Big Technology Podcast - The Secrets Of Ray Dalio and His Dot Collector Transparency Software — With Rob Copeland

Episode Date: November 8, 2023

Rob Copeland is the author of The Fund: Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend and a New York Times reporter. He joins Big Technology Podcast to discuss his new book, offering a revealing look at Dalio's business success and the making of his legend. We talk extensively about Dalio's Dot Collector tool, which allowed his employees to rate each other in real-time on attributes like believability. Then we ask why so many would subject themselves to this type of workplace, and whether the tool actually worked. --- You can subscribe to Big Technology Premium for 25% off at https://bit.ly/bigtechnology Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Questions? Feedback? Write to: [e-mail]

Let's go inside the secrets at Bridgewater and of its founder Ray Dalio in an interview with the author of a revealing new book. All that and more coming up right after this. LinkedIn Presents. Welcome to Big Technology Podcast, a show for cool-headed, nuanced conversation of the tech world and beyond. Today we're going to talk all about Ray Dalio, his fun Bridgewater, and his famous computer system that let his employees rate each other in real time called the dot-com. collector, and we're going to do it with the author of a brand new book. Rob Copeland is here. He's a New York Times reporter and the author of The Fund, Ray Dalio, Bridgewater Associates, and the unraveling of a Wall Street legend. Rob, welcome to the show.

Thank you for having me. Thanks for being here. So let's talk about who Ray Dalio is and why you were interested in writing a full book about him. What sort of made him rise to that level? Sure. And sparked your interest. Sure. Well, first of all, I think people should know that I've known you for a number of years that I once ran into you at an Alaska Airlines lounge in which it's true it's true and neither of us were flying first class but we both had credit card access and we're filling up on

their waffle station before cross-country flight so that's some exclusive big technology news break right there but it was a great moment to bond I feel like yeah it's important to give listeners a little bit of context of our relationship here let's be in the full disclosure moment Look, I'm not a nobody here. I've seen you in a lounge. That's what I just want people to know. I feel like it's the perfect setup to talk about the world's biggest edge. There's a seamless seek here.

And I will eventually, at some point this hour, answer your first question. What I'll tell you is I've been a business reporter for more than, excuse me, for about a decade and a half. And for some majority of that time, I've been reporting on and around Bridgewater Associates. It's the world's biggest hedge fund, but I'm not super interested in them just because they're a hedge fund. You know, there's a lot of big, important, frankly, boring companies. And Bridgewater is anything but boring. Its founder, Ray Dalio, has become world famous for supposedly inventing these principles, these rules. He calls them principles for life and work.

And he wrote a bestselling book about it. He's the, these millions of people have viewed his TED talk. They listened to him on LinkedIn. He was interviewed by freaking Gwyneth Paltrow. He's really become this sort of pseudo-celebrity. He just become a figure far outside the financial world. And I think he's great fun to write about. Right.

And so the principles are not just about like how to invest, but they are about how to live your life, how to conduct business within your organization. And to me, the thing that put Ray Dalio on my radar is that his company practices some of the most insane transparency I've ever seen, including this dot collector piece of software that people sit in meetings with iPads and rate each other's believability and other attributes and they get a score to which, you know, supposedly they were then trusted within the organization to make decisions. Now, we're going to get into all of this and more, but that to me is like the fact that he tried to go outside of finance and become this business guru really is what makes them interesting. And we don't talk a lot about a lot of hedge fund managers on this show, but it made sense to dedicate an episode because of that. Well, and let's be honest, as a hedge fund manager, Ray Dalio was famous to people like me, people who are finance reporters at the New York Times. but as the inventor of the principles and this new way to live your life. And he literally calls it the Holy Grail.

He says, if you do this, you will be rich. That has made him incredibly famous and put him in, frankly, at a level of no other hedge fund manager I can think of. Right. And we'll get to the principles, but it's first important to note that Dallio got to where he was initially based off of some really good calls. I mean, he didn't just apparate into thin air and become this, like, you know, person sitting down with Paltrow and talking about, you know, how to live life. Like, he made great calls, including about two significant economic downturns that he was able to profit off of, in particular of the 2008, 2009 crash, where he himself pocketed something like $750 million. Talk about, like, before we get into the principal stuff and the dot collector, I mean, talk about, like, what initially. propelled Dalio to business success?

Sure. So there's two versions of this story. There's the version that Ray Dalio would tell you, and there's the version that my book, I think, breaks open. Let me tell you the Ray Dalio version, which is he starts Bridgewater. He's relatively unsuccessful, son of a jazz musician. He did go to Harvard Business School, but he starts Bridgewater in his apartment in 1975 and does incredibly deep economic research. He researches how nations, how governments work, how whether the currencies are going to rise or fall. And he begins to be pretty good at predicting economic trends. This makes him world famous in 2008 when he is credited with being one of the very few people to see that the subprime mortgage crisis is about to burst. And to his

credit, Ridgewater's funds do make money that year. And that's a year when the stock market crashes. And that really propels him into another echelon of a figure. How was he able to see the crash before it happened? He would say that he had studied for so many decades, how so many countries work that it was almost obvious in retrospect. He sends, he does have evidence, by the way. He's not just claiming that he did. He does write a weekly or a daily newsletter that he sends out to clients. So he was able to point and say, look, I was warning about this, sort of waved this letter around. And that got a lot of attention, not just in hedge funds, but invited to the White House,

became friends with Ben Bernanke, Tim Geithner. These are the top economic figures of that era. So you're saying that the reality is a little different than the story that he's telling? The reality is a lot different. And to be honest, Alex, it is something that even I didn't know until I really started researching for this book. And I did something that I recommend no one ever does. I went back and I had a research assistant. She was amazing.

Can I plug her? Her name is Abigail Somerville. She is truly the best. And we together read every single news article that Ray Dalio had ever been quoted in from 1975 onwards. And what we found was nonstop since the 1980s. Ray Dalio has been predicting economic calamity. Virtually every single year, he has predicted a giant crash. And so what happens in 2008 is he's not lying.

He did predict an economic crash of 2008. What he doesn't talk about very often is all the other years before that, that he predicted the same crash that never happened. But it's not like his fund lost money in the earlier years. And he was able to make a significant amount of money in the downturn. So, I mean, doesn't he, so, I mean, even the fact that he did cry wolf a lot, like the fact that he was able to take what he knew, put the strategies, into place and avert the catastrophe and actually make money.

And I mean, isn't that exactly what you're supposed to do as a hedge fund manager? Look, let's give him a ton of credit. In the 1980s, 90s, 2000s, most people on Wall Street and beyond still believe that you made money in the markets sort of through your gut, that you could quote unquote read the tape. They called it reading the stock tape. And that was how many managers made money. People like George Soros, who becomes a famous billionaire, that's how they did it. Ray had a different outlook.

Ray said, I will make, I will do research, and I will make these written rules, and I will follow these rules, even if my gut tells me otherwise. And he was fabulously successful at that. Look, he made billions of dollars before anyone really even knew who he was, and that's a credit to him. Okay. And so then, obviously, this stuff works, and he's like, well, I have this. the investing principles down, now I'm going to start applying them to management and life.

And this is how the principles start to emerge. Is that right? Exactly. So he, he's made his billions. He's made more money than we could ever spend, right? And he begins to say, what is out there besides wealth for me? And he realizes that these rules that he has for investing, they really come from his overall philosophical outlook. And his philosophical outlook can be boiled down to you should just be honest with one another you should just we should be able to stop this interview right now and i should say Alex professionally that question didn't work here's how i would have said it you should be able to stop me in the middle and say rob you're rambling and and then it should be impersonal and that if we could do that with one another we would we would come to a

better outcome because we would remove the emotions from it and we would just we would move on with our day. I feel like there might be some spiritual kinship between you and Ray Dalio on that front. You're not one to hold back your opinion. Well, I think here's the main difference between me and Ray Dalio, which we'll get into, is I'm not pretending that this is some high-minded philosophy. I can just tell you what my personality is, and I can tell you at that waffle bar at the Alaska lounge. I can tell you what your personality is. But I'm not getting in front of millions of people and saying, follow me into the abyss. Right. So let's talk a little bit about that abyss, right? So the principles are all about transparency. Like, is there anything else to them or does it really all boil down to, like, tell people how you feel? I mean, what's your, can you just give us some examples of what these are, how they're implemented in the firm and what, you know, what type of ground they cover?

So his overarching philosophy is called radical transparency, which means that things that could be, that would normally be kept secret, should be held out in the open. So, for instance, any meeting at Bridgewater should be taped and anyone should be able to listen into it and to weigh in on it later. This philosophy basically comes down to we should find the most believable person, the most trustworthy person, and get them involved in every decision in their, in their research. Now, the principles themselves, and we could talk about this for hours and we won't, but they basically boil down to seeing a natural order of things. He makes a lot of comparisons to the animal kingdom. He says, for instance, when the lion, I might have the animals here wrong, but the meaning is true.

When the lion eats the hyena, that's terrible for the hyena, but it's part of the natural order of things and it would fall apart if we do. didn't let the lion eat the hyena. So there is an appeal to that, right? You can't listen to what I'm saying and not say, okay, I see that. Yeah, and then how did it manifest itself in the firm? Well, the problem is it's very different in practice than how he has described it in person. So at the beginning in, say, around that 2008 financial crisis, the principles were really just sort of like one man's word. It was just a few sentences written on a piece of paper and it was a few nice metaphors and no one took it all that seriously. Sort of like how, you know, you walk into an

office, you walk into an apartment building and, you know, it's written on the wall. Have a sunny day. You know, it doesn't mean you have to like put that into your heart and take that with you all day. The problem is he keeps writing more and more principles and they get less philosophical and more literally. And they say things like if someone does something wrong, they prescribe for what he calls public hangings. So now we should learn from each other's mistakes by watching us metaphorically execute someone, which at Bridgewater would be firing them. He says that we should diagnose even the smallest problem. So if something goes wrong, if something as small as you know, the peas in the cafeteria are wilted one day, we should haul in the head.

of the cafeteria in front of video cameras, we should really probe, in his words, we should probe what happened, what does the, what thought process led to those peas? And we should frankly humiliate people. Yeah. And so that gets us into this dot collector example where people basically hold iPads and meetings and start rating their coworkers based off of their belief ability and other attributes. And then apparently that's the way that they wait, decisions in the firm. I want to talk about that at length when we come back to the break. So why don't we do that? We're here with Rob Copeland, the author of The Fund, Ray Dalio, Bridgewater Associates, and the unraveling of a Wall Street legend. We'll be back right after this to go deep

into the dot collector and real-time transparency at Bridgewater. Hey, everyone, let me tell you about the Hustle Daily Show, a podcast filled with business, tech news, and original stories to keep you in the loop on what's trending. More than two million professionals read the Hustle's daily email for its irreverent and informative takes on business and tech news. Now, they have a daily podcast called The Hustle Daily Show, where their team of writers break down the biggest business headlines in 15 minutes or less, and explain why you should care about them. So, search for The Hustle Daily Show and your favorite podcast app,

like the one you're using right now. And we're back here on Big Technology Podcast with Rob Copeland, author of the fund, Ray Dalio, Bridgewater Associates, and the unraveling of a Wall Street legend. Okay, so before the break, we teased a little bit about the dot collector. Let's just go with an example. Can you tell us a little bit about how this thing would collect feedback on people in real time? Sure.

So everything we've been talking about, all these ratings, what's happening is Ray and all the employees are rating themselves, or rating each other in categories like ability to think clearly, things of that nature. That's not a literal category. And each time I rate you, I'd be rating you right now, by the way, during this conversation. I might be saying, Alex, I'm not really feeling the critical thinking from you. I might be giving you a four out of 10 on critical thinking literally right now. I just put it into, I'd have an iPad with that. That would be a dot. Yeah, come on, Rob. I read the book. I mean, at least give me a six. I mean, ability to read. I'll give you a 10. the uh okay great but uh you could do by the way do the same you'd be able to see that i was doing that and you could say well like i'd give you a i'd give you a five on ability to diagnose truth so all of these ratings which are called dots they're all accumulated on something that bridgewater called it's baseball cards so it's essentially every employee uh all their ratings sort of just like a

you know a baseball player you'd be able to see their stats their their rbis and This is something called the dot collector. So it's collecting all of your dots. It's ingesting thousands of ratings in all of these different categories. And the idea being that we've collected all of these dots and that I should just be able to pull it up and say, if Alex and Rob are having a disagreement, I should be able to say, well, I can see that in all these other meetings, Alex has actually been judged to be pretty good at XYZ. and Rob has not. So I'm going to side with Alex on this one. How did this not like incite very vicious internal politics?

I mean, if you're walking out of a meeting and you have, do you see who's rating you what? Alex, it's cited the most vicious internal politics. You do see what people are rating you. You can rate them back. You can also take polls. So let's say I really believe, Alex, this conversation is going terribly. I think everyone agrees with me. I can stop this in its tracks, and I can put up a poll on the dot collector, and I can say,

do you think Alex is looking at this right, and people can vote? By the way, whichever one of us loses that vote, we're going to get a whole lot of negative dots. Really? I want to point one other thing that people might be thinking. Okay, so you've got this dot collector, but how can you force people to use it? You know, I've got a job. You've got a job. Maybe I just go throughout my day.

Maybe the peas in the cafeteria are wilted, but maybe that doesn't, I don't, that doesn't rise to the level of a dot for me. What Bridgewater starts doing is it starts telling employees, you have to rate a certain number of incidents per day. You have to put in dots. And not only that, but a certain percentage of your dots must be negative. so they are forcing you stack ranked exactly they are if there weren't internal politics before they they're now guaranteeing there will be because i can't just walk around and say great job guys

i i have and and i'll say ray dalio's defense here is remember his whole philosophy is trust in truth is to offer frank feedback so if you're not offering a certain amount of negative feedback, then we're never going to grow. Then we're just patting each other on the back. You know, Rob, it seems like this was kind of like the distilled essence of the feedback cultures we've seen. Like, it doesn't exist in a vacuum. The idea of being harsh with feedback doesn't exist just in Bridgewater.

You know, it's been the subject of books. It exists within Netflix to some extent. Meta has it, though I think a little bit softer than the Bridgewater, like actual constructive feedback, although everybody talks about feedback. I mean, do you see this as more of like a product of a moment and or did it influence that moment? I would say yes and yes, both. First of all, this is definitely the wildest, most extreme example of this idea. Reed Hastings and Ray Dalio actually there are a lot of similarities to their culture, and Ray has talked about it inside Bridgewater about how much he admires

what Reed has done what I would say is that technology the ability to have this dot collector the ability to rate in real time has sort of poured gasoline on this because it's very different remember it's very different if you and me we're not alone right now

unless this is the lowest rated episode in big technology history but the the if we're alone and I'm saying Alex let me just look at you straight straight on and just say like what you said in that meeting it. I didn't think that came in your mouth very well. Here's how I would have said it. Probably there's a shared trust between us. We can move on. It's very different when we start

talking about doing this essentially in public on a huge scale. And Bridgewater had, you know, 2,000 employees at peak when everyone can see what everyone else is getting rated for in real time. And then it's a snowball rolling down the hill to hell. Yeah. Is it like an Uber driver where you get a certain low rating and you're booted off the app it's it's it's well yes first of all literally if you don't have high enough ratings in certain categories you will get what bridgewater calls sorted sorted out they don't call it getting fired they call it sorting you sounds like a mafia term you said it not me the uh what i would say is like an uber driver you know if you get an uber if you see your uber driver has what's a bad rating now by the way it's like 475 i think i'd like

I get kicked off Uber. Anything under like 4.6, you're like, might as well not be driving. If we run out of things to talk about, this ends up with you and me checking our Uber ratings together. But the, and I better be higher than you, Alex. I don't think there's a chance of that. No, no, there's no. I'm not the kind of guy who gets a high Uber rating. I'm the kind of guy who says, take the bridge, not the tunnel.

That's a New York joke for our West Coast listeners. The problem is if I can walk into a meeting and I can already see that you, Alex, have a lot of red dots, have a lot of bad feedback on, say... You can finish me off? And I should finish you off, by the way, because there is very little incentive for me to go against the curve. Because if I stand up for you, now I'm putting myself out there publicly. And... You know, yeah, go ahead. Well, I spoke to someone, I spoke to a lot of people with this experience, but I spoke to someone who was there for only about three months, and she had a pretty rough transition at Bridgewater, but she wanted to stay.

She wanted to learn to use the principles to learn more about herself, but she said it was just a negative feedback loop. If you mess up in your first week, you are marked as the weak prey, and then it just gets piled and piled onto you, and you can't stay. Now, I want to say something really important here, which is everything that I've just said to you, if I, if Ray Dalio were here right now, he would tell me that I was only talking to disaffected employees and that to many people, that many people love it. But I can tell you that for this book, I went and I got the internal HR emails. I got their own memos. Their own memos, people telling Ray, this is a self-defeating loop, that people are scared that at any moment, they may be fired. And the real scary thing for me about Ray Dalio and Bridgewater is that he knew, he did know, he does know, and he will continue to know that this is the real impact of the

principles and he apparently does not care. Well, he's also, there are uneven ablars, right? I mean, if you looked at, he did that 60 Minutes interview or it was either them or Ted or maybe both where he's talking about the dot collector and the reporters like in the room being like wow they're like really raiding based off of the system and he's like showing it off and I just think that like in the popular imagination there's like no feeling that like what is or no like statement that what is happening is pretty messed up absolutely look and we've seen this you see this in in tech all the time these these these tech heroes who are here to save us, I was blown away in researching this book.

You know, Adam Grant, very, very famous organizational psychologist, Wharton Professor writes bestselling books. He goes in and he sees Ray Dalio and he witnesses this and he writes that it's based in it, he devotes a whole chapter of his book to it and he writes that it's basically one of the greatest things he's ever seen. Later, Ray Dalio hires Adam Grant to a paid job as a consultant. This is a talk about a feedback loop. I mean, you can decide that for yourself. But yes, 60 minutes, CBS this morning, so many interviewers, they just sat, heard Ray Dalio's

version of things and said, well, this is fantastic. Listen, I like you a lot, Alex. I don't think you should run for president. I don't, like, I, it's just like he got put on this other level and no one just stopped and said, hold on a second. How about we just switch the angle of it? Switch the aperture. Why don't we ask the people who work for him what it's really like?

Well, anyway, did other companies try to embody this? Like, did other companies try to build the same software? So this was Ray's great dream, and he talked about it endlessly inside Bridgewater, and they spent more than $100 million on this technology. His great dream is that the principles and the dock collector would be adopted by other companies, And he went to some of the most famous men in business. You know, he told people inside Bridgewater. He was talking to Elon Musk about doing this at Tesla.

He visited Jack Dorsey when Jack Dorsey was running Twitter. You know, Bill Gates endorsed the principles. The wild thing is that all of these quite famous and successful people, they sat and they listened and they never said anything publicly against Ray. But most of them did not actually adopt these ratings tools, which, should tell you quite something right so he had these like what would you call them outwardly constructive relationships with silicon valley royalty but when he tried to sell them on the actual product that he bet his whole life on it was a no well and he did he was successful uh with one company sort of so he was successful with coin base i don't know exactly how but he got coin base to do a trial

program where they brought the dock collector to Coinbase. And spoiler alert, the reaction among Coinbase employees was quite poor. And when reporters asked Coinbase about this, Coinbase's defense was it was not that this was their defense. It was this product was so unpopular that not enough employees used it to make it worth continuing. So they didn't, they neither defended nor insulted it. They just said nobody wanted it. And I know that that was very devastating for Ray. Right. And I guess like thinking about the culture inside Bridgewater, I mean, Bridgewater knew that they were perceived

as like cult like and somewhat negative on the outside. And, you know, being in New York at the like height of Ray Dalio's career and having people getting offers there, like, I I had friends, or even before the Hyatt, like, I had friends who were very clear-eyed telling me that I got this offer for Bridgewater, and I don't know about it. It seems like the culture there sucks, and it's very harsh. So I want to ask you a question, because you've been speaking to the people that decided to take those job offers and work there. Why would people subject themselves to such an environment? And by the way, I want to add something. I talk to people who still work there.

I didn't speak to just disaffected people. I spoke to a lot of people with very complicated feelings. about Ray and about Bridgewater. Remember, this goes back to the principles, and the principles say, if you follow these rules, you will achieve a higher level version of yourself. It's a challenge.

And it's, it is a way, it's one of the best pitches I've ever heard, more than money, is he's pitching you a chance to achieve a better version of yourself. So a lot of people, even people who otherwise are clear, said, well, if I put myself through this gauntlet,

and at the end of a year, two years, 10 years, setting aside the money, I may literally figure out what I'm good at. This could change my life. And that's still what Bridgewater pitches to this day. They're still going out and saying, we operate on principles and we're a place where you can challenge yourself. It reminds me of, I don't know if you've seen these TikToks

of these, like, you know, fake military camps for men who want to toughen themselves up and they pay like thousands of dollars to be yelled at by, you know, former Marines like going up muddy hills and becoming quote unquote men after that. So I haven't seen those TikToks because my TikToks are all shirtless men giving me advice on weightlifting. I don't know why the algorithm thinks that. But the, I will tell you that Ray actually compares Bridgewater to the intellectual Navy SEALs. These are, these are his words. So he absolutely would agree with that, that comparison. And those people, remember, you're in your TikTok, which apparently you have a little bit of a sadomasochist thing, which I think we should explore on a, on a future episode of this program. I'll have you back for sure. Well, I'll have you back just for that.

I'll interview you. But the, remember, you're paying them. This is even better. Bridgewater pays you. So, you know, maybe you're having a terrible time. and for many of the people who are in the book, as you follow their way, you can see how difficult this is for them. But they are getting paid a lot of money.

So I'll skip to your next question, which is a lot of people ask, you know, is it a cult? I would say, I can't answer that question for you because Bridgewater has threatened me with many, many lawsuits, and I'd like to, you know, keep my one-bedroom apartment. But I will say, if it's a cult, it's a cult where you could pay a lot of money to stay. so that's just another way to that that's another reason to stay money notwithstanding do you think people actually get that benefit out of the experience that they're looking for i mean do you think bridgewater you know iron sharpens iron so to speak do you think bridgewater can turn people into like the essential form of themselves by dealing by by living within these systems so for this

book i spoke to hundreds of people people still at bridgewater people who've left Bridgewater. And I truly try to find those true believers. And I will just tell you that even people who Ray considers his closest acolytes don't necessarily fully buy into the principles. I don't. But everybody who leaves say it's not, says it's not worth it? Not everybody says it's not worth it, but everyone says it's nothing like what he says it is. that the principles and this dot collector are are weaponized tools to be wielded principally by Ray and those in his favor against anyone who is uh who's out of favor it's not I mean there's a lot of crying yeah there's a lot of crying in your book obviously um I wonder what it is about

our work culture today that makes people I mean yes I understand that people want to become this distilled version of themselves and want to go through this, but just it's work. You know, it's crazy to me. It's just your job. I know, but what do you think it is about the fire work culture that makes people say, yeah, that sounds okay. Well, I'd like to talk about the crying for 10 seconds because probably my favorite thing I ever heard back from Bridgewater from, you know, I fact check this book. I offered them a chance to comment. We spent years going back and forth with Ray and his lawyers and Bridgewater's lawyers. One of my favorite things I've ever heard from a Bridgewater PR person is we have no record of people crying regularly at the office because there's

I mean there's a scene isn't the opening scene of your book somebody it's not even regular crying it's the display of crying for learning purposes that struck me there's the opening scene of book as someone just absolutely breaking down that being recorded and put in the transparency library and then Ray encouraging people to watch it absolutely I this is where I'd like to pause to say the book is actually a lot of fun. I didn't want to write a downer of a book. This book is a ride. It was a ride for me to write it and report it. But yes, there is a real darkness here and people, it's not just crying. They're being broken down in front of the cameras for everyone, for what many people would say, pleasure. But I do want to get back to your

question because I really love this idea that our job has to be our identity. And that is central to Bridgewater's pitch, is that the principles are for life and work. Now, look, Google, what's Google pay for the laundry for their employees, all these tech companies encourage you to stay more and more at the office. Bridgewater did even more than that. They made sure their headquarters was so far away from New York that many of their employees lived with each other during the week. This became their whole life, and it really does become a closed society off of the grid.

And with, I think, some really upsetting results, I'm going to keep talking about this because I love it because I, so I work for the New York Times. It's my day job. This is my real job. This book is my passion. And people ask me all the time, you know, they'll point to something in the times that they didn't agree with. reporters tweet they didn't like. And they'll, they'll not just ask me about it, but they'll basically say it's my fault. And I always try to say to people, you know, I don't walk around with a New York Times tote bag. This is my job. This is not my identity. I love my job. I'm very

lucky to work here. I'm proud of this news organization. But I'm not going to reflexively defend everything the New York Times does. At Bridgewater, you have to be fully in. You are 100 percent believe that the principles, or you have to say you believe in the principles. But it is something that it's like, it's not surprising, it's maybe shocking, but not surprising in our work culture. Like, I'm glad you have this disassociation in some ways or you're between your identity and your job, but our work culture does have this sort of like, you know, willingness to put ourselves through hell for employers. Absolutely. And your employer now, it feels like they almost don't want an employee who treats it as a job. They're hiring you for a job,

but they want you to say, no, I would do anything. Exactly. One of the, you know, I, you know, I used to live in San Francisco for a few years. This is one of my favorite. Well, here's another story. I helped you move a dresser out of your apartment. So it wasn't just that, uh, it is. It wasn't just that Alaska lounge, but go ahead. Well, but let's, let's really be honest. You actually helped me move that dresser out for a third friend. You were such a good friend that you, it wasn't even, it was a CB2 dresser. This episode is now sponsored by Creighton Barrow. But the, I will say this whole Silicon Valley mentality, which is now taken over the

workplace, like writ large, which is act like an owner. You know, everyone should act like the owner of the company. You should treat the company's money like it is your own. That's all well and good if you're the owner. But I don't think we should all act like the owner. owner of our workplace because um our workplace can disappoint us you know definitely did this stuff work i mean i actually like we've been talking about this all throughout about the dot collector about how brutal it could be and the one thing that would almost excuse it will not even excuse it but

rationalize it shall we say is if the people who were rated highest on they were super believable and you know they were given widely way to make investments and they made those investments and it worked so what they mean obviously it's got to be a closed loop system and and a successful one to say okay this this thing is real and effective what actually happened okay so this is really the the fateful piece of logic that links bridgewater and the principles together which is that ray's ray would say that he built this whole investment system, he became so rich off of these rules, and these rules led to the principles. So that just got me thinking, what is this investment system? When he talks about it, it is so

absurdly general. He'll say, I could be long or short anything in the world. You know, that basically means at any point I could hold or any asset. It's, you know, just mumbo-jumbo. And I watched many interviews with him talking about the investment system where he just never said anything concrete. My career as a business reporter is talking to really successful, really smart people, or at least people who think they're really smart. And they don't usually have trouble as expressing like, oh, yeah, we think that the Eurozone is in trouble. So we're going to short the Euro.

That's their job. Good on them. It's my job to tell people about their perspective. So for years, I tried to crack the secret of Bridgewater's investment system. What are these rules, these timeless and universal rules that Ray talks about? And as I kept investigating, this remarkable thing happened is that Bridgewater's main fund. It just kept doing poorly for years upon years since from the end of 2010, almost uninterrupted for a decade and more. it was just falling so far behind the markets.

And when I started talking to investment staffers, they said, you know, what Ray thinks is a rule isn't what you or I think is rule. A rule to me is if X happens over here, Y happens over here. To Ray, if Ray thinks of it, it's a rule. If it's Ray's opinion, it's a rule. And that just got me, then I just, it all clicked for me. that there is no investment secret. There is no secret sauce.

It's just Ray. Here is where my lawyers would like me to tell you that lawyers for Bridgewater Associates say there is an investment system. They just won't tell you about it. Full stuff. So is your belief that all this data collected in the dot collector? Was it used for investment purposes? I believe the dot collector is my real.

research would tell me is just a giant distraction, that it all had to do with nothing to do with investments. But it was a metaphor. It is a metaphor for how Bridgewater deals with investments, that Ray and Bridgewater would like to say that we have a similarly data-driven approach for our investments. What I can tell you is I've spoken to people intimately involved with those investments, people still intimately involved with those investments. And not a single person has ever been able to identify an actual quantitative, what I would consider to be, a 2023 level quantitative rule. And to the contrary, people have given me many, many, many examples of what Ray wanted Ray got. You know, it struck me in an excerpt you published in the

Times, you know, talk about a whole firm that rates itself this way. And then you would imagine if everybody's rating each other this way, that everybody would be able to make investments. But you say that at Bridgewater's peak, which was 2,000 employees, fewer than 20% were assigned to investments or related research, and something like 10% were in an inner circle that was actually making these investments. Even fewer. Right. So this whole notion that these rankings were being used to weight people's ability to invest,

just on its face seems ridiculous. There was something, is something called the Circle of Trust at Bridgewater. It's about 10 people. They sign lifetime contracts. And Ray allegedly lets them in to see the real secrets of Bridgewater. They have to swear not to work anywhere else. Everyone else at Bridgewater has functionally no specific idea of what the firm is doing with its money. Yeah.

Sounds like Scientology. I'm really glad that those were. came out of your mouth, Alex, not mine. Okay. Well, that's just my perspective. I don't know. Anyway, so you tried to work at Bridgewater? That's what Ray Dalio was saying in a tweet storm directed at you a few years ago.

So talk a little bit about your history with him. It's great fun. Okay. So I graduated college in 2009, right after Ray Dalio, you know, made a fortune predicting the financial crisis. Couldn't get a job anywhere. I was moved back home with my parents. And I applied to so many jobs in 2000.

2009, 2010. One of them was a hedge fund called Bridgewater Associates. And I was living in a three-bedroom apartment with four people. I was actually having a lot of fun, to be honest. I was an absolute wreck back then. And I applied to have no idea anything to do with them. I think I had one or two interviews. They didn't take me.

I never thought about it. I didn't think about it again for a few years. And then a few years later, actually, they reached out to me. me. And they tried to hire me for a job, editing their economic research. I had another few interviews. I turned them down. None of this was too extraordinary to me. I have unsuccessfully applied, Alex, to many jobs in my lifetime. I don't know if you have to, but I don't bet a thousand on this. And once I started writing about Bridgewater, around 2015, it became very clear to me that Bridgewater had no idea that I had applied there.

They had no idea that I had any history there. And so I, I mean, I didn't know anyone there. I had interviewed what on the phone or in person once or twice. And then eventually Ray figured out that I had interviewed there and he just, he just went apeshit. He started attacking me, calling my bosses, saying I was a disaffected person who couldn't make the cut there. You know, one of my, this is the book that I wrote is not a book about how. journalists are heroes i am not character in this book i don't figure out some great thing and

swoop in and save the day but i will say there is at the very end of the book there is a chapter about my history with ray that was enormously fun to write um because it's been enormously fun to be honest tussling with this uh super charismatic i'll put it billionaire for the last better part of a decade Yeah, let's end here. So we've spoken through this entire conversation about a way of working and a way of investing. And we've talked about how it's framed in high-minded terms. And we've talked about people trying to achieve their essential or their greatest possible condition by working at a place like this using the principles and how Dalia was trying not to just be a businessman, but in some way a guy who guides people's lives. After Sam Bankman-Fried's whole situation and the movement where they were trying to be effective altruists and make all this money so they can improve the world,

I'm starting to get a little wary of business people who talk about anything else than, I mean, of course, it's okay if your product solves a problem. But if you're talking about how you're trying to improve the world through your company, that's when I start to get a little bit concerned. Do you think we're going to start to look at this stuff differently? or are we going to continue to allow people to use this language to cloak what's going on behind the scenes? I think for better or worse, we're all looking for a hero. And for the last decade or so, maybe longer, business people have stepped into that void for a lot of reasons that could be the subject of probably another whole podcast. And I hope that our experience with not just Ray Dalio, but, you know, Adam Newman and Travis Kalanick, and Sam Macon-Fried and all of these people who said they were going to, quote, unquote, disrupt for the better our lives.

I hope we realize that the hero does not, is not always the guy with the biggest checkbook. The book is The Fund, Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street legend. The author is Rob Copeland, also a reporter for the New York Times. I enjoyed reading it. I enjoyed speaking with you, Rob. Thanks so much for coming on. I'll be back. All right.

Thanks, everybody, for listening. Thank you, Nick Gwattney, for handling our audio and LinkedIn, for having me as part of your podcast network. Always great to come to you here today, here every Wednesday. So thank you for listening. We're back on Friday, breaking down the news with Ron John Roy. Thanks again for listening, and we'll see you next time on Big Technology Podcast.