I finally finished making my way through Principles: Life and Work by Ray Dalio. I had heard so many good things about the book and had really enjoyed listening to some of the podcasts and speeches the author has given. The book was very well organized and presents a very interesting approach for running an organization. While I did learn a lot and have a lot of new things to think about now, I didn't think the book was as life-changing or revolutionary as some of the hype makes it out to be.
The organization, Bridgewater, does sound unique, and I'd love to experience firsthand how believability-weighted decision making happens in real-time using all the tools he described. I want to feel what the idea-meritocratic culture is like and if it is in fact so different from other places and how embodied all these principles really are.
My first biggest takeaway overall from the book is the idea that one should consider what principles one is operating under in general and write them down. I had done some of the former but not the latter, and after reading this book, I started my own list of written principles. My second biggest takeaway is how to maintain a balance between open-mindedness and assertiveness while arguing about a decision.
Other cool things I took away were the concepts of believability (formalizing and quantifying how trustworthy someone is), which psychological/personality tests they believe in, and the collection of tools they use to make their principles actionable on a daily basis.
As I was reading this book, I did catch myself wondering whether so much thinking of one's organization as a machine and doing everything idea-meritocratically and believability-weighted hampers any of the human elements of working on a company together. It felt like this approach could err dangerously close to thinking of one's team members as robots or automatons, just action figures with baseball cards and stats on where you can trust/believe them, and a machine to make them do what you need -- as opposed to three-dimensional, creative, wistful, soulful, erratic, emotional, complex people that are working together, with foibles and all, to try to achieve something. I don't know if the two views are diametrically opposed, but this book's approach felt to me to be a lot more mechanical and rigid (principled, obviously) in its treatment of people, and I wonder what any drawbacks (or unintended second order consequences) of that might be. The author explicitly wrote about the value of relationships, so I know this element is important for him, and I know he believes that radical transparency, honesty, and tough love is in the end the best for relationships. I just wonder how well it really treats people and makes them feel in practice.
My full notes are below.
One of my favorite books from last year was Angel: How to Invest in Technology Startups--Timeless Advice from an Angel Investor Who Turned $100,000 into $100,000,000 by Jason Calacanis. It was actionable, no-nonsense, and really informative. I loved the crisp and clear framework and suggestions; the reader can agree with them or not, but at least it's practical and direct.
I just started getting my feet wet in angel investing last year, and I plan on spending the next 6 months doing a deep dive into it as a personal experiment for myself to see if I like the process and the work (Jason's motto in the book is "do the work").
Below are my main takeaways and notes on the book. (One telltale sign I liked a book is when my notes Google Doc is 15+ pages long, as it is for this book.)
Over the last few months, I've been reading through Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger, and today I finally finished it. It represents a pretty full collection of all of Munger's public lectures and most influential publications, a true compendium of practical wisdom.
It was nice to read this big, heavy, long book over an extended period of time because I got to develop a pretty good grasp of Charlie's way of thinking, seeing the same examples and patterns repeated across the talks and drawing my own connections.
It's amazing how passionate he is about improving education and providing people with much better mental models and checklists to avoid disaster and cognitive failure.
Below are my personal biggest takeaways and notes.
1 portrait of Charles munger
Parents encouraged reading and gave books as gifts for holidays
Cicero, on a life well spent
Pride in a job well done
Self improvement so long as breath lasts
Daily learning something
Always return borrowed car with full tank of gas
Educating kids at dinner table
Morality tale and downward spiral tale
Admit mistakes and learn from them immediately
Do the job right the first time. Don't make excuses when screw up. Just fix it.
Kids had jobs
Taught kids to be skeptical and contrarian
Couch message in anecdote and deliver in group setting to not single out
Buying books for whole family
Ritual and tradition, buying kids suits
Desire to understand exactly what makes things happen
Figure out what ur best at and keep pounding away at it
Ch 2 munger approach to life, learning, decision making
Multiple mental models
Business as an ecosystem; everything related
Willingness to change mind
Not buying or selling often
Big money is in the waiting not in the buying or selling
If can only invest 20 times in life, u will think much harder and load up on what believe in
Focus on what to avoid first
Think in 2 approaches: rational interests at play and subconscious psychological factors
Circles of competence
Margin of safety like backup system in engineering
Checklist before doing deal
Honesty best policy
Ch 3 mungerisms: Charlie unscripted
Profit more from always remembering the obvious than from grasping the esoteric
Wait for the fat pitch
Something not worth doing is not worth doing well
Reliability is extremely important
First step to success in anything is becoming interested in it
Have wide mental models array and use them all
Jump jurisdictional boundaries
Need to use all mental models as a checklist
Use advertising for Pavlovian conditioning
To persuade, appeal to interests not reason
Nonegalitarianism: focus on your best people instead of just fairness
1 reward and punishment super response tendency
Granny's rule: eat your carrots before dessert; do unpleasant tasks before rewarding yourself
2 liking/loving tendency
3 disliking/hating tendency
4 doubt avoidance tendency
5 inconsistency avoidance tendency
6 curiosity tendency
7 kantian fairness tendency
8 envy/jealousy tendency
9 reciprocation tendency
10 influence from mere association tendency
Always tell us the bad news promptly. The good news can wait.
11 pain avoiding psychological denial
12 excessive self regard tendency
13 overoptimism tendency
14 deprival super reaction
15 social proof tendency
16 contrast misreaction
17 stress influence
18 availability misweighing
19 use it or lose it tendency
20 drug misinfluence
21 Senescence misinfluence
22 authority misinfluence
23 twaddle tendency
24 reason respecting
25 lollapalooza tendency