Page 234 - Ray Dalio - Principles

“Any damn fool can make it complex. It takes a genius to
make it simple.” Think of Picasso. He could paint beautiful
representational paintings from an early age, but he

continually pared down and simplified as his career
progressed. Not everyone has a mind that works that way, but
just because you can’t do something naturally doesn’t mean
you can’t do it—you just have to have creativity and
determination. If necessary, you can seek the help of others.

5.9 Use principles.

Using principles is a way of both simplifying and improving
your decision making. While it might seem obvious to you by

now, it’s worth repeating that realizing that almost all “cases at
hand” are just “another one of those,” identifying which “one
of those” it is, and then applying well-thought-out principles
for dealing with it. This will allow you to massively reduce the
number of decisions you have to make (I estimate by a factor
of something like 100,000) and will lead you to make much
better ones. The key to doing this well is to:

1. Slow down your thinking so you can note the criteria you
are using to make your decision.

2. Write the criteria down as a principle.

3. Think about those criteria when you have an outcome to
assess, and refine them before the next “one of those”
comes along.

Identifying which “one of those” each thing is is like

identifying which species an animal is. Doing that for each
thing and then matching it up with the appropriate principles
will become like playing a game, so it will be fun as well as
helpful. Of course it can also be challenging. Many “cases at
hand,” as I call them, are hybrids. When a case at hand
contains a few “another ones of those,” one must weigh
different principles against each other, using mental maps of
how the different types of things I encounter should be

handled. To help people do that, I created a tool called a
Coach, which is explained in the Appendix.