Ray Dalio

After a few months of tracking, I realized the handwritten journaling system I was using was a little more tedious than I expected.

So out of sheer necessity, I gave up the pen and paper and started using an app called Dalio.

This definitely made things easier from a tracking perspective.

This process was starting to make a difference and I felt a little bit more

Some of the open source models have been really good.

I heard that they're the biggest partner to Ray Dalio's fund, I believe.

Is that right? But it seems like there's some traction there.

You have some data.

In a matter of months, that's really impressive.

I think things are really starting to work there.

And especially if they're working with Ray Dalio's fund, I can see why understanding how good their models are at finance is important.

And also it's open source.

A friend recently recommended this book to me, The Changing World Order by Ray Dalio, who is a operator of a very large hedge fund.

So kind of a finance book, but really it's like a history book.

It's this gentleman's perspective on investing from the standpoint of the long cycles of history.

To me, this is the things that are very beautiful, you know? in a space these are the things that have deep meaning and if we think about being healthy in the world uh to me that in a large measure is about finding a healthy way of being i've got a playlist on the channel uh the creative act of weight loss uh weight loss insights from rick rubin i take his book the creative act which is meant for artists and people painting and things and i say let's take some of these concepts into our life and our health process How do we create joy in a place? How do we create grounding and connection in a place so that our experience of being in it is possible? This is like connecting into the whole point of the show that I'm trying to do today, changing world order and saying, we've got these cycles flowing through things.

What I really want is just a sustainable, long-term process that we don't get knocked out of.

That was Ray Dalio's big suggestion.

Don't get knocked out of the investing game during some wipeout or getting over leveraged or something like this.

Yeah, the changing world order, it's interesting.

Today's video is in response to a number of viewers asking if I could explain what the risk parity investment strategy is and how does it work.

In addition we are going to learn how Ray Dalio who developed this strategy is also partially responsible for the existence of Chicken McNuggets.

Imagine an investment portfolio that does well during inflation and during deflation, a portfolio that works during times of economic growth and when there's economic stagnation, a portfolio for the best of times and the worst of times.

This is the idea behind Bridgewater Associates' all-weather portfolio, the largest and most famous risk parity fund.

Let's try to understand the ideas behind this approach and see if any of these insights might be beneficial to you in managing your own savings.

Ray Dalio founded Bridgewater Associates in 1975.

At the time, he did actively invest his own savings, but his initial business involved providing risk consulting to corporate clients.

One of his clients was the fast food restaurant chain McDonald's.

Yeah, definitely.

I kind of wonder if what Napoleon Hill is talking about is kind of the same thing as Ray Dalio, where you invest in 10 things saying yes to 10 things.

Nine of them might be bad, but that one good one far surpasses all the rest.

I would say it depends.

There's no such thing as really indecision.

What happens is something else will come along and make the decision for you.

If nature abhors a vacuum and you're bringing up Ray Dalio, it's not just asymmetric risk.

I'm talking about standards.

Something not right about that.

That's the measure Ray Dalio focuses on.

It's also why Seth Klarman talks about a margin of safety.

Right now, that margin is very thin.

Yeah, right.

Right? So then, you know, then you start to get into the deleveraging playbooks that Dalio has sort of put out there, whether it's financial repression or debt restructuring, printing money, right? You know, all the things that nation states do.

And then, you know, Dalio's got like the kind of two different, he says, like, there's a beautiful deleveraging where you do just the right amount of all these things and it works out great.

And then there's the ugly one.

And when you read the two, what becomes really apparent right away is you really could only do the beautiful deleveraging if you have a healthy partisan harmony, actually working for the good of the country.

And again, with so much household wealth tied to property values, the economy is very likely to require further intervention to avoid a more painful decline.

With even hedge fund manager Ray Dalio highlighting that policymakers need to quote, do what it takes, which will require a lot more than what was announced.

And we'll just have to wait and see how things further develop for the people of China.

Nonetheless, with all that, stocks still remain up quite a bit, which has still maintained a lot of attention from investors outside of China, especially with the Golden Dragon Index, an index which represents stocks listed in the US but who have most of their business within China, is still up over 30% even after its recent pullback.