Ray Dalio’s eccentric approach to management

Principles could be helpful for investors – but not in the way author Ray Dalio intended.


Published by Simon and Schuster, £25

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Ray Dalio, founder and chief executive of US asset manager Bridgewater Associates, is known for his eccentric approach to management. In this book, he argues for "radical transparency", says Alexandra Frean in The Sunday Times. Other companies, argues Dalio,are dysfunctional because they do not allow employees to speak freely. Dalio instead "requires employees to share brutal assessments of each other" in the hope that "if people put their honest thoughts on the table, the best ideas will rise to the top".

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Many of Dalio's principles "are sound but not exactly new", says Tom Buerkle for Reuters Breakingviews. Others "are obvious even if they bear repeating". Some, however, are "simply banal". Worst of all, some of the best colour of the original principles, which he had up on his firm's website, has been left out the note, for example, that if you criticise someone behind their back at Bridgewater, "you are called a slimy weasel". The principles seem to rankle: a quarter of new hires at Bridgewater "don't last 18 months". Indeed, "his co-chief executive and presumed heir apparent, Greg Jensen, suddenly stepped down from that post last year". It seems that "the firm's vaunted testing, profiling and baseball cards failed to spot that risk".

The 567-page tome "has little to say about investing, which is Bridgewater's core business and what some would say is his greatest skill", and smacks of "hubris", says Peter Atwater in the FT. It could however be helpful for investors in an unintended way. Chief executives' books "can be powerful contrarian indicators", so it is possible that the author could be unwittingly calling a big peak in the equity markets". It feels as though Dalio "is sharing what served him and his firm well just as the seasons and the game are about to change".

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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