2221 books total
As 2018 is getting closer to its end (we’re at 78% / 11 weeks left), I’ll dedicate the next Friday emails to the best books that I read throughout the year. Please note that these are NOT books launched in 2018 – if that’s what you’re looking for, sorry to disappoint you. I don’t usually read books that are new and “trending”, unless they’re written by authors whose work I’m already familiar with. Instead, these are just some thoughts about the books that I learned most from this year and I want to share them with you. And this is the first email sent to our subscribers.
A year ago, in one of The CEO Library newsletters, I was writing about a book that had just been launched and all entrepreneurs and investors in the world were talking about it. It was Ray Dalio’s “Principles“.
I resisted the initial instinct of buying and reading it, and instead chose to wait. This is one of the ways to filter if a book really is worthy of my time or not. Most of the times, after the launch buzz cools off, I won’t hear about it ever again. But, some times, they keep coming back in my life one way or another.
One year later, “Principles” was still alive and kicking in the conversations going on around me. People I respect and trust were praising it so, during a relaxing summer vacation spent on a Greek beach, I decided the time has come to give it a chance.
Now I understand why it’s so praised by everyone who read it. I devoured it. It’s THE manual on how to make better decisions in your life and how to think more efficiently. This book will become a classic must-read for everyone – and not just entrepreneurs or folks who are interested in Ray Dalio’s area of expertise.
Ok, I guess I should first start by saying a few words about the author. Ray is currently one of the world’s most successful investors and entrepreneurs, and also among the wealthiest people in the world.
In 1975, he founded Bridgewater Associates, what’s now the largest hedge fund (manages about $150 billion in global investments – I can’t even grasp what that amount of money means and put it into perspective).
A few years after he started his company, he confidently predicted that the global economy was heading into a depression and positioned himself accordingly in the stock market.
Long story short, he was wrong. He lost so much money that he went broke, had to borrow money from his parents in order to pay the people who worked with him, and almost closed his firm.
He now sees this as the best thing that has ever happened to him, as it forced him to shift his attitude. It gave him the humility he needed to become the successful investor that he is today.
Ray became famous after the 2008 market crash, when he was one of the few who predicted it and positioned himself accordingly on the market.
After that happened, people wanted to understand the fundamentals on how he operated, so he wrote “Principles”. It started as a free PDF that he posted online and spread by word of mouth – 3 million people ended up downloading it. He turned it into a book that was launched last autumn and ended up in my Greek vacation 🙂
Here are a few ideas and quotes from “Principles: Life and Work“:
1. “Encountering pains and figuring out the lessons they were trying to give me became sort of a game to me. The more I played it, the better I got at it, the less painful those situations became, and the more rewarding the process of reflecting, developing principles, and then getting rewards for using those principles became. I learned to love my struggles.”
Ray treats his life as it were a game. Each problem is a puzzle that he needs to solve. By solving it, the reward he’ll get is a principle that helps him improve the decision making process and avoid going through the same thing in the future.
He believes that everything happens over and over again through time. By studying history and the underlying patterns, we can better understand the cause and effect relationship between events, and develop principles that can help us better deal with them.
2. “Perfection doesn’t exist. It’s a goal that fuels a never-ending process of adaptation. […] rather than getting stuck hiding our mistakes and pretending we’re perfect, it makes sense to find our imperfections and deal with them. […] The key is to fail, learn, and improve quickly.”
After his big 1982 failure, he became obsessed with minimizing risks and, instead of thinking he’s right, he’s asking himself all the time how can he know he’s right.
He surrounded himself with smart people who can be radically open-minded and transparent, and who thoughtfully disagree with him. They built Bridgewater on these values: radical truth, transparency, idea meritocracy(they’ll make decisions in a way that lets the best ideas win), and building meaningful relationships – all these led the company towards excellence and innovation.
3. “People who changed their minds because they learned something are the winners, whereas those who stubbornly refuse to learn are the losers”.
By being radically open-minded and transparent you can accelerate the learning process, enhance feedback’s efficiency and create change.
However, the purpose of having thoughtful disagreements isn’t to convince the other persons that you’re right. Instead, it’s to find out the truth and decide what to do about it. The motivation should be a genuine fear of missing important perspectives.
That’s why I’m always gravitating towards those who can speak as candidly as I do about strengths and failures, and prioritize the process of learning. I encourage everyone to let me know if they think I’m wrong or missing something. It’s also why I keep asking our readers for feedback on the emails we send. 😀
4. “Having expectations for people (including yourself) without knowing what they are like is a sure way to get in trouble.”
Ray attributes most of his success to everything he learned about how our brains are wired. He talked with many psychologists, neuroscientists and other people in the field, and also read lots of books on these subjects.
People are wired differently, they have different strengths and weaknesses, they think and emotionally response differently – these are all things that we need to deal with instead of hiding our heads in the sand and hoping that we’ll get the right people in the right roles.
5. “While you can have virtually anything you want, you can’t have everything you want. Maturity is the ability to reject good alternatives in order to pursue even better ones.”
In the past months I kept coming back to this quote (I think I mentioned it here before a couple of times as well). It helped me eliminate some distractions and give up on activities that were heading nowhere, such as a personal newsletter that I used to send.
If you’re not convinced yet, you can use these links to decide whether to read the book or not:
1. This TED talk recording from April 2017 where Ray talks about how he built his company, why they embrace radical transparency and how that works: Ray Dalio – How to build a company where the best ideas win – TED 2017.
2. Ray’s conversation with Tim Ferriss from September 2017 (one of my favorite episodes of Tim’s podcast): The Tim Ferriss Show #264: Ray Dalio, The Steve Jobs of Investing.
3. Shane Parrish (Farnam Street) also had a great podcast episode of The Knowledge Project with Ray Dalio: Life Lessons from a Self-Made Billionaire: My Conversation with Ray Dalio.
Bonus: a 30-minute long animated video created in 2013 by Ray, on how economy really works. Don’t know about you, but I never studied this in school and always felt that I have a huge gap knowledge. Ray’s video makes economy really easy to understand and lay the foundation: How The Economic Machine Works.
And if you already read Principles and want to dig deeper into Ray’s work, you should know that he just released a new book for the tenth anniversary of the 2008 financial crisis. “A Template for Understanding Big Debt Crisis” overs how debt crises work and their history. He also gives a framework for understanding the financial system, anticipate crises and navigate through them while also producing significant positive returns.
If there’s only one thing to keep in mind from this long post, it should be this question that will help you improve your decision-making process: How can you make sure you’re right? How can you override your ego, become aware of your subconscious mind, and get past your blind spots?
P.S. thanks Fratele Alex for my photo above!
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