Page 223 - Ray Dalio - Principles

time. If someone who has been getting grades of 30s and 40s on
their tests raised their scores to 50s over the course of a few months
it would be accurate to say that they are getting better, but they
would still be woefully inadequate. Everything important in your life
needs to be on a trajectory to be above the bar and headed toward
excellent at an appropriate pace. The lines in the chart on the next
page show how the dots connect through time. A’s trajectory gets
you above the bar in an appropriate amount of time; B’s does not. To
make good decisions, you need to understand the reality of which of
these two cases is happening.

b. Be imprecise. Understand the concept of “by-and-large” and use
approximations. Because our educational system is hung up on
precision, the art of being good at approximations is insufficiently
valued. This impedes conceptual thinking. For example, when asked
to multiply 38 by 12, most people do it the slow and hard way rather
than simply rounding 38 up to 40, rounding 12 down to 10, and
quickly determining that the answer is about 400. Look at the ice
cream shop example and imagine the value of quickly seeing the
approximate relationships between the dots versus taking the time to
see all the edges precisely. It would be silly to spend time doing that,
yet that’s exactly what most people do. “By-and-large” is the level at
which you need to understand most things in order to make effective
decisions. Whenever a big-picture “by-and-large” statement is made
and someone replies “Not always,” my instinctual reaction is that we
are probably about to dive into the weeds—i.e., into a discussion of
the exceptions rather than the rule, and in the process we will lose
sight of the rule. To help people at Bridgewater avoid this time
waster, one of our just-out-of-college associates coined a saying I
often repeat: “When you ask someone whether something is true and
they tell you that it’s not totally true, it’s probably by-and-large
true.”