Page 306 - Ray Dalio - Principles

likely to achieve excellence? One that highlights its problems
and considers them intolerable or one that doesn’t?

Don’t get me wrong: Radical transparency isn’t the same as
total transparency. It just means much more transparency than

is typical. We do keep some things confidential, such as
private health matters or deeply personal problems, sensitive
details about intellectual property or security issues, the timing
of a major trade, and at least for the short term, matters that are
likely to be distorted, sensationalized, and harmfully
misunderstood if leaked to the press. In the following

principles, you will get a good explanation of when and why
we’ve found it helpful to be transparent and when and why
we’ve found it inappropriate.

Frankly, when I started off being so radically transparent, I
had no idea how it would go; I just knew that it was extremely
important and that I had to fight hard and find ways to make it
happen. I pushed the limits and was surprised by how well it

worked. For example, when I started taping all our meetings
our lawyers told us we were crazy because we were creating
evidence that could be used against us in court or by regulators
such as the SEC. In response, I theorized that radical
transparency would reduce the risk of our doing anything
wrong—and of not dealing appropriately with our mistakes—
and that the tapes would in fact protect us. If we were handling

things well, our transparency would make that clear (provided,
of course, that all parties are reasonable, which isn’t something
you can always take for granted), and if we were handling
things badly, our transparency would ensure that we would get
what we deserve, which, in the long run, would be good for us.

I didn’t know for sure at the time, but our experience has
proven this theory correct time and again. Bridgewater has had

uncommonly few legal or regulatory encounters, largely
because of our radical transparency. That’s because it’s
tougher to do bad things and easier to find out what’s true and
resolve claims through radical transparency. Over the last
several decades, we have not had a single material legal or

regulatory judgment against us.