some

commodity should be, say, 75 cents or so. If it was currently
60 cents, I’d know I wanted to buy it, but I wouldn’t be able to