The Jordan Harbinger Show - 389: Ray Dalio | Principles of an Investing Pioneer Part One

Episode Date: August 11, 2020

Ray Dalio (@RayDalio) is the founder of Bridgewater Associates -- the largest and best-performing hedge fund in the world -- and author of New York Times bestseller Principles: Life and Work and the upcoming The Changing World Order: Why Nations Succeed and Fail. This is part one of a two-part episode; be on the lookout for part two later in the week! What We Discuss with Ray Dalio: The predictable cycles that contribute to the rise and fall of great and once-great nations on the world stage -- and where Ray sees these cycles heading now. Why there are so many people denying the current pandemic as a hoax in spite of endless evidence before their very eyes. How we, as emotional human beings, should prepare ourselves for the less comfortable cycles we're bound to experience in the future. Ray's firsthand account of China's rapid evolution into a technological superpower over just the past few decades. Why we have Ray to thank (or blame) for the invention of the Chicken McNugget. And much more... Full show notes and resources can be found here: jordanharbinger.com/389 Sign up for Six-Minute Networking -- our free networking and relationship development mini course -- at jordanharbinger.com/course! Like this show? Please leave us a review here -- even one sentence helps! Consider including your Twitter handle so we can thank you personally!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Coming up on the Jordan Harbinger Show. You have to have the best life possible. That's the main thing. If you have the best life possible, and it's some clarity as to what that is, and you're using money to help get there, that's terrific, great. But don't make money itself the gold.

Welcome to the show. I'm Jordan Harbinger. On the Jordan Harbinger show, we decode the stories, secrets, and skills of the world's most fascinating people. If you're new to the show, we have in-depth conversations with people at the top of their game. Astronauts, entrepreneurs, spies, psychologists, even the occasional Russian chess grandmaster, and each show turns our guest's wisdom into practical advice that you can use

to build a deeper understanding of how the world works and become a better critical thinker. Today, one of the 100 most influential people alive, according to Time magazine, he began investing at age 12 and now has over $160 billion under management at his company Bridgewater and Associates. It's no surprise he's known as the Steve Jobs of investing. Of course, we not only discuss investing in the macro economy, the current recession and COVID economy, but also radical transparency, decision making, mental models, and why he's partially responsible, love it or hate it, for bringing the chicken McNuggets into the world. I've got 10 pages of notes. I usually have less than half that for a 90-minute interview,

so pardon me if I start bouncing around a bit because there's so much value here. Lots to cover. So let's dive into this episode. today here with Ray Dalio. And by the way, if you're wondering how I managed to book all these great authors, thinkers, and celebrities every single week, it's because of my network. I'm teaching you how to build your network for free over at Jordan Harbinger.com slash course. And by the way, most of the guests on the show already subscribe to the course. So come join us. You'll be in smart company. Now, here's part one of two with Ray Dalio. There are so many places to begin with a Ray Diallo interview. So instead of just focusing on radical transparency, which we'll get to, I wanted to

dive into something first that you've written more recently about the changing world order, which sounds ominous and maybe is. I thought it was interesting that somebody who does investing that maybe some would consider short term was so interested in cycles that were longer than our lifetimes in some instances. Well, I learned a long time ago through a lot of different experiences that the things that surprised me most were things that hadn't happened to me in my lifetime before, but happened many times before that. Like in 1971, I was clerking on the floor of the New York Stock Exchange, and the currency was linked to gold. The United States couldn't pay its debts, and it basically defaulted on its obligation to pay for its gold. And I thought that's a

crisis. I went down on the floor of the New York Stock Exchange and expected, you know, terrible results. And I saw that the stock market was up a lot. And I realized that what happened that evening, when Richard Nixon, August 15th, 1971, when that evening, he did the exact same thing that Franklin Roosevelt did on March 5, 1933, which was to break the link with gold and to devalue. And I learned that if I didn't have an understanding of things, important things in the past, like how the Great Depression happened and so on, that I would be surprised. And so I needed to.

And I need to today. Surprise seems like the enemy of investing in many ways. You wrote 18 months ago I undertook, this is a couple months ago now. 18 months ago, I undertook a study of the rises and declines of empires, their reserve currencies, and their markets, prompted by my seeing a number of unusual developments that hadn't happened before in my lifetime, but that I knew had occurred numerous times in history. This was in March. Global pandemic has to be on that list now. I don't know if it was when you wrote the piece, but I think now it's very clear that this is an event that has happened before, but not during our

lifetime. Of course it is. And I didn't have that one on the list because the last one that happened was in 1918 and it happened right at the end of World War I. And so it's effects. I confused. I didn't see it. It didn't show up in the numbers because the economic impact that it had and the life impact it had sort of happened at the same time as the war impact and post-war impact. So I missed it. And it's so true, you know, it's happened repeatedly. So as a result, I've studied a whole bunch of them or tried to study as many as possible. But there are things like droughts and floods and acts of nature and so many different things that go beyond regular economics that have the biggest impact on our lives because they cost more lives than wars. And we're not even acquainted with any

of that. You know, today, how many pandemics, wars, depressions, revolutions, and so on, have we been through? And they happen over and over again for the same reasons. You said your biggest mistakes in your career came from missing big market moves that hadn't happened in your lifetime, but it happened many times before, just like we were discussing here. A lot of people are like this with the pandemic. The recession were undoubtedly in right now. I think a lot of folks are saying, well, I'm 58. This hasn't happened to me before. So it can't really be. happening right now. And this is not like a conscious thought. It's just the underlying. And we see it manifest when people are like, oh, this is all overblown. It's a hoax or it's not really that big of a

deal. And I think it's just like it's a cognitive bias. It's like denial. Like I've never seen this so it can't possibly be happening and it can't possibly be this bad. Well, I think we should say what are the things we're talking? What is it? There are three big things that are happening now, that haven't happened in our lifetimes before, but happened last time in the 1930 to 45 period. And they are, first, a long-term debt cycle that turns to the point where central banks can no longer ease monetary policy by using interest rates and so on. And so we're at the end of a long-term debt cycle in which there has to be a lot of printing of money. much like in March 1933. And that's a top. Number two, that there are wealth and opportunity gaps and values gaps, which are very large. So number one, where we are in the debt cycle, number two, that there are large gaps,

and those are the sort of things that produce some form of revolutionary changes. And number three, there's a rising power that is comparable to the existing world power that is challenging it, like in the 30s and in the United States now with China. And so I think when we look at the world, we have three big topics that we need to talk about. There are more. There is technology and there is climate change and so on. But let's start with those three. Those three have not happened in our lifetime.

and they're very big and important to understand. Yeah, this is, a lot of us don't have a blueprint for this in our experience, so we maybe try to sweep it under the rug or ignore it, but debt, low interest rates, super high unemployment, the wealth gap. I mean, these are all things you've mentioned. And we can dissect some of those later on as well. We could spend the whole show talking about that, so I want to be careful that we don't,

because your piece, which will link in the show notes on LinkedIn, does a really good job of that. You said, I believe the reason people typically miss the big moments of evolution coming at them in life is that we each experience only tiny pieces of what's happening. We are like ants preoccupied with our jobs of carrying crumbs in our minuscule lifetimes instead of having a broader perspective of the big picture patterns and cycles and the important interrelated things driving them where we are in the cycles, etc. So humans are repeating this pattern in history,

and you said the only thing that changes are the clothes the characters are wearing and the technologies they're using. I'm paraphrasing here, of course. that's a little scary somehow. I think scary means not understanding what is true and how to deal with it. So the question is, is that true? What I'm saying is when you look at the personalities through history, the personalities don't change. The basic dynamics doesn't change.

A debt cycle doesn't change. Conflicts don't change. Empires rise and decline. All of these things change. Wars happen. I mean, it would be naive. Being naive is scary. Okay?

So I think the question is, is this true? And then how do you best deal with it? That makes it less scary. So you've said this is a stress test? I mean, is this something that I think a lot of people want to know, is it inevitable that we're going to run into these problems and not handle them well? Or is it, hey, look, we have enough advance notice. We can work our way around this.

Or do you just see the decline of the United States in the future? Sort of the truth lies in between that. So by being aware of what is health, what is strength, what is the nature of what's happening so that you can be aware of the choice of being stronger and dealing with these things well is a power, is a great asset. So that's why I'm passing this along, people are assessing. At the same time, you don't begin from scratch. There's a cycle. And so, for example, the amount of debt that we have, we have, the amount of savings we have, we have. So if you were to take a location, let's say a state, I'll give that as an example. You can take the state of Connecticut. You could take a state.

And you could say, well, it's not like you're beginning with the fresh slate. You do carry liabilities and you have circumstances. And that's going to necessitate a heavier lift because you have to produce productivity. Like it's a timeless and universal truth that what you get to consume and the quality of your living standards is a function of your productivity. And so you have to be able to mechanistically make the pie grow through productivity. And you have to be able to mechanistically, and you have to be able to divide the pie well so that people believe, and it is a reality, that there's something approaching equal opportunity that's good for the majority of people. Those are realities.

And then you're faced with your existing circumstances, and then how do we work together to achieve those things, or will we be at odds with each other and simply fight to our detriment? Are you optimistic about us getting through this intact? Like if you had to assign a percentage to it, are you able to do that? Let me define what is it and how long does it take, okay? Inevitably, we will get through this, meaning if you look at the cycles and you look at periods, difficult periods, that most difficult period in the 1930 to 45 period, it led to all sorts of difficult stuff, bad stuff and wars and all that. But you got, you ended it, you got past it.

There's a new power and things resolved themselves, and you enter a new period. And so the capacity of humans to adapt and change and do things in certain ways is enormous. But the likelihood of being able to work in an intelligent, cooperative way to do the right things in the system that we have under the circumstances. that we have would have to be considered a long shot. That's, yeah, that's a little unnerving. I mean, do you feel that way, or is it just this is the way that it is? And we have to just accept it and move on and not have a feeling about it.

I think we now deal with psychology. And the human species basically has the two parts to their brain. They have their logical part, and then there's the emotional part. and you don't want to let the emotional part stand in the way of the logical part in order to make the best decisions possible. You know, I'm an emotional person, but I have to deal every day in markets and make different decisions. And if I let that emotional hijacking take place, I would be in a bind. So when I look at such things, I gain more comfort and confidence of thinking about, well, what is true and reality works the way reality works. It doesn't work the way we wish it would work.

So we have to understand that. And when you start to understand how reality works, there's also a beauty to it. It's a perpetual motion machine. So for me, I'm very uncomfortable if I'm not doing that. You're listening to the Jordan Harbinger show with our guest, Ray Dalio. We'll be right back. And now back to Ray Dalio on the Jordan Harbinger show. I would love to hear what your take is on China, because we're talking a little bit about debt. China's drowning in it,

and you've been going to China since the 80s, right? 1984, 35 years, yeah. That's incredible. I mean, you probably know more about that than most people. I've been there more times than I can imagine. And yes, so I would hope so, yeah. Yeah, yeah. What was China like in the 80s?

I mean, I know you set up like the first, would you call it private equity organization in China? When I first went to China in 1984, it was just opening up. Mao died in 76, 1978, Deng Xiaoping came, and they had an open-door policy and so on. I was invited by a company by the name of Siddick, which was the only company that was allowed to deal with the outside world. It was called a window company. and they wanted to learn about the financial markets. And what it was like was it was very, you know, everything was one or two stories, very poor.

I would bring $10 calculators as gifts to high-ranking people. And they thought they were miracle devices. And it was very ignorant of what the outside world was like. And it was very backward. On the other hand, the people were very intelligent and very civilized Along the way, I sent my son when he was 11 there to go to school in an all Chinese school. And I saw what they were like, the eagerness to learn. They were very cultivated, civilized people who had been isolated from the rest of the world for a long time

and were very ignorant of the things they needed to do in order to raise their living standards. Going to school in China must have been an incredible experience. Do you recommend people seek out these extremely unique experiences? I mean, you could have sent your kid to France to go to school, but you knew China was something special. You know, each has their own belief of these things. I believe that when you can see things from a very different perspective, it broadens your ability to see things from different perspectives

and to weigh things. And I think it's exciting. That's my own preference. And so I thought it will stretch my son. it'll stretch his thinking. It'll be a great growing experience. And in his lifetime, China will be quite something. The whole journey from that day until today has been a remarkable journey. And so, of course, I wanted to send him there. But, you know, I had conversations with my wife who said, are you kidding? We're going to send our 11-year-old to China. To be clear, he lived with a woman and her

husband that we knew for many years before that. And she was wonderful. And he knew her. But it was a poor situation because everybody was poor then. So he could only take hot showers twice a week because they only had hot water twice a week. And he had to go to a school that was very poor, but very inclined to want to learn and value their kids. So the environment was a healthy environment. But yes, I knew it would stretch as mine, and I thought that was good. I agree. I mean, I've done a lot of studying and traveling abroad, and I went to North Korea on a vacation four times and ran a company that worked there, and people thought I was crazy. But I agree with you, like having that outside perspective that nobody else has gives you an angle that nobody else has.

Yeah, and it's also so damn flavorful, so interesting and flavorful, right? It's almost like being a character in an Indiana Jones movie. You know, it's, ooh, it's real. And it gives you the perspective. So anyway, it depends what your days are like. I heard you help bring the chicken McNugget onto the market. So I'd love to hear that story. On behalf of the Western world, thanks for that.

I mean, I think we all love a chicken McNugget. How did that happen? Well, I formed Bridgewater then. It was a rinky-dink little company. I was advising on commodities because commodities was my thing. So the largest chicken producer in the United States was a client of mine. And so was McDonald's. And the problem that they had at that time to make a chicken McNugget is if the cost of chickens varied a lot.

If they put it on the market and chicken prices rose a lot, then they'd have to raise their menu prices and they didn't want to do it. I mean, it would be a big deal. So what I did is I knew I had sort of enough of a unique understanding of pricing, markets, and the mechanics of growing chicken to know that we could lock in the grain price and go to this large chicken producer. And they could cover themselves against their cost, make a fixed price contract, and that McDonald's could have a fixed price on the menu and that they could do the chicken McNugner. So that's how that happened. So basically it smoothed out the cost of chicken.

And the moral of the story is they're actually made out of chicken, which I think is a relief to a few people listening to this. Yeah, actually my contact with McDonald's, which has since ended, but all through that, they wanted to use fresh beef. They would always use quality. I'm not involved for decades. But back then, that's what they were. approach. Good, good, good hedge. You mentioned the happiest people discover their own nature and match their lifestyle to it. That's a whole topic in itself, but I wonder how do you suggest we start this process? Well, I mean, I think first is to recognize that different people have different natures, different deeply seated preferences that will become manifest in what brings them

angst and what brings them pleasure. And then I would say, then personality, profile tests and so on, is a process by which there's scientific processes that will test your preferences for what do you like in your way of thinking and so on. I've used these. I've run my company for 40 some odd years. I don't run it anymore, but I've used those and have learned a great deal about the people, and they've learned a great deal about themselves. So I'm in the process of combining those tests and making a new test, which I'm going to make available for everybody free. But I would start there and recognize those differences. And then through a process of the interactions, you'll feel your pulse and what repulses you. And then you will also

think about it. In other words, go above yourself. Don't just be in the emotions. But think about the emotions that you're feeling and so on, and maybe have the input of others. Work yourself through differences. I think there's an emotional reaction to disagreeing. Yes. That's so stupid. Okay. If one could calm oneself down and understand the art of thoughtful disagreement, the capacity to see how others see things, and to then understand those different. is, it's enlightening because once you understand yourself and you understand what others like, it defines your path and also your relationships with others. I think you called that in the book, Reluctance. Don't mistake disagreement for conflict

and thus avoid disagreement. I think a lot of us do this. I now lean into conflict, perhaps a bit too much if you ask some of those who work with me every day, but I certainly know that I used to do this. It would be like, I should say something, but I don't want to be. I don't them to get mad at me, so I'll just sweep this problem under the rug for three years or whatever. Not a good strategy. Not a good strategy because obviously you don't understand each other. Obviously, you're not dealing with the issue. If instead you sort of go above you and the other person and you say, what do you want me to do? Like, I've got some thoughts, you know, that should I be honest with the thoughts? Can we honestly and thoughtfully exchange those thoughts?

Or do you want me to hold on to those thoughts which might be right or wrong? And they're critical thoughts. I mean, I'm sure you have some critical thoughts about me or what we're doing together. But can we talk about it or can we not talk about it? I think whenever I'm in a conflict with somebody or any two people are in a conflict, they would be wise to pause. the conflict, and then go above it and say, okay, what are our ground rules for interacting? How should we interact? What do we want to achieve? Do you want to be ignorant or do you want to move forward with a discussion? And then once those ground rules are established, then you go back into the conversation and move forward. Because being ignorant and particularly being critically

ignorant, I do find unethical. Because if I have a critical view about you or something, and I haven't discussed it with you, it's like trying a person in your brain. Everyone has the right to face their accuser, so to speak, and to work things through. And when you do that, when curiosity is your main motivator, it will enlighten you. You will learn so much more and you will deal with the realities that exist. You said to succeed in the market, one needs to be an independent thinker and bet against the consensus,

which involves being wrong a lot. So if we're sort of attached to being right and we can't hear about being wrong, it seems like a really good strategy to lose a ton of money investing if you can't handle it. Yes, that's right. And it's a good strategy

for having a much worse life than you can have regardless of your profession. I mean, you have a choice. You can follow, and obey, or you can follow this other path, which means thinking for yourself while being radically open-minded, so you're not blind to things. I recommend the second path. I found it interesting that you say making money is a bad goal. You should find out your real goals and then go backwards from there. How do we start that process?

Because I think a lot of people who don't have financial security, they're like, what do you talk about making money is a bad goal? It's the only one that makes a difference for me right now. Well, that's what I'm trying to convey. So let me clarify what I mean by that. Money has no – it has a purpose. You want to have security for you and your family. You want to have choices.

So it's a very important thing. But look at the things themselves, okay? there are people who get hung up on making money, and they almost lose sight of the things themselves. And that's a tragedy. So you have to have the best life possible. That's the main thing. If you have the best life possible, and it's some clarity as to what that is, and you're using money to help get there, that's terrific. Great.

But don't make money itself the goal. I think that's wise counsel from you're in a unique place to say that having probably ostensibly been on both sides, right? You know, having not as much and then having a lot and knowing what's valuable. I've been so lucky. In 1982, I was so broke I had to borrow $4,000 from my dad to help pay for family bills. And so I was very lucky. I was raised as a, my dad was a jazz.

musician, as you say. And then I had my game, my adventure. And it just happened to be, the game I love, happened to be a game that made money. I didn't go into it for money. I was too naive to even think about money at the time. But then I acquired it. So I had the experience in the right order. I had the full range of experiences. And it's a better order to go from up rather than to down. But I felt that those experience along the way. And I'm 71 years old. And I look back. and I think about what matters most, okay? I would say, like I said in the book, meaningful work and meaningful relationships

have, for me, been the most important things. And I do want the security for my family and I want to be able to have freedom. And then on the increment, when you start to get more money than that, then the questions are, what do you choose? And I choose other things, but I'm not working for money.

This is the Jordan Harbinger show with our guest, Ray Dalio. We'll be right back. After the show, we've got a preview trailer of our interview with Navy SEAL and veteran Jacco Willink like you've never heard him before. So stay tuned for that after the close of the show. Thanks for listening and supporting the show. Your support of our advertisers is what keeps us going. To learn more and get links to all the discounts you just heard so you can check them out

for yourself, visit Jordan Harbinger.com slash deals. We've also got worksheets for these episodes. The links to those are in the show notes at Jordan Harbinger.com slash podcast. And now for the conclusion of part one here with Ray Dalio. Besides happiness, what things do most people think are connected to wealth, but in your experience are really not connected to wealth? I think people think that wealthy people and successful people think they're wealthy and successful, and they generally don't.

I'll start by explaining that one. But there are a few more. Successful people, there's always more to learn. There's always more better to be. They're not the type of people, generally speaking. And I'm speaking from experience of being able to speak to the most successful people in the world. They're by and large, curious and excited about making magic happen. They're excited about visualizing things and making them happen and they're very curious and they are worried about being wrong which helps them minimize them being wrong by being able to triangulate with other people, which is also why we speak to each other. So they are not sitting there thinking, wow, today and throughout history,

there are many more successful people and you admire them so that they don't feel that way. And in terms of feeling rich, when there's so much you want to do, for example, you've become philanthropic. In other words, you get to the point where the marginal benefit of protecting you and your family, you're past that. And then you've got more. And you don't want decadence. It's harmful and so on. So you want to move beyond that. You can empathize with others.

You can relate to that. And so you want to do things philanthropically. You see some of those needs and so on. And you realize how inadequate your resources are relative to the desires to have those impacts. I mean, for example, we're in the state of Connecticut. I'll just give it a quick example, which has, my wife is particularly caring of what are called disengaged and disconnected high school students. A disengaged student is someone who has an absentee rate of greater than 25% and in failing classes. And so school is failing for them. They may not get through high school. And disconnected is someone that they don't even know where they are. They're gone out through the system. And we have a situation here today that they can't,

those students in high school can't be educated because they don't have computers and they don't have connectivity and the state has inadequate money to provide those things. Okay, well, in our case, we went out, we bought 60,000 computers and we're trying to get them connectivity and we're working with others in order to do that, but that costs a lot of money. Yeah, that's a lot of computers. And so when we think that cost us a little over $20 million. And when we think about that and we think about the need. I'm not trying to, I'm just trying to say, if you ask Bill Gates, does he have enough money relative to the needs? He would feel he doesn't have enough money. He's got more than enough money for himself. But the question is how to do those things well. So I think those are the two most

obvious things. They don't feel uniquely successful like people imagine. They don't feel uniquely rich like they imagine. So it sounds like your goals outpace, your resources to accomplish those goals and if you get more resources seemingly the most of anyone, you still have goals that are bigger than the amount of resources you have. Right. And I think that starts from day one. Yeah. For certain people, I mean, I'm not saying even that's the right path, by the way. There's an alternative path, which is there's two extremes. Accomplish and have impacts that's beneficial on the world or saver life. Neither path is. better. I can't say what path is better. Saver life means just each day. Smell the roses.

Don't be so focused on doing the other, the accomplishing, the learning. Don't be hungry. You know, it's almost Buddhism. And I can't say which is better. I enjoy both. I try to get as much of both in as possible. So, yeah, you face these types of choices. Well, much like Buddhism, I think the balance is there, right? I mean, Buddhism also has elements of focusing on your, well, I'm going to butcher this, but focusing on yourself and focusing on what's going on in your own life. And, of course, helping others is a core tenet of any religion or any practice. Well, what I was speaking about is the absence of needs.

Yeah, that's a train we could go down for hours with that. That may be part of your next giant LinkedIn piece or your next book, depending on what you're working on right now. Are you writing any more books? Are you planning on doubling down on principles or anything like that? Well, this series that I'm putting out now is I'm writing this book on the changing world order because I think it's important for me to pass that along and it's research I'm doing from myself. But now at 71, I'll be 71 in August. I'm passing things along that I think are important. So that's sort of a book. It's a research piece that is being converted into a book, but people can see it on LinkedIn. And then I have to pass along the economic and investment

principles, because that's an area that I had, I suppose, enough of a unique understanding that I'd like to pass along. And then I'll be done. I suspect I'll be done and go quiet in about two years. Really? Wow. Well, good thing we got you when we did, I guess. Thanks for doing that. The whole book Principles has been, you've talked about it a lot. People should read it. We'll link to it in the show notes along with the Changing World Order, LinkedIn post, will be in there as well. You can also, if you want, there's an app called Principles in Action.

Right now it's on the Apple iOS store for free. That has also the book in it, and it also shows some of these principles in action. So you can get that for free or you can buy the book or do whatever you want. I recommend people definitely check out the app, but also don't think, oh, I've got the app so I don't need to read the book. Obviously, a deeper explanation is going to be suitable. Well, I'm saying the book is in the app. Oh, the whole book is in the app as well. I don't know that.

Yeah, if you want that, and it's on your iPhone, it's handy. But anyway, either way, you know, there are different ways of getting it. I just wanted to touch on that because I'm going to move along past the principles pretty quickly, and I don't want people to think I left the best part out or that I'm leaving them in the dust here. The principles are, what would you call these, systems, rubrics for making decisions based on inputs, or is that too basic? Well, that's good. I would say recipes. In other words, we encounter things and everything has happened before many times. And so through those encounters, there's sort of our recipes for success. When you're in this situation, what should you do? you can go get them from others, you can come up with them yourself. What I did in my early days of

running Bridgewater is reflect on what I was doing and I also took videos of it and had everybody take videos of themselves doing whatever the thing. But most importantly, I reflected on why I would do what principles I would use for certain circumstances. I wrote them down and I share them with the people I worked with and shared my life with. And then I said, would you handle it the same way? Would you use the same principle? So we went from individual cases of things happening in decisions to reflecting on what recipes would you use for certain circumstances. And so I would say they're recipes for different circumstances. Everybody has principles, every successful person, if you were to say, how did Steve Jobs do things?

He's got the actions he took in certain circumstances, or he'd take anybody, a Nobel Prize winner or something, and you want those principles. So I wrote down mine. I think it's important that people have their own, and I think it would be good for people to exchange principles and say, so I'm pulling them out also of other accomplished people, and we're going to have on that principles in action, we're going to have the possibility that people can search for the most appreciated principles for the circumstances they face going to,

or they could say what are Bill Gates's principles or XYZ principles, and then you could do that. And it also makes it easy for people in that app to write down their own principles and then have easy access with them. So that's what principles are, recipe for success of how you'd handle certain circumstances. So we classify situations into a type so we know how to handle it and we aren't reacting every time we see these like we're seeing it for the first time. Exactly. It's like, what species is it? Okay, what species of thing is it? Okay, now that I've identified that species, how do I best handle that species to get the best results? That's the conclusion here of part one with Ray Dahlia.

We're going to have part two in just a couple of days. Thanks to him for coming on. If you buy the books, use the website links, worksheets, and transcripts also in the show notes. There's a video of this interview on our YouTube channel at Jordan Harbinger.com slash YouTube. I'm at Jordan Harbinger on Twitter and Instagram or hit me on LinkedIn. Dig the well before you get Thursday. Check out six-minute networking.

It's our free course on networking. Go over to Jordan Harbinger.com slash course. credit card free, but actually free. Most of the guests on the show, they subscribe to the course and the newsletter, or they've contributed to the course in the newsletter. Come join us. You'll be in smart company. This show is created in association with Podcast One and my amazing team, including

Jen Harbinger, Jay Sanderson, Robert Fogart, Ian Baird, Millio, and Gabriel Mizrahi. Remember, we rise by lifting others. The fee for this show is that you share it with friends when you find something useful or interesting. If you know somebody who loves Ray Dalio or any of the topics we're talking about today, including the economy and investing, please do share this episode with them. Hopefully you find something great in every episode of this show. So please do share the show with those you care about.

In the meantime, do your best to apply what you hear on the show so you can live what you listen. And we'll see you in a couple days for part two with Ray Dalio. As promised, here's a preview of our interview trailer with Jocko Willick. Leadership is the most important on the battlefield. Every characteristic that you can have for leader can be taken to an extreme. Even the most important characteristic

that I talk about all the time, which is humility. You've got to be humble as a leader. You've got to always look, okay, how can I improve? I need to listen to other people. Well, as a leader, you can actually be too humble

where you don't stand up when somebody's telling you to do something that you don't think is right, but you're like, hey, I'm humble, so I'm going to do it anyways. Well, if you don't think it's right, you actually shouldn't do it. Every positive characteristic

can be taken to the extreme that it becomes a negative. And that is why, as a leader, you have to be balanced. Be humble or get humbled is a term that I love. Can you tell us what this means? The nature of the world is if you're not humble, you are going to get humbled. So that's a good attitude to have.

And it's a good attitude to always think, you know, I need to stay humble. But this is the dichotomy. This doesn't mean that you're completely passive. And there are times, as humble as you should be, there are times when you need to stand up and say no. You know, Laif and I joke about it, sometimes the most we'd get to sleep was when we were in the field. There's a funny picture of myself and Dave Burke on a rooftop.

It's probably looks like it's about 11 o'clock in the morning, and we're both sitting there. We're both asleep. 110 degrees. It's 110 degrees, and we're both asleep. And clearly, this was the first time we had to rest in 24 or 48 hours. And you learn to sleep anywhere on concrete and floors and stairwells and whatever else. For more with Jocko, including why we should stop being the easy button for those we manage and lead,

and the concept of leadership capital, how to build it, when to use it, and when not to use it. Check out episode 93, right here on the Jordan Harbinger Show. This episode is sponsored in part by Something You Should Know podcast. Finding a new great podcast shouldn't be this hard, so let me save you some time. If you like the Jordan Harbinger Show, you'll probably like Something You Should Know with Mike Carruthers. It's one of those shows that makes you smarter in a practical, useful way. Same curiosity vibe we go for here, just in a fast-focused format. Mike brings on top experts and asks the exact questions that you'd want to ask,

and the topics are all over the place in the best way. Recently, they've covered things like why we care so much what other people think, the benefits of laughter, why sports fans get so invested, and what makes people like you or not. The through line is always the same. Smart ideas you can actually use in real life. Something you should know has been featured in Apple's shows we love, and it's got thousands of five-star reviews because it's consistently interesting.

So if you want another show that scratches that I want to understand how people in the world really work, itch, search for something you should know wherever you get your podcasts. Look for the bright yellow light bulb and start listening. You can thank me later.