Page 66 - Ray Dalio - Principles

that time, and for quite a while longer, I tended to hire people
just out of school who didn’t have much experience but were
smart, determined, and committed to the mission of making

the company great.

I didn’t value experience as much as character, creativity,
and common sense, which I suppose was related to my having
started Bridgewater two years out of school myself, and my
belief that having an ability to figure things out is more
important than having specific knowledge of how to do
something. It seemed to me, young people were creating

sensible innovation that was exciting. Older folks who did
things in the old ways held no appeal. I should add, though,
that putting responsibility in the hands of inexperienced people
doesn’t always work out so well. Some painful lessons that
you’ll read about later taught me that it can be a mistake to
undervalue experience.

By now, the initial $5 million from the World Bank had

grown to $180 million in investments that we were managing
for a variety of clients, but we were still trying to grab a larger
foothold in the institutional investment business. When Rusty
Olson, CIO of Kodak’s pension fund, approached us to solve
an investment problem, we jumped at the chance. Rusty was a
remarkable innovator and a man of great character who’d
started at Kodak in 1954 and took over its pension fund in

1972; he was widely respected as a leader in the pension fund
world. We’d been sending him our research for a while, and in
1990 he wrote us looking for our opinion on a big concern of
his. The Kodak portfolio was heavily invested in equities and
Rusty was worried about what would happen in an

environment in which the value of his assets fell badly. He had
been trying to come up with a way to hedge himself against
this risk without reducing his expected return.

Rusty’s fax arrived on a Friday afternoon and we leaped
into action. Getting a client this prestigious and innovative
would make a big difference to us. We knew we could do a
uniquely great job for Kodak, because we knew a lot about

bonds and financial engineering, and we had a historical
perspective unmatched in the industry. Bob Prince, Dan
Bernstein, and I worked nonstop through the weekend,