Transcription
"Ray, when you were building everything, what motivated you? Was it knowledge or money?"
"It was really the game. I love the fact that I could be tested in the real world because I'm having these interactions and I love the fact that I'm scored every day. I could score how I'm doing to three decibel places. You know, - Showtime!"
Ray Dalio built one of the world's biggest hedge funds. Now he's exploring the deep.
"How often are you on the boat, Ray?"
"Well, often, let's say I'm probably on the boat six times a year, but I spend maybe a couple of weeks -"
"And it's all over the place. Right? All over the -"
"World. All over the place."
We met him on board his research vessel in the Port of Nice, where the United Nations Oceans Conference was in full swing. At events like these world leaders, NGOs, big business and stakeholders gather to raise awareness and address the urgent needs of our waters.
"So is President Lula coming?"
"I, - It's on and off and it's on and off, but he is supposed to come with President Macron, but these things come and go."
"They're held up. I know what it's like."
"I, I, I love mistakes. I love problems because I think all of that is part of the process. It's the way you learn. So we're at a critical time and I want to, again, give you my perspective."
Ray Dalio is famous and prolific.
"As you might know. My objective at this stage of my life is to pass along the principles, perspectives and tools that have helped me."
He founded Bridgewater Associates, a hedge fund that consistently ranks amongst the largest in the world. Bridgewater's growth led Dalio to write the principles in 2017 and propelled him into the mainstream. In recent times, he's become, well, a bit of an influencer.
"Whatever success I've had in life has had to do more with my knowing how to deal with not knowing than anything I know."
"Ray Dalio, thank you so much for joining us."
"Thank you for joining me here. On OceanX."
"It's the most beautiful boat. Ray, talk to me a little bit about your childhood. Where, where did you grow up? What was your neighborhood like?"
"I grew up on Long Island. My neighborhood was a bunch of houses next to each other, pretty small houses. So it was a not a big place."
"And do, do you remember your first job?"
"Yeah, well my first job was a paper route and then I would shovel snow on driveways and, but then my real job when I was 12 is I got into caddying and that changed my life. Had a big impact."
"And why did it change your life?"
"Because the people, I was caddying for it. The time in the sixties we're always talking about the stock market. So I took my caddying money and I put it into the stock market and I got hooked. I bought the only company that I ever heard of that was selling for less than $5 a share. The company I bought was about to go broke, so it was cheap. And then another company acquired it and it tripled in money. And so I said this making money is easy in the markets. And so I got hooked."
"This is at what, 12?"
"Yeah, -"
"13, -"
"12."
"And then did you decide at 12 years old to, to get into financial -"
"Services? It was just like a game, -"
"Right?"
"I love playing the game. You know, stocks went up then and you could be lucky and think you were smart."
"Okay, so, so what happens after that? You go to, you finish school?"
"I went to school and then in 1973 I was in graduate school, Harvard Business School. And then I went out to work in commodities."
"So when did you decide to found Bridgewater?"
"1975 after I got fired from my job and I got in a fight with my boss. And -"
"What physical fight?"
"Yeah, we, well, I, I was rowdy then, you know, and so at a New Year's Eve company party, we got pretty drunk and we pushed each other around and boom, I decked him and you had to to leave. Anyway, so that's how I started Bridgewater. And because I had clients and they wanted to hire me to give them advice,"
Bridgewater Associates is headquartered in Westport, Connecticut. In the mid 1990s it had $4 billion of assets under management and 90 billion in 2024. Bridgewater, like a lot of its closest competitors, also made money in the 2008 global market crash. Dalio founded Bridgewater Associates in 1975 and ran it for 47 years. And only in 2025, nearly half a century after he started the company, Dalio sold his remaining stock and left the board. Hedge funds like Bridgewater are private clubs where rich people and big institutions pool their money. That pot of cash is then managed by professionals who don't just buy and hold. They also bet on prices going down or borrow money to invest more than they have. They can buy anything from stocks and bonds to currencies. And like gold and oil, hedge funds essentially aim to make money even when the market is bad.
"So when you start Bridgewater, it wasn't plain sailing. It was a bit of up and down and at some point it almost went under."
"Yes, which was one of the best experiences of my life. It changed me. Yeah, yeah, yeah. So this was in the seventies and the seventies was a wild period. You know, market's wild. And so what happened in 1979? Yeah, Paul Volcker gets appointed and tightens monetary policy and I calculated that American banks had lent much more money to foreign countries than those countries were going to be able to pay back and that we're gonna have a big debt crisis. And this was very controversial. And then I was brought into a lot of attention. Wall Street Week, and then I testified to Congress."
"It's a great pleasure and a great honor to be able to appear before you in examination with what is going wrong with our economy. The economy is now flat, teetering on the brink of failure. I can say with absolute certainty that if you look at the liquidity base in the corporations and the world as a whole, that there's such a reduced level of liquidity that you can't return to an era of stagflation."
"And I couldn't have been more wrong. That was the exact bottom in the stock market. And I didn't really understand enough the impact of easing and so on. So I lost money for me. I lost money for clients. I was so broke that I had to borrow $4,000 from my dad to take care of my family and so on. So it was most painful experience that I could imagine. And it was really the best experience for me because I really learned humility. You know, I started to think of myself. How do I know I'm right? It created an open-mindedness. I wanted to find the smartest people I could who would disagree with me to stress test my thinking."
"But some people struggle to lead, right, they wanna lead by consensus. And I dunno whether it's a likeability -"
"Problem. I think it's think it balance it. That's that. That's very true. There's a balance between autocratic leadership and democratic leadership. I don't believe either of those work. Okay. The autocratic leader is the person who believes that they have all the answers and just follow my instructions. And I don't believe that works because they don't know enough. And also they're not having the people with them. I don't think democratic leadership works like you take a survey or something. And so I believe an idea meritocracy works. I I, I had a process of what we call believability weighted decision making for a variety of reasons. We collected a lot of data on people and that they each rated each other and so on. And we would get a good sense in this area. In that area that person's particularly strong. And less so -"
With Dalio at the helm, nearly a quarter of all new hires wouldn't make it past the first two years. Dalio spearheaded a unique corporate culture of radical transparency that is not for everyone. Since his departure, Bridgewater has dialed it back. As Chief Executive and in life, Dalio believes we're all blind in different ways. So when he ran Bridgewater, Dalio encouraged his employees to give the most honest, open, transparent, and brutal critiques of each other. Everything had to be out in the open. Under Dalio employees used an app called the Dot Collector to measure each other's strengths and flaws in real time. All the time.
"The Dot Collector collects these views. They simply note the attribute and provide a rating from one to 10. Different people are always going to have different opinions. It's given us more effective work and it's given us more effective relationships."
"But radical transparency or radical truthfulness can also hurt. Have you had had any regrets where you were too transparent or too truthful with people close to -"
"You? It, it can always be a challenge. Yes. It depends on the person. You, it's almost like touching a nerve, what I call it is tough. Tough love. It's tough love. Yeah. Let's say you have a player on a team. Okay? And he's got an issue. Yeah, okay. Are you going to let it go or are you gonna deal with it? If you're going to have an effective team, you have to deal with it. Right? So I can't not deal with that."
"But, but this is the, the concern with leadership, right? You also want that person to be confident. 'cause as soon as you lose that confidence, then you no longer have a player. Yes. That's any good."
"Yes. But that, that you see the confidence I learned to get -"
"Yeah."
"Was by knowing my weaknesses to gain the open-mindedness, pain."
"Yeah."
"We don't like pain. But what happens is, but pain is a messenger. It tells you about how the world works and it tells you how you should deal with the world to be effective."
"How is that? I mean, how did you think about pay? Was it -"
"Important to I think, I think about pay as sharing the mission. And if we're successful, then we should share that. If we're not successful, we'll go through the pain. Can we go through the pain together in order to get to be successful? If it's too transactional, you're gonna have a problem. Okay. I want people who will go through the ups and downs with me because we have a greater mission. I want a community in which you always have the right and obligation to make sense of things. I want help you all struggle well and evolve to get the most out of life."
"Was it tough leaving Bridgewater?"
"Well, no, it was, it was a change, a big change. But it was like watching my kids grow up. Okay. For 47 years I was responsible for Bridgewater. Okay. To watch the, that next generation, you know that you want them to be on their own."
"I know, but when your kids grow up, you still miss them a little bit, don't you?"
"No, I don't have to miss them. We could still see and hug each other and we can still have conversations about how the world works or any of that. Right. But the decisions are theirs and that's how it should be."
The founder of the world's biggest hedge fund, Ray Dalio, is putting his efforts into what he's calling the planet's most important asset: the Ocean.
Dalio also co-founded the non-profit initiative OceanX with his son Mark Dalio. In Dalio's next phase of life, he wants to help us better understand our oceans, to travel and document our unchartered underwater worlds.
"These are man submersibles. They go down a thousand meters, so 3,300 feet. And so they unlock the world down there. We all the time discover species that have never been discovered -"
"Around the world, -"
"Around every place. Almost that we go."
"You've been in these -"
"Oh yeah, I love them. It -"
"Takes three people -"
"And you see species as you're going down. This is, this is not manned, is it? Man, from here, this is not manned."
"Yeah, -"
"It's called a remote operated vehicle."
"Yeah."
"And it will go down 6,000 meters, which is 18,000 feet, which will cover 98% of the world's ocean."
"Mark! Of course you are here. I should have known you were, you'd be in Nice. I didn't think about that. Everything. Oh yeah."
"I didn't want to interrupt. He's an ocean guy. He's an -"
"Ocean guy. I know he's an ocean guy. On how long did it take to build the ship?"
"About three years From the architecture to building it through."
"Yeah. Is there one thing that you, that you're trying to -"
"No one thing. There's lots of things we wanna see it all. It's trying, understand it, trying to, this is twice the size of all earth combined, right. Of all land. And it's never been explored."
"Yeah, but why are you frustrated? I mean, you, you seem like -"
"No, I'm excited. Okay. I'm excited. It's never been explored. Imagine there was a continent that has never been explored and with all different species that don't, I mean, wow. How exciting. Right? And important. Yeah."
"What's been the most exciting thing you've found so far? Is there something like that? Probably discovering the giant squid, the first and only time that the giant squid has been discovered and shown in its media. That was maybe millions of people loved that. But lots of things Yeah. Because historically it was like, you know, the whale and the squid, right? You heard about these like, that's massive fights."
"Of course. Down there, a thousand meters, all this stuff is going on. It's terrifying. It's so -"
"Cool. I, I always, you know, I think of tech titans fighting it out. Yeah."
"You gotta go dive -"
"You. You've never frayed into politics."
"No."
"Why not?"
"I have my, the things I'm doing, my games, my, you know, the investing and so on and you know, it's just not my thing."
"You stayed relevant in one way or another other leaders maybe either dunno how or don't wanna stay relevant. Like it's, it's tough, you know, when people stop recognizing you after a life in the -"
"Spotlight. Oh, I think that, that, no, no, no. I think that we all are gonna be totally forgotten, you know, like that that's if you're working to be remembered or to be relevant in the spotlight, I don't think that's a good idea. I think the question is, are you having what you want? You know, are you having impact?"
"So Ray, talk to me about this phase in life. What do you enjoy the most?"
"I I'm still addicted to the markets and you know, and what's going on. And -"
"Do you look at them daily?"
"Oh yeah. All the time. Right. I'm as immersive. All of, I'm all of the markets. That's my game. I'll do that till I die."
"Yeah, I mean I've interviewed you for many years and actually what always surprised me is that it's always simple concepts so that people overcomplicate the way the economy works, the way the markets work, and you've always boiled it down to simple concepts."
"Yeah. I mean you can lose sight of the fundamentals by getting into this complexity. You know, anybody can make something complicated. Takes a genius to make it simple. Then you can get into the details."
"But why do so few people understand that or view the world like you do?"
"I think for two reasons. First of all, if you wanna see the patterns, you have to see them across countries. And then I also think that economists and so are not tested in the markets. Right. You know, it could become theoretical. Well, when you have to place bets and you have to get the penalties of being wrong and the rewards of being right, you know the, it's a different thing."
Bridgewater is a global macro hedge fund. That means it values very high level research about macroeconomics forces, including geopolitics, global trade and Central Bank policy. It's up there with prominent hedge funds with macro trading roots like Brevan Howard and Rokos Capital Management. They make money by spotting inefficiencies and dislocations in financial systems and reaping the benefits of this chaos. Even volatility pays off in the sector. And to this day, Ray Dalio thinks big picture.
"Whenever things are coming along that I had not seen before, I really needed to understand if they happened in history so I could understand the mechanics, which is why then I study history."
1929 found the bottom falling out of the New York Stock Exchange and the panic was on. Overnight men of wealth were reduced to selling apples on street corners. The prosperity boom of the twenties had exploded like a giant soap bubble. Confidence and courage are the essentials of success in carrying out our plan.
"It was so enlightening. I understood the Great Depression and I understood the thirties and because of that type of research, I was able to anticipate the 2008 financial crisis and the European debt crisis from 2010 to 2015. I wouldn't have if I didn't study that period."
"But Ray, I find it a amazing, because actually the financial system has changed so much. There's so much more of it. So you think that basically it's patterns that human behavior is always human -"
"Behavior. Well, but there's also a dynamic about debt. When, when debt and debt service rise relative to your income, it's like plaque in the arteries that then begins to squeeze out the spending. And also because one man's debts or another man's assets, if those don't give a good real return, they will sell. So there's a dynamic that we're facing today in which they, that's happening to the government. It's squeezing out the debt service."
"But so Ray, you believe that human nature, no matter at which point in history almost repeats itself. Right? So it could be civil unrest. Well, we talk about populism, that there are patterns that you can see over the last like 2000 years."
"Yes. But that's not just a belief, it's an understanding of the cause effect relationships, the mechanics that show over repeatedly."
"Ray, talk to me about the, the five forces that you see shaping the world -"
"Throughout history. These same five forces work together to shape the world. The first is the money, debt, markets economy force, you know, debt increases relative to GDP, that whole dynamic. Okay. Money."
"Yeah."
"The second is internal order and disorder. Conflict. So that what happens is when there are larger wealth gaps and values gaps, then there are greater conflicts. And that dynamic. The third dynamic is geopolitics. The international world order. How does it operate? So since 1945, for most of it, we've been in the United States led world order, now we're having a unilateral world order with greater conflict. Number four acts of nature, droughts, floods, and pandemics have killed more people than wars and toppled more orders. So that's certainly an, an important influence, particularly related to climate. And number five, over long periods of time, the biggest influence is man's learning, particularly of new technologies. So these forces interrelate with each other. You know, the international creates defense expenditures and technologies change everything."
"But, Ray, all of these are, all the five source forces are being disrupted. Do you worry that this is even more unsettling than in previous cycles?"
"The previous cycles were pretty unsettling. You know, if you take the most analogous period, I would say we're in a period that's quite like 1937-38. You have a, a debt issue. Yeah. You have the internal conflicts of wealth and, and how things should be run. Disorder existed before democracies stop being democracies. So we're in a period that's very much analogous. That's plenty to worry about. Of course it can be worse, right? Because we now- our power to hurt each other's never been greater."
"I hate asking this because I don't like throwing around the world- world war, but, you know, could we be close to another World -"
"War? Well, we're in, we're in wars. Okay? There is a financial money war, there's a technology war, there's geopolitical wars and there are more military wars. And so we have a civil war of some sort, which is developing in the United States and elsewhere where there are irreconcilable differences."
"So how do you see it being settled actually? Where do you see the US going? Does it get settled? Does it?"
"Well either we will rise above it and realize that our common good is going to necessitate us dealing with it so that what works for most people is gonna work. I think that's a little bit idealistic. I have to be a practical person. And I would say that I think that these conflicts will become tests of power by each side."
"But Ray, will it really test institutions and will it change America forever? What, what the US actually stands for."
"Of course it's been, it's been changed and, and in history we have to recognize that all orders have come to an end and then there's a new order and there's a challenge. So I have a principle. If you worry, you don't have to worry. And if you don't worry, you need to worry. Because if you worry, then you will take care of what you're worrying about and you make it not happen. And if you don't worry, I, I believe that if we don't worry about these things, then we have greater risks."
"Ray, thank you so much for your time today."
"Thank you."