Notes on Principles by Ray Dalio

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.

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Intro
Any success more related to managing how much he doesn’t know
Just collection of recipes to deal with different situations
Operating with clear principles that can explained
Write down your principles
Don’t blindly adopt from others
Think for yourself to decide
What do you want
What do you think is true
What should you do to achieve what you want in light of what is true
Strive for a lot and fail well
Independent thinker who bets against the consensus and is wrong a lot
Believability weighted decisions
Weight others’ inputs
Write down decisions and criteria used and reflect on it over time
Systematize decisions and program them algorithmically
This book about life and work principles. Next one about economic and investment principles. 
Part 1: where I’m coming from
Autobio brief
Don’t worry about specifics of his life. Just focus on evaluating principles and if any apply and could help my life. 
Part 2; life principles
5 step decision process
Part 3: work principles
Idea meritocracy
App will follow the book

Part 1: where I’m coming from
1 my call to adventure
Bad rote memory for facts with no reasons for being the way they are
Don’t like following instructions
Curious and like to figure things out for self
Lots of small jobs outside the home for money
Read free annual reports
Got lucky with initial stock trades in high school
2 crossing the threshold
Learned to meditate using ™
Don’t believe government officials regarding currencies and economy
Logical cause and effect relationships that happened before to others
When everyone thinks the same thing, it’s usually priced in and a bad bet
Commodities broker experiences
Started bridgewater
Helping clients manage money and trading Len account
Exotic trips and people
Modeling markets as machines
Livestock models and agriculture
Regressions on handheld calculator and color charts by hand
Recorded trades in notebooks
Measure demand by amount spent not quantity bought like in economics models
See markets as machines. Write down models and principles for them. Program those into computer so it can make decisions for me. 
Can never be sure of anything even supposedly safe bets
Meaningful work and meaningful relationships more important than making money. They are primary goals because no amount of money can buy them. 
Wrote down his thoughts and reflections on market daily and published
Pursued work as father as seriously as career
3 my abyss
Lost a lot in his business and all employees with public bets wrong
Was wildly overconfident
Way to prevent being wrong is by engaging independent thinkers to argue with him
Just wanted to be right even if answers didn’t come from him
Known When not to have an opinion
Develop and test timeless and universal principles systematized 
Balance risks to keep upside and reduce downside 
Idea meritocracy: weighing opinions according to their merits
Acknowledge and brace your weaknesses
Go slowly when picking. Steven seemingly two eclipsed paths
4 Road of trials 
Computers key for econometrics
Kept records of past decisions and turn into algorithms and backrest with historical data
Brains working with computer
Run in parallel with brain and compare and update whoever is wrong
Sold research and consulting services
Alpha overlay to take additional risky bets beyond market
Traveled a lot internationally
For employees valued creativity and hard work and not experience
Make lots of incorrelated bets
Pure alphas (no beta exposure to market)
Systematizing our learning from mistakes
Built a public error/issue log which got tracked and root causes diagnosed: what happened, severity, who is responsible, what done about it
Bring problems and disagreements to surface
Radical truthfulness vs happy employees
3 agreements
Put honest thoughts on table
Have discussions and disagreements where people willing to shift perspectives as they learn
Process for deciding how to proceed without resentment
5 the ultimate boom
Created first inflation indexed bonds
Created all weather Portfolio strategy for his own trust assets and allowed clients to invest
Risk parity investing
Explicitly write down and refine principles
Decision making library
Record all meetings and make available to everyone
Psychometric testing to learn how ppl think differently
Had his kids tested by psychologist to give good roadmap for their development
Meyers briggs for all employees
Creating baseball cards for all employees that listed their stats and can be passed around when assigning tasks
Don’t assign detail oriented ones to people who don’t focus on those details 
Son bipolar
Two full time jobs
Overseeing investments and overseeing company
Finding strategies that would have worked in all past times and all countries
Returned money when got too big
People working alongside computers Best and better than AI
6 returning the boon
Needed to remove key man risk
Decided to stay on as a mentor
Shapers of industries with original visions
Wanted to study all other shapers for other industries
Big fan of Jobs
Spoke with Walter isaacson
All shapers he talked to scored low on “concern for others” in personality tests
Care more about achieving goal than pleasing others
Gathering data on what people are like. Same types of people in same types of situations usually have same types of results. 
Wanted to make management decisions in the same process as investment decisions that were much more systematic via computer
Management principles also need to be codified into rules to be followed by system
New tools
Dot collector
Baseball cards
Job specing 
Video: how the economic machine works
Book: hero with a thousand faces
Book: river eden by Dawkins 
Book: the lessons of history
Book: on the role of the individual in history
Wrestling with philanthropy
Leave only enough for sons to have excellent healthcare and education and initial boost to get career started but that’s it
Give away significantly more than half
Exploring ocean exploration
View donations as investments so want philanthropic returns
7 my last year and greatest challenge
What didn’t know much greater than what did know
Better governance systems
8 looking back from higher level
Seeing all experiences as “another one of those”
Satisfaction not from achieving goals but from struggling well
Principles
Look to patterns of things that affect you and cause/effect relationships in them
Build up list of things you encounter and situations you are in and what you do about them
List won’t be unique to you and will tell you what you need to develop principles for

Part 2: life principles
1: embrace reality and deal with it
1.1 be a hyper realist
A: dreams plus reality plus determination is successful life
1.2 truth (understanding reality) is most important factor determining outcome
Understand the bad stuff because the good stuff will take care of itself
1.3 be radically open minded and transparent
A: Required for rapid learning and effective change
B: don’t let fears of what others think of you stand in your way
C: will bring more meaningful work and relationships
1.4: look to nature for how laws of reality work
Nature as a system much smarter than man
Optimizes for the whole not the individual
If you see something you don’t like or understand, assume you are the one that’s wrong
A: don’t get hung up on how things should be because you’ll miss how they really are
B: to be good, something must operate consistent with reality and be good for evolution as a whole
C: evolution is single greatest force in universe and only thing that’s permanent and drives everything (energy can only be reconfigured)
Primary purpose for all life is to be vessel for DNA which came from a long time ago
Technology and language also evolve and pass from generation to generation 
Perfection doesn’t exist
D: evolve or die
Fail, learn, and evolve quickly
1.5 evolving is life’s greatest accomplishment and reward
A: individual incentives must be aligned with group goals
B: reality is optimizing for the whole and not for you
C: adaptation through rapid trial and error
D: realize you are simultaneously everything and nothing and decide what you want to be
E: what you will Be depends on the perspective you have
1.6 understand natures practical lessons
A: maximize your evolution
B: no pain no gain
C: to gain strength need to push limits
1.7 pain plus reflection equals progress
Pain button nap in appendix
A: feel the pain instead of avoid it
B: embrace tough love
1.8 weigh second and third order consequences
1.9 own your outcomes
Internal locus Of control
1.10 look at the machine from a higher level
More objective view
A: think of yourself as a machine operating within machines
Right design and right people
B: Compare outcomes with goals to know how to modify machine
C: distinguish between you as designer of your machine and you as worker within your machine
Designer/manager more important than worker
D: see self objectively and see weaknesses
E: successful people can rise higher than selves objectively and address weaknesses
If you can’t do something well then need to fire yourself from doing and hire someone else
Be happy you found out you’re not the best at it
When find weakness have 4 choices
Deny
Try to fix
Only do this if the thing is consistent with your nature 
Try to find way around
Change what you’re doing
F; asking others for help in areas they are strong in and you are weak in
G: hard to see yourself objectively so need to rely on panel of evidence and feedback
H: if open minded and determined can go after anything
Don’t confuse what you wish was true with what is true
Don’t worry about looking good. Worry about achieving your goals. 
Don’t overweight first order consequences relative to second and third order
Don’t let pain stand in the way of your promise
Don’t blame bad outcomes on anyone but yourself
2 use the 5 step process to get what you want out of life
Loop
1 have clear goals
2 identify and don’t tolerate problems standing in way of achieving your goals
3 accurately diagnose the problems to get at their root causes
4 design plans to get around those problems
5 do what necessary to get designs through completion
Step 1
When going through each step, just focus on that step instead of worrying how will achieve subsequent steps
2.1 have clear goals
A: prioritize
B: don’t confuse goals with desires
Desires often just first order like yummy food instead of goals like healthy body
C: decide what your really want in life by reconciling goals and desires
D: don’t mistake trappings of success with res thing
E: never give up just because you don’t think goal is attainable
F: great expectations create great capabilities 
G: almost nothing can stop you if have great flexibility and self-accountability
H: know how to deal well with setbacks
2.2 identify and don’t tolerate problems
A: view problems as opportunities to improve
B: don’t avoid problems just because rooted in harsh realities you don’t want to confront
C: be specific in identifying your problems
D: don’t mistake cause of problem with real problem
E: distinguish big problems from small ones
Focus on ones that when fixed will yield up high returns
F: once identify problem, don’t tolerate it
Develop Fierce intolerance of badness of every kind regardless of it severity
2.3 diagnose problems to get at their root causes
A: focus on what is before deciding what to do about it
Diagnosing can take 15 min to an hour
B: distinguish proximate causes from root causes
Proximate causes usually verbs (actions)
Root causes usually adjectives
C: knowing what someone is like will tell you what to expect from them
2.4: design a plan
A: go back before you go forward
Consider how you got here and where want to go
B: consider your outcomes as if produced by a machine and look down on the machine to improve it
C: there are many paths to goal. Just need one. 
D: think of your plan like movie script of who does what over time
Sketch out broadly first then refine 
E: write down plan and measure progress against it
F: doesn’t take a lot of time to make plan
Designing precedes doing
2.5: push through to completion
A; great planners who don’t execute go nowhere
B: good work habits underrated
C: establish clear metrics
2.6: weaknesses don’t matter if you find solutions
A: look at pattern of your mistakes to see at which step of 5 step process you typically fail
B: everyone has at least 1 big thing standing in way of their success. Find yours and deal with it. 
Need humility
2.7: understand your own and others’ mental maps and humilities
3 be radically open minded
3.1 recognize your two biggest barriers
Ego and blind spot
A: ego barrier
Accepting criticism, deepest fears
B: your two yous like to control you
Higher and lower parts of you
Lowest usually in control
Don’t let your need to be right win over need to know truth
C: blind spot barrier
Each has own blind spots
3.2: practice radical open mindedness
Believability
Successfully accomplished thing in question
Strong track record of at least 3 successes
Have Great explanations of their approach when probed
3.3: appreciate the art of thoughtful disagreement
Use questions rather than statement
Not about arguing
Open minded and assertive
Describe back to person you heard what they said to make sure you got it
2 minute tile of not interrupting
Explore ideas with most believable person you have access to
3.4 l: triangulate your view with experts who disagree
3,5: recognize signs of close mindedness to watch out for
Caring more about being right
Making statements more than asking questions
Focus on being understood than understanding others
“I could be wrong but here’s my opinion”
Block others from speaking
Trouble holding two thoughts at once
Lack sense of humility
3.6 understand how can be more open minded
Recognize own mental pain
Meditate
Be evidence based
4 understand that people are wired very differently
Book smarts not all
4.1 understand the power of knowing how your mind works
A: born with good and bad attributes
Baseball cards
Adjectives
Actions people take
Believability 
People rated each other
4.2 meaningful work and relationships programmed into brain
4.3 understand great brain battles to get what u want
A: conscious in battle with subconscious 
B: constant struggle between thinking and feeling
Amygdala hijacking
C: reconcile thinking and feeling
D: choose habits well
Book: power of habit
Cue
Routine
Reward
Operant conditioning
Using pain to trigger reflection
E: train lower level you with love
F: left vs right brain
Right more lateral thinking
G: understand how much brain can and can’t change
4.4: find out what you and others are like
Psychometric assessments
Mbti
Workplace personality inventory
Team dimensions profile
Stratified systems theory
Also experimenting with The Big 5
A: Introversion vs extroversion
B: intuiting vs sensing
C: thinking vs feeling
D: planning vs perceiving
E: creators vs refiners vs advancers vs executors vs flexers
Help match to role in company
F: focusing on tasks vs goals
G: WPI characteristics
Workplace personality inventory
H: shapers
Unique type of visionary and achiever of details
Everyone has strengths and weaknesses and important roles to play in life
4.5 getting right people into right roles
5 learn how to make decisions effectively
5.1 biggest threat to good decisions is harmful emotions and it’s a two step process: learning must come before deciding
5.2 synthesize the situation at hand
Consider believable people
Don’t overweight any one data point
Don’t overweight the new over the great
5.3 synthesize the situation through time
Rates of change and level of things
Approximations and by and large estimates fine for most purposes
80/20 rule
Be an imperfectionist
5.4 navigate levels effectively
Different zoom levels
Use terms above the line and below the line to establish level of conversation
Above is main points and below is sub points
5.5 logic and reason best tools for synthesizing reality
5.6 make decisions as expected value calculations
Prob and reward for right and prob and penalty for wrong
Always try to increase probability of being right by getting more info and stress testing your thinking even when you think you are right
5.7 prioritize by weighing value of additional info vs cost of not deciding
Separate must dos from like to dos
Wouldn’t it be good to do x is bad reason to do it
Don’t mistake possibility from probability
5.8 simplify
5.9 use principles
5.10 believability weight your decision making
5.11 convert principles to algorithms and put into computer
Can then backtest and apply in different scenarios
5.12 be cautious about trusting AI without deep understanding
Expert systems
Mimicking/pattern matching
Data mining
Tough when future different from past

Part 3: Work principles

Life principles applied to groups
Work principles must align with group members’ life principles
Organization is machine with two parts: culture and people
Problem solving looping
Tough love good for work and relationships
Tool called Coach to help pick correct principle for given situation
Ch 1 trust in radical truth and radical transparency
1.1 you have nothing to fear from knowing the truth
1.2 have integrity and demand it from others
A: don’t talk about others behind backs. Always send reports. 
B: don’t let loyalty stand in way of truth
1.3 create environment where everyone has access and no one can hold back info
A: Speak up, own it, or get out
B: be extremely open. 
Just don’t filter. 
C: don’t be naive about dishonest
1.4 be radically transparent
A: use transparency for justice
B: share the things that are hardest to share
C: keep exceptions very rare
Exceptions
1 very private matters that don’t affect broader community
2 where sharing would put long term of company at risk
3 where value of sharing low and cost high like compensation
D: make sure people given info know responsibility for how to handle it
E: provide info to those who can handle it well and deny it to those who can’t or get rid of them
F: don’t share info with organizations enemies
1.5 meaningful relationships and work self supporting
2 cultivate meaningful work and relationships
2.1 be loyal to common mission and not to anyone who is not operating consistent with it
2.2 be clear about what the deal between two people is
A: give more consideration to others than self
B: understand difference between fairness and generosity
C: know what line is for what fair is
D: pay for work
2.3 size of org can become threat to relationships
Departments up to 150 people all aligned to mission
2.4 most people pretend to operate in your interest but operate for self
Billable hours
2.5 treasure honorable people who work even when not supervised 
3 create a culture where acceptable to make mistakes and unacceptable not to learn from them
3.1 mistakes natural part of evolution process
A: fail well
B: don’t feel bad about your and others mistakes
3.2 don’t worry about looking good but achieving goals
A: get over blame and credit and focus on accurate or inaccurate
3.3; observe pattern of mistakes and see if product of weaknesses
3.4: remember to reflect when you experience pain
A: be self reflective
Calm down in tough moments
3.5 know what types of mistakes acceptable and not and don’t allow people to work for u making the latter
4 get and stay in sync
4.1 conflicts essential to good relationships because they are how people align to principles
Tool called Dispute Resolver
A: surface areas of possible disagreement
B; distinguish idle complaints (chirping) from substantive
C: remember every story has other side
4.3 be open minded and assertive at same time
Watch out for people who are embarrassed not to know
4.4 if it’s your meeting to run, manage the conversation 
A: be clear who the meeting is for
B: clear agenda
C: clear type of meeting, right number of ppl
Watch out for topic slip
Be clear on level of convo
Assign personal responsibilities
2 minute rule before interrupting
Achieve completion in conversations
4.5 great collaboration like jazz
Too many people bad
4.6 when u have alignment cherish
4.7 if can’t sync on shared values then consider cutting out of life
5 believability Weight your decisions
Successful track record and can logically explain why
Tools like baseball cards and dot collector track it
All votes calculate equal weighted average and believability weighted average
If votes align then move on
If not then try to resolve or go with believability weighted one
For some decisions a single responsible party (RP) can override
5.1 idea meritocracy requires considering merit of each person's ideas
A: if u can’t successfully do something, don’t give opinion to those who can
B: everyone has opinions and most are bad
5.2 find most believable people possible who disagree with u and understand their reasoning
5.3 think about whether your role should be teacher, student, or peer
5.4 understand how people came by their opinions 
Dot collector track records al public
5.5 disagreeing must be done officially
Best to choose 3 believable people who will disagree with each other
5.6 everyone has right and responsibility to make sense of important things
5.7 Pay more attention to whether the decision-making system is fair than whether you get your own way
6 recognize how to get beyond disagreements 
6.1 principles can’t be ignored by mutual agreement 
Same standards apply to all
6.2 right to complain and disagree not the same as right to decide
6.3 don’t leave important conflicts unresolved
Narcissism of small differences
Don’t get stuck in disagreement. Escalate or vote. 
6.4 once a decision is made everyone should get behind it even if they disagree
See things from higher level. You are just part of the system. 
Coach tool connects situations and principles
6.5 idea meritocracy cannot go against organization 
Declare Marshall law only in emergency
6.6 if people don’t want to operate by principles, then principles will fail
7 remember that the who is more important in the what
7.1 your most important decision is who you choose to make your responsible parties
7.2 The ultimate responsible party is the one who bears the penalty if it doesn’t get done right
Make sure everyone has someone they report to
7.3 remember the force behind the thing
8 hire right because the penalty is huge
8.1 match the person to the design
Write spec sheet for job using same qualities as baseball cards
Don’t design job to fit people
Think through which values, abilities, and skills you’re looking for (in that order)
Values deepest u fight for
Abilities are things from psych tests
Skills are learned tools
Character, common sense, and creativity
Process for choosing people should be systematic and scientific
People hiring machine with goals and continuous improvement
Look for people who sparkle
Track records of recruiters
Look for candidate having outstanding performance in some way
8.2 people are built differently and suitable for different jobs
Use and interpret personality assessments
People don’t change al that much
Look for people who see themselves objectively
8.3 think of your team like sports manager: no one person has all qualities but everyone must excel
8.4 Pay attention to people's track records
At least three passed successes
If inexperienced person then have guardrails and supervision
Check references
Performance in school not predictive of work success
Impractical idealists harmful
8.5 don’t hire people for just the job. Hire people you want to share your life with. 
Look for people with lots of great questions
Show candidates your worts to stress test them
8.6: compensation: provide both stability and opportunity 
A: pay for the person not the job
B: make performance metrics tied to comp
C: pay more than fair
D: focus more on making pie bigger. Find people who will argue you should take more of the pie. 
8.7 generosity and consideration more important than money
8.8 great people hard to find so think about how to keep them
9 constantly train, test, and evaluate people
9.1 people you manage will go through personal evolution 
Trainee and apprentice
Teach people to fish and don’t give fish
9.2 provide constant feedback
9.3 evaluate accurately not kindly
In the end accuracy and kindness the same thing
Think about accuracy not implications
9.4 recognize tough love most important 
9.5 don’t hide your assessments of people
Build them bottom up
Squeeze the dots
Piece of data/observation and your judgment of what it means
Don’t oversqueeze a dot
Focus on pattern over time
Performance surveys
Put responsibilities into checklists then calculate metrics of what percent of tasks they completed
9.6 make process of learning what someone is like open, evolutionary, and iterative
Public metrics
9.7 knowing how people operate more important than knowing what they did
Pay more attention to ththe swing than the shot
Probe people’s thinking and reasoning
Categorize mistakes based on problem with learning or ability
Ability problem can’t be fixed
9.8 when reality in sync with someone about their weaknesses then the weaknesses are probably true
Should take no more than 6-12 months to know someone after lots of dots
Continue evaluating through their tenure
Keep asking if would hire them for the job after all you know and if not get them out
Evaluate employees with same rigor as candidates 
9.9 train, guardrail, or remove people. Don’t rehabilitate them. 
Rehabilitation is to change values and abilities which is usually not possible
Don’t collect people
Be willing to shoot people. Love the people you shoot. 
9.10 goal of transfer is best highest use of a person to benefit community as a whole
Have people complete their responsibilities/follow through on their swing before switching roles
Year in job is good guideline before switching
9.11 don’t lower the bar
10 manage as someone operating a machine to achieve a goal
10.1 look down yourself and your machine from a higher level
Constantly compare outcomes to goals
Great managers are organizational engineers
Create process flow diagrams
10.2 everything u deal with should have two purposes
To move you closer to your goal
To help you build and train your machine
Everything is a case study
Conduct discussion at machine level and case level
When making rules, explain the principles behind them
10.3 understand difference between managing, micromanaging, and not managing 
Orchestrate rather than do
10.4 know what your people are like and what makes them tick
Develop full profiles on all, values, abilities, skills
Tools, Issues logs, metrics, checklists
10.5 clearly assign responsibilities
Stick to own responsibilities 
Watch out for job slip without being thought through
10.6 probe machine deep and hard
Ask people what working and not
Don’t stay too distant
Daily written updates from all
Check and verify what people say
Make probing transparent
10.7 think like an owner and expect others to do that
Vacation doesn’t mean neglecting responsibilities 
Force people to do difficult things
10.8 plan for key man risks
Have successor/replacer trained and apprenticed
10.9 don’t treat everyone the same. Treat them appropriately. 
10.10 great leadership not what cut out to be
10.11 hold yourself and people accountable and have them hold you accountable 
Be explicit in expectations 
10.12 communicate plan and metrics clearly
10.13 escalate when u can’t handle responsibilities 
11 perceive and don’t tolerate problems
Opportunities to improve machine
11.1 If you’re not worried then you need to worry and if you’re worried then you don’t need to worry
11.2 design a machine to oversee whether things are good enough or not good enough or do it yourself
Beware of groupthink 
Taste the soup
Taste testers
Pop the cork: ask for feedback
People closest to certain jobs know the best 
11.3 use specifics for problems not generalizations like we or they
Name names
Mistakes must be connected to individuals by name
11.4 Don’t be afraid to fix the difficult things
Easier than not fixing them
Unidentified es problems worst
What, who, when
12 diagnose problems to get to root causes
Problems aren’t one offs
Don’t depersonalize the problem and what about the person caused it
Connect to prior problems and diagnoses
12.1 ask what who when diagnosing questions
Is the outcome good or bad and who is responsible for it
Is rp incapable
How should have machine worked
Stay at level of machine
Did machine work as it should have. Proximate cause. 
Don’t focus on rare events
Is the root cause a pattern
Who should do what differently
Lack of training vs ability
Identify which principles were violated
Avoid Monday morning quarterbacking
What should quality person known and done
Don’t confuse someone’s approach and their circumstances. Either can be bad. 
Root cause is action not reason. Adjective not verb. 
Capacity vs capability issue
12.2 maintain synthesis by diagnosis continuously
12.3 diagnoses should produce outcomes
12.4 drill down technique to find dept causing 80% of problems
List problems and names
Identify root causes
Unclear rp or rp not handling responsibilities well
Keep asking why many times
Create plan like movie script of who does what over time
Metrics
Execute and track
12.5 diagnosis foundational to quality and relationships
13 design improvements to machine to fix problems
13.1 build your machine
Takes longer than just doing task
13.2 systematize your principles
Think through decision criteria
Write down
Turn into Algo
13.3 good plan should resemble movie script
Consider second and third order consequences
Use standing meetings
13.4 design is iterative process
Power of cleansing storm
13.5 build org around goals than tasks
Build org top down
Double do (two people doing and comparing) instead of double check 
13.6 create org chart as pyramid with no crossing lines 
Don’t do work for another dept
Watch out for dept slip
13.7 create guardrails as needed
Like two people dancing
13.8 keep strategic vision same while making tactical changes
13.9 have good controls so not exposed to dishonesty of others
Investigate and let ppl know u will
Don’t assume others act in your interest
Have ways to audit the auditors
Use public hangings
13.10 have clearest possible reporting lines
Abilities more important than job titles
Think about leverage
Ray operates at 50:1
For every hour he spends with someone, the other person works 50 hours
Managers below him have ratios 10:1
Updated manual
Written principles
Leveragers people best
13.11 everything will take more money and time than you expect
About 1.5x longer
14 do what u set out to do
14.1 work for goals ur excited about
14.2 recognize that everyone has too much to do
Say no and prioritize
Delegate
Improve productivity
Creativity, character, and wisdom
14.3 use checklists
14.4 allow time for rest and innovation
14.5 ring the bell
Celebrate successes
15 use tools and protocols to shape how work is done
Words alone not enough
15.1 tools valuable for idea meritocracy
All meetings recorded and used as virtual case studies to train people by pausing and asking questions
Use tools to capture data and train algos
System operates like a coach
16 don’t overlook donuts
Important to have proper governance and prioritizing good of community
16.1 must have checks and balances
Make sure no one so powerful that irreplaceable
Beware of fiefdoms
16.2 a single Ceo not as good as great group of leaders
Do-Ceo model overseen by board
3 cios
16.3 no rules will substitute for good partnership
Putting it all together
Why work with others
Leverage
Relationships
Money
Conclusion
Will release tools
Appendix
Tools from bridgewater to be released in principles app
Coach
Library of situations and principles. Ones of those. 
People give feedback and coach the coach
Dot collector
Run in meetings to get real-time feedback and see others thoughts 
Participants constantly give each other positive or negative dots on a dozen attributes
All dots visible in real-time
Helps people see others perspectives
App can give individualized coaching when your opinion differs from others
Highlights nutty questions of important disagreements like when u disagree with believability weighted majority
Provides real-time polls and voting (binary and numerical) to track believability and equal weighted results
Baseball cards
Dots and past evidence of believability and test results
People profiles 
Simple text summary of baseball cards
Combinator
Takes data from baseball cards and helps match to job
Issue log
Records mistakes and learnings
Anything thst goes wrong must be logged with severity
Provides metrics of performance
Pain button
Pain + reflection equals progress
Record emotions as they feel them and then later come back and reflect on them when clear headed
Prompt for what to do about it in future
Graph of frequency and causes of pain and follow through
Like therapist in pocket 
Dispute resolver
Asks series of questions to help resolve
Helps come up with believable people to get insight
Daily update tool
10-15 min to write brief email of what did, issues pertaining to them, and their reflection
Now pulled into one tool and dashboard and tracks morale and any issues to escalate
Contract tool
Agreements of who does what after meetings
Helps people make and monitor their and others commitments to them
Process flow diagram
Managerial tool to see org as machine
Process outcome diagrams for all roles and how work flows among them to intended outcome
Policy and procedures manuals
Living operating manual
Metrics
Connected to people

References
Power of habit
Beyond religion