My Principles and How I learned them

I learned my principles over a lifetime of making a lot of mistakes and spending a lot of time reflecting on them. Since I've a kid, I've been a curious, independent thinker who ran after audacious goals. I got excited about visualizing things to go after, had some painful failures going after them, making some mistakes that prevent me from making the same sort of mistakes again, and changed and improved, which allowed me to imagine and go after even more audacious goals and do that rapidly and repeatedly for a long time.  So to me, life looks like the sequence you see on the opposite page.

I believe the key to success lies in knowing how to both strive for a lot and fail well. By failing well, I mean being able to experience painful failures that provide big learnings without failing badly enough to get knocked out of the game.

This way of learning and improving has been the best for me because of what I am like and because of what I do. I've always had a bad rote memory and didn't like following other people's instructions, but l'd love to figure out how things work out myself. I hate school because of my bad memory but when I was twelve I fell in love with trading the markets. To make money in the markets, one need to be an independent thinker who bets against the consensus and is right. That's because the consensus view is baked into price. One is inevitably going to be painfully wrong a lot, knowing how to do that right is critical to one's success. To be a successful entrepreneur, the same is true: One also has to be an independent thinker who correctly bets against consensus, which means being painfully wrong a fair amount. Since I was both an investor and entrepreneur, I developed a healthy fear of being wrong and figured out a approach to decision making that would maximize my odds of being right.

-Make believability-weighted decisions

My painful mistakes shifted from "I know I'm right" to having one of "How do I know I'm right?" They gave the humility I needed to balance my audacity. Knowing I that I could be painfully wrong and curiosity about why other smart people saw things differently promoted me to look at things through the eyes of others as well as my own. That allowed me to see many more dimensions than if I saw things just through my own eyes. Learning how to weigh people's inputs so that I chose the best ones ---- in other words, So that I believability-weighted my decision making-- increased my chances of being right and was thrilling. At the same time, I learned to 

-Operate by principles

that are clearly laid out that their logic can easily be assessed and you and others can see if you walk the talk. Experience taught me how invaluable it is to reflect on and write down my decision making criteria whenever I made a decision, I got in the habit of doing that. With time, my collection of principles became like a collection of recipes for decision making. By sharing them with the people working at my company. Bridgewater Association, and inviting them to help me test my principles in action, I continually refined and evolved them. In fact, I I was able to refine them to the point that I could see how important it is to:

-Systemize your decision making

I discovered that I could do that by expressing my decision-making criteria in the form of algorithms that I could embed into our computers. By running both decision making system- i.e, mine in my head and mine in the computer- next to each other, I learned the computer could make better decision than me because it could process more vastly information than I could, and it could do it faster and unemotionally.  Doing that allowed me and the people I worked with to compound our understanding  over time and improve the quality of our collective decision making. I discovered that such decision making system- especially when believability weighted -- are incredibly powerful and will soon profoundly change how people around the world make all kinds of decisions. Our principles-driven approach to decision making has not only improved our economics, investment, and management decisions, it has helped us make better decisions in every aspect of our lives.

Whether or not your own principles are systemized/computerized is of secondary importance. The most important thing is that you develop your own principles and ideally write them down, especially if you are working with others.

It was that approach and the principles it yielded, and not me, that took me from being an ordinary middle-class kid from Long Island to being successful by a number of conventional measures--like starting a company out of my two-bedroom apartment and building it into fifth most important private company in the U.S(according to Fortune), becoming one of the one hundred most rich people in the world (according to Forbes), and being considered one of the one hundred most influential (according to Time)。 They led me to a perch from which I got to see success and life very differently than I had imagined, and they gave me the meaningful work and meaningful relationships I value more than my conventional success. They gave me and Bridgewater far more than I ever dreamed of.

Until recently, I didn't want to share these principles outside Bridgewater because I don't public attention and because I thought it would be presumptuous to tell others what principles to have. But after Bridge Water successfully anticipated the financial crisis of 2008-2009, I got a lot of media attention and so did my principles on Bridgewater's unique way of operating. Most of the stories were distorted and sensationalistic, so in 2010, I posted my principles on our website so people could judge them for themselves. To my surprise, they were downloaded over three million times and I was flooded with thank-you letters from all over the world.

I will give them to you in two books-- Life and Work Principles in one book, and Economic and Investment Principles in the other.

How these books are organized.

Since I have spent most of my adult life thinking about economics and investing, I considered writing Economics and Investment Principles first. But I decided to begin with my Life and Work Principles because they're more overarching and I've seen how well they work for people, independent of their careers. Since they go so well together, they are combined here in one book prefaced by a short autobiography, where I'm Coming From.

Part I: Where I'm Coming From

In this part, I share some of the experiences-- most importantly, my mistakes-- that led me to discover the principles that guide my decision making. To tell you the truth, I still have mixed feelings about telling my personal story, I worry that it might distract you from the principles themselves and from the timeless and universal cause-effect relationships that inform them. For that reason, For that reason, I wouldn't mind if you decided to skip this part of the book. If you read it, try to look past me and my particular story to the logic and merit of the principles I describe. Think about them, weigh them, and decide how much, if at all, apply to you and your own life circumstances --- and specifically, whether they can help you achieve your goals, whatever they may be.

Part II: Life Principles

The overarching principles that drive  my approach to everything are laid out in Life Principles. In this section, I explain my principles in great depth and show how they apply in natural world, in our private lives and relationships, in business and policy making, and of course at Bridgewater. I'll share the 5-Step Process I've developed for one's goal and making effective choices. I'll also share some of the insights I've gained in psychology and neuroscience and explained how I've applied them in my private life and in my business. This is the real heart of the book because it shows how these principles can be applied to most anything and most anyone.

Part III: Work Principles

In work principles, you'll get a close-up view of the unusual way we operate at Bridgewater. I'll explain how we've coalesced our principles into an idea meritocracy that strive to deliver meaningful work and meaningful relationships through radical truth and radical transparency. I'll show you how this works at granular level and how it can be applied to nearly any organization to make it more effective.  As you will see, we are simply a group of people who are striving to be excellent at what we do and who recognize that we don't know much relative to what we need to know.  We believe that thoughtful, unemotional disagreement by independent thinkers can be converted into believability-weighted decision making that is smarter and more effective than the sum of its parts. Because the power of a group is so much greater than the power of in individual, I believe this work principles are more important than the life principles on which they're based. 

What will follow this book

This book will be followed by an interactive book in the form of an app that will take you into videos and immersive experiences so that your learning will be more experimental. The app will also get to know you through your interaction with it in order to provide you with more personalized advice.

This book and the app will be followed by another volume containing two other parts, Economic and Investment Principles, I will pass along the principles that worked for me and that I believe might help you in these areas.

After that, there will no advice I can give that will not be available in these two books, and I will be done with this in this phase of my life.