Page 54 - Ray Dalio - Principles

decisions, write them out in both words and computer
algorithms, back-test them if possible, and use them on a real-
time basis to run in parallel with your brain’s decision making.

But I’m getting ahead of myself. Let’s go back to 1983.

RESURRECTING BRIDGEWATER

By late 1983, Bridgewater had six employees. Up until then, I
hadn’t done any marketing; the business we got came from
word of mouth and from people reading my daily telexes and
seeing my public appearances. But clearly there was a growing
demand for our research, and I realized we could sell it to
supplement our consulting and trading income. So I hired a
seventh employee, a former door-to-door Bible salesman

named Rob Fried, and we hit the road, lugging around a
projector and a huge stack of slides, hawking a $3,000-per-
month research package with my daily telexes, weekly
conference calls, biweekly and quarterly research reports, and
quarterly meetings. Over the next year, Rob brought in a
number of institutions and institutional investment managers,

including General Electric, Keystone Custodian Funds, the
World Bank, Brandywine, Loomis Sayles, Provident Capital
Management, the Singer Company, Loews Corporation, GTE
Corporation, and Wellington Management.

At that point, our business consisted of three main areas:
consulting for fees, managing companies’ risks for incentive
fees, and selling the research packages. We worked with all

sorts of corporate, financial, and government institutions that
had market exposures—banks, diversified international
businesses, commodities producers, food producers, public
utilities, and more. For example, we would build a plan to help
a multinational company deal with the currency exposure it
faced from operating in different countries.

My approach was to immerse myself in a business until I
got to a point where I felt that the strategies I was handing off
were the ones I would use were I running the company myself.
I would break each company down into distinct logical