The Prof G Pod with Scott Galloway - Economic Cycles, Investing in Education, and Working Through Grief — with Ray Dalio

Episode Date: March 10, 2022

Ray Dalio, founder and co-chief investment officer of Bridgewater Associates, joins Scott to discuss his latest book, “Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail.” Ray also shares his thoughts on where political leaders should focus their attention, as well as how he has dealt with profound loss.  Scott opens with his thoughts on how universities need to drastically change the way they expand enrollment seats.  Algebra of Happiness: embrace your feelings. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. Episode 144. George Lucas was born in 1944. My sonke loves that i named him after a star wars character my daughter chewbacca not so much go go go welcome to the 144th episode of The Prop G-Pod. In today's episode, we speak with Ray Dalio, the founder and co-chief investment officer of Bridgewater Associates. As you know, Ray is one of the original gangsters in the investment or alternative investment space. He's been a global macroeconomic investor for more than 50 years.

He's on the pod today to discuss his latest book, Principles for Dealing with the Changing World Order, Why Nations Succeed and Fail, which takes us through how the world experiences big cycles around economics, internal conflict, and external conflict. We also hear his thoughts on education. And I've been following Ray's work for a while. I appreciate that he's putting himself out there. I think it's tempting to just be very rich and anonymous, and he's tried to get involved in public policy. He's very philanthropic around Connecticut schools. The thing here that we just did in the interview that really kind of shook everybody was him talking about personal loss and specifically the loss of his son. But I came away from this with a lot of, I don't know, affection and or respect for Ray. Anyways, okay, what's

happening? The University of California, Berkeley has been making a lot of headlines for the past several weeks in regards to enrollment seats, the Supreme Court, and some very angry Berkeley residents. So let's rewind. There's been some ongoing litigation between Cal, UC Berkeley, and California. The Bears, go Bears. They're most distinguished, or at least in the top million, distinguished alum, yours truly, the hospital of business. But Cal wants to expand enrollment by a few thousand seats. Makes sense, as they should.

And the residents behind the organization Save Berkeley's Neighborhoods, on the other hand, do not want the university to increase its student body in the town of Berkeley. The Save Berkeley's Neighborhoods sued the university a few years ago, stating that increasing the number of students at the school violated the California Environmental Quality Act, also known as CEQA. Cuica? Kica? Anyways, hopefully it'll fail as it has a shitty acronym. Anyway, CEQA essentially means that public agencies need to prove that new developments in the state won't cause significant harm to the environment. The complaints coming from, say, Berkeley's neighborhoods largely claim that the university has done nothing to plan for its growing student body, which is, in my view,

just Latin for these folks don't want loud college students crowding their streets, or they have very nice expensive homes, and they would rather the university not infringe on their quality of life, which, by the way, a big part of the quality of their life, as is evidenced by the fact that university towns almost always turn into really nice towns where the people who buy homes enjoy greater appreciation on those assets than other real estate, i.e. the university. By the way, nobody, nobody moved into a house at Berkeley before it was a college town. You kind of knew what you were getting into. I remember these graduate students, when I lived in a fraternity in college, would consistently come over and ask us to turn the music down. I'd be like, boss, did you have a hint when you moved into this big building with Greek letters on the front that it might be kind of loud around here?

I mean, what was your first hint that we might not be great neighbors? neighbors. Anyway, despite how ridiculous this all sounds, just this past week, the courts upheld their decision that the university did in fact violate CEQA when it increased enrollment by 34% between 2005 and 2020. By the way, increasing enrollment 34% over 15 years, I think is increasing enrollment about 2% a year. It's not as if Berkeley's saying, oh, we need to dramatically increase our roles. So essentially, UC Berkeley must cap its enrollment at 2021 levels, which is around 42,000 seats. In response to this ruling, which took administrators and university leadership, kind of caught them flat-footed, the university initially said it would need to eliminate or check back on additional freshman seats. It has since backtracked on that statement. So there's some confusion here. So instead, it's requiring roughly 1,100 undergrad students to attend the fall

22 semesters entirely online with the option to attend in person during the spring 23 semester. Another 650 or so undergrads will begin their school year in the spring instead of the fall. So, what's our view on this? For starters, I believe that this fight between older neighborhood residents and the university is another example of what happens or has been happening across America for the last 30 years. And that's everything we do, everything we do is simply trying to affect one major transfer. and that is the transfer of wealth from the young, who in this case are students getting a fantastic on-ramp to a better life, to the old, who are homeowners, who want to limit supply and are only focused on their needs. We have

a terrible complexion in our economy, mostly fueled by the baby boomers who have weaponized government to embrace a scarcity economy. Fewer degrees. My degree will become worth more if we limit the number of degrees. My stock will be worth more if we limit the amount of competition for Google and Amazon. And if we limit the amount of housing, while it may get more expensive for a first-time homebuyer, while it may raise costs across the board for everybody, my house will become worth more. We have embraced this bullshit luxury rejectionist culture and the scarcity culture that is attacking the prosperity of people who don't already have assets. Growth, change, and churn benefit the young, while ossification, pulling up the bridge behind us and enforcing scarcity benefits the old and the already

wealthy. Where did we see this to the tune of $7 trillion? The COVID-19 relief packages. What did we do? We ensured that people who are already rich stayed rich. Well, guess what? Unless you let the gale forces of change howl, you never give opportunity to young people. The reason I'm here in Financially Secure was because we let stocks crash in 2009, and I got to buy Amazon and Apple at about one-twentieth of the price they are now. But we didn't want to let that happen, right? We didn't want really rich people to just get rich or just decline to rich and then give young people opportunity. We wanted to make sure that the existing wealthy who have weaponized government, who give the majority of money, who have the majority of assets, who everyone is pulling out all stops and rubbing the back of specifically an older white voter in Iowa or Maine that kind of dictate who's

going to be our next president. So everybody starts talking about what we can do to maintain the wealth and prosperity of older people. When you bail out a restaurant owned by a baby boomer, all you're doing is taking opportunity from the younger graduate of the Brooklyn Culinary Academy who would like to buy their own restaurants in the midst of a downturn from that baby boomer who, granted, is struggling, but that's the point of capitalism. That's the point. There needs to be churn. There needs to be opportunity. And what happens when there's not opportunity? Younger people get angry. They create their own asset classes. They create their own volatility. And we have a breakdown in the central compact in our society, and that is that we will afford young people the same opportunities or more than we had.

For the first time in our nation's history, a 30-year-old man or woman is not doing as well as his or her parents were at the age of 30. Why? Because we've implemented a scarcity mindset that directly transfers wealth from the young to the old. And this is another example of that. Sure, you'd like your leafy cedar ranch style house in the Berkeley Hills to be one of a kind

and you don't want noise and you don't want more traffic. Good for fucking you. Guess what? You're in the Berkeley Hills, Berkeley. And we absolutely need more graduates. If we had this incredible pharmaceutical that reduced the likelihood you would have high blood pressure, increased your lifespan, doubled your income,

made you more likely to get married and less likely to get divorced, wouldn't we want to give that drug to more people? We have that drug. It's called the University of California. We have eminent domain where we decide that this train, this infrastructure, this bridge, this dam would be so beneficial to the commonwealth that we are going to show up, bang on doors and say, hey, guess what? Your house is worth $100,000. The government now owns your house. We'll pay you a fair price for it.

But you're getting the hell out of Dodge because we think that the cost to you are much less than the overall benefit to society. but you're getting the hell out of Dodge because we think that the cost to you are much less than the overall benefit to society. There has never been an example of where eminent domain would be more justified than our great public universities. How do we level up a younger generation? More vocational schools, greater investment in K through 12, opportunities, especially for younger men who are failing, but also investing in these incredible assets called our great public universities. We have the best in the world.

America is great at a number of things. We're great at making weapons. We make great software. We make great movies with men in tights and capes. We're also fantastic at elite universities. Some of our best elite universities are a function of the government. Now, to be fair, universities, their leadership need to be more creative about coming up with new ways to scale the university.

I spoke to the president of Wesleyan today, incredibly impressive guy, a guy named Michael Roth, wants to do the right thing, wants to expand his university, wants to lower costs. But we need to think out of the box. Why do we always cram everything through the traditional four-year bachelor's degree? Why wouldn't we have two-year vocational programs? What if MIT offered a 19-month specialty in cybersecurity? 60 grand. And by the way, transfer the costs onto the corporation.

You don't think corporations would pay that for first dibs on that person? Why wouldn't we have a GI program? Why wouldn't we transfer the cost of education to corporations? Student debt at an all-time high, corporate profits at an all-time high. Seems like we should be transferring the cost of education from students to corporations, especially low-income and middle-income students. We need to be more thoughtful about how we leverage these assets. There's 20 weeks a year where no one's on campus, specifically the summer and

during the breaks. Do what Dartmouth is doing. Start the semester, stagger the semesters, and ask students to show up during the summer. Think about remote. Think about digital. I'm not talking about all or nothing. Everybody calls me and says, how do we take, how do we offer a BA digitally or remotely? No, that's not the question. The question is, how do you increase your student population by 30 to 50% by taking a third or half of your classes or lectures online? Students scale the social and the leadership really well on their own off campus. The bullshit notion, the primary objections that schools put up when they say they don't want to expand their student body or have even their freshman seats expand at nearly the rate of their endowment, much less population, is it would be bad for our brand. Well, guess what?

When UCLA was letting in the children of single immigrant mothers who lived and died secretaries and acceptance rate was 76%, it wasn't exactly a Joey Bag of Donuts brand. It was good enough to get me into Morgan Stanley and a graduate school at Berkeley. So this notion that somehow

they're gonna lose their brand equity if they don't reject 90% of the applicants, again, is see above bullshit. And two, they talk about that they're going to lose their brand equity if they don't reject 90% of the applicants. Again, a C above bullshit. And two, they talk about that they're space constrained. Well, get more thoughtful about how you utilize space and also maybe think about opening satellite campuses in areas where there are less space constraints. You want to do something for America, Stanford?

You want to invest in the Commonwealth, MIT? Open campuses in Mississippi. Think about the change you could bring about for today's youth and tomorrow's America if you opened a tech campus in the Deep South. You would get faculty there. You'd get huge donations. I think governments would rally behind you. But no, we want to hang out near the water and think big thoughts and pretend that we're all fucking woke as we become the cultural elite, create resentment in our society, which will always be self-corrected by one of three mechanisms, war, famine, or revolution. Well, guess what? We have the famine, we have pestilence,

we have different forms of mini revolution, and it looks like we might be on the precipice of war. Well done. Well done. I am really on my soapbox right now. Higher ed has morphed from being the greatest upward lubricant of unremarkable kids to being an enforcer of the caste system. And it's all at the hands, again, of this reductive, short-sighted, bullshit rejections culture. America's not a fucking Chanel bag. America's about opportunity. Let's start thinking about how we take some of the incredible riches that we, my generation,

have been afforded and sprinkle a little of it back in the form of opportunity and much broader, much broader opportunities to great higher education. Schools need to expand their offerings. They need to expand their seats. And these bullshit local community boards, by the way, the head of this housing board association spends half his year in New Zealand. Well, boss, a few of those kids would like to someday be able to afford their post-apocalypse compound in New Zealand as well. We need to absolutely enforce some sort of eminent domain as it comes to our great public institutions. There are so many things that need to be done, but the most obvious one, the most obvious one is a massive investment, massive embrace of our great public institutions.

Stay with us. We'll be right back for our conversation with Ray Dalio. The Capital Ideas Podcast now features a series hosted by Capital Group CEO, Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, what learnings have shifted their career trajectories, and how do they find their next great idea? Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Hey, it's Scott Galloway, and on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions.

What should you use it for? What tools are right for you? And what privacy issues should you ultimately watch out for? And to help us out, we are joined by Kylie Robeson, the senior AI reporter for The Verge, to give you a primer on how to integrate AI into your life. So tune into AI Basics, How and When to Use AI, a special series from Pivot sponsored by AWS, wherever you get your podcasts. Welcome back. Here's our conversation with Ray Dalio, the founder and co-chief investment officer of Bridgewater Associates.

Ray, where does this podcast find you? I'm in my house in Greenwich, Connecticut. Greenwich. All right, well, let's bust right into it. So in your book, Principles for Dealing with the Changing World Order, you argue that we can prepare for the future by studying the past. And you talk about the world experiences these big cycles. Where are we in one of these cycles, if you will? And you also talk about three major underpinnings. Can you outline those three for us? Yeah. Studying history. What I learned was that many of the times that I was surprised by events, it's because they didn't happen in my lifetime, but they happened many times before that. And so that I needed to study history in order to deal with what's going on. And there were three things that are going on now that didn't happen in any of our lifetimes, but happened many times before that I needed to study. And those were the amount of debt creation

and debt monetization. In other words, the printing of money by central banks to buy that debt. The second is the amount of internal conflict, particularly by populists of the left and populists of the right. That amount of conflict, together with the size of the wealth gaps, size of the opportunity gaps measured by statistics, you'd have to go back to between 1900 and the 1930s to see

that. And the third is the rise of a great power to challenging an existing great power, particularly now, of course, there's China rising to be a comparable power as the United States, and to challenge the existing world order. And so these three things together happening together never happened in my lifetime before and also individually. So I needed to see cycles. And particularly, I wondered, you know, what caused the rises and declines of reserve currencies and then the empire. So I needed to go back 500 years. That sounds like a long time. It's not really. The cycles go on for something like 125 years kind of thing. And so that's what led me to look at those three things, which I think are three of the

five biggest things that are now happening that will change the world order in ways that will have effects on us all. So what cycle is this cycle rhyming most like? If we were to try and look for a benchmark period in American history or other economic history, what would be the right analogy? Well, actually, it's interesting. It's the same pattern as almost all of them. And I also studied the dynasties in China since the Tang dynasty,

which was 600. And there's a cycle. And the way that the cycle works is it's a battle over wealth and power. The United States, there are different kinds of power, military power, economic power, power of one's reserve currency, all of those things. And they're measured there. I put those power to create a power index. United States is still marginally the most powerful country. China has become, in many ways, very close to that and has increased its power at a faster pace and is increasing its power at a faster pace and is increasing its power at a faster pace. And so if we look where even we are in that cycle, there's a competition that we could see that could be a war. If we look at where we are in the financial cycle, we're late in that financial cycle, a lot of debt. And traditionally,

the coffers are bare. And so when the government doesn't have enough money, it prints money. Or in the case of when there were gold coins, they put less gold in the coins and they try to print it. And then that brings about the inflation. Usually you have the inflation problems or the financial cycle before you have the big war cycle. And then, of course, there's the internal conflict and the internal conflicts mostly about wealth and values, wealth differences and values differences. And so that's a particular side. So we're late in the cycle. And I don't mean to say that the cycle is predestined, but you can look at measures of health, such as are you

financially healthy? Are you working well together in a harmonious and productive way? And are you internationally comparable or strong power? You say we're late in the cycle. What resets the cycle? War or failure, a crash in the currency or a resetting of geopolitical power? What resets the cycle if we're late in it? Well, traditionally, these three things line up. So you don't have enough real money, hard money, and you have a lot of debt. So you print money, but you have the financial when you have the financial problems at the same time as you have the internal conflict you either have a civil war or you have an external war traditionally the civil wars um come from the economic like like the Great Depression causes around the world, the Great Depression,

debt crisis, ended up printing money. And it then leads to around the world, populism of the left and the right. So that was communism and fascism. And that led to, and then because of the internal conflict over those things, you then have the internal war. So four democracies in the 30s chose to be autocracies to try to get control of this. And then you have the external war. So normally, that's the pattern. I'm not saying it has to be that way. There are some exceptions, but basically, that's what changes the order because the order is determined by the rulers and those who are powerful rule. So it's always dangerous to know a little bit about macroeconomics. I was a graduate student instructor in micro and macroeconomics, so I understand the terms, but I can't wrap my head around the following.

Tell me, when have we seen this before? We have U.S. debt at an all-time high, interest rates are at an all-time low, and inflation is at a four-year high. I can't think of another. That, just based on my pedestrian understanding of macroeconomics, does not make any sense and is not sustainable, the period that is the most recent period that's most analogous is the, uh, seventies, but it's not, it didn't have the internal conflict of the same amount. There was quite a bit, but not the same amount. And it didn't have the external power of, um, issue that we're talking about. Um, but the period that we're most like is the 1930s. The beginning or the end of the 30s?

A 1930 to 45 period. In other words, the 1930s, so you had the debt problem. So in March 5th, 1933, Roosevelt gets on the radio and announces that money, as we know, it will cease to exist. It was gold, and that gold will be outlawed, and that they will then print money. And that was the exact then bottom in the markets. It didn't resolve the depression issue, but that was the exact bottom in the markets. And then you had the sequence of that set of economic problems all around the world causing problems. Japan, because of the depression, used to export a lot.

They couldn't export a lot. They needed resources. They go into China, into Manchuria, and so on. So that period was also very analogous. By the way, what Roosevelt did on March 5th, 1933, was the exact same thing that Richard Nixon did on August 15th, 1971. I was clerking on the floor of the Stock Exchange. And on Sunday night, I listened to him get on the television.

It was then television. And he did the exact same thing. But he severed the relationship with gold because they were running out of gold because people, there was too much money and they were turning it in. So he told that no longer would we stick to the promise of paying with gold and we will create the devaluation essentially of the dollar. And that ushered into the 1970s. That exact same thing happened on, I think it was April 7th, 2020. We had the financial crisis and very promptly, the federal government came out and said that we're going to send out all of those checks. And what the Federal Reserve did was to say that we're going to provide the money,

because where is the government going to get the money from that it's going to send the checks? The only way they can get the money is if they tax people. But if they tax people, it takes away from some, and they don't want to tax people. So what they did was the Federal Reserve buys the debt of the government by printing the money, buys the debt of the government. And so lo and behold, we're in this era of the inflation because it seems like it's surprising to people. Everybody's happy. They get a bunch of checks and nobody wonders where the checks came from. So that financial component has happened repeatedly over and over through time. So you're in the business of looking at macroeconomic factors, doing some scenario

planning, and then trying to figure out an investment strategy that foots best to a variety of different scenarios, given that nobody knows the future. Nobody has a crystal ball. When you look at economic history and where you believe we're in a cycle right now, what predictions or likelihoods are you comfortable putting forward around the markets, interest rates, and simply put, how people create and protect their wealth? Well, I think there's just also some obvious things like what return are you getting on cash and bonds relative to your buying power? So I would convey a message. Most investors think that cash is a safe investment. Cash is trash. I mean, what I mean by that is last year, you earn nothing on your cash, and there's a 7% inflation rate. Then there's probably next year,

we'll have a 5% inflation rate. And so the first thing I would say to all investors is to don't think in the number of dollars you're getting. Think in the buying power that you're getting, because what you're trying to store is buying power. The second thing is diversify well. I'm so with you, and I think you said it so well. What we don't know is greater than what we do know. And so you can diversify without reducing returns because diversification reduces risk. And if you diversify among good things, good investments, you don't reduce your returns. And so that type of diversification includes not just asset classes, but countries and currencies and other things.

So those would be the two things. Look at your returns in real return space and be aware of cash and debt. Be very wary of that. And diversify your portfolio into other things because that will probably be better. And when you think about, when you look at different asset classes and different geographies, what are, do you think there's asymmetric upside or some sort of dislocation around? All asset classes that did well are better investments. And because of that, they bid them up. They don't realize that they may be

just more expensive investments. So when I think about all the diversification and the movement, I want to keep moving. For example, let's say a lot of tech stocks, innovation over a period of time is the greatest force. And at the same time, there's a price. And with that price, there's also a mechanics that comes to this. For example, the most innovative stocks sometimes essentially are the most longest duration assets, because that means that the payoffs will come more years in the future. So when you change the discount rate and so on, those things can fall down. And what was the crummiest investments over a period of time that nobody wants to own, like commodities, becomes then underpriced, and there's that cycle.

So you have to have diversification, or you have to understand the cycle. So what about, I'm curious what you think about real estate? Real estate's an interesting investment in terms of pros and cons. It has the real component that you're talking about, but there are two components of real estate that become problematic at such times. Those two components are the rise in interest rates. So real estate is actually more interest rate sensitive than it is inflation sensitive. So there's not a good correlation of how it does in inflation because the interest rate component of it. And the second thing about it is it's nailed to the ground at where it can be taxable. It's the easiest asset to tax. Isn't it the most tax-advantaged asset class?

Well, no, it depends. The tax advantages are now, you know, that's a questionable way in terms of- Because of SALT, because the upside's been capped in terms of tax deduction. Because the upside has been capped in terms of tax deduction, right? So property taxes, like if you take, it depends on also location. Location is a very important consideration in watching this. I believe that we're in an environment in which there's a migration when you have this polarity. Some people go to some areas and they stay out for the, you know, partially because of taxes, partially because of different values. So now you go to a place like Florida. I'm living in Connecticut. They need money. So when you need money and property taxes

are a very easy way to get money. So all I'm saying is real estate has those pros and cons, those cross currents that are operating that way. It depends on where and so on. I like assets that also can move and that I can change my opinion on. You know, so I would like, for example, I'd rather have a leveraged inflation index bonds than real estate. We'll be right back. Think about those businesses that grew their sales beyond their forecasts.

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advice beyond basic macroeconomics. What are two or three things you're telling our elected leaders in terms of social policy as it relates to the macroeconomic environment? What do you think needs to be, what two or three things would you like to see happen at a public policy level? Well, it's overwhelmingly one thing, bipartisanship and productivity. I believe that the polarity, if we just look at the population, 30% of the population is relatively extreme right. Somewhere in the vicinity of 15% to 20% is rather extreme left. And there's a movement to those greater extremes. So if I take the Republican Party, it's more controlled by those that might be more extreme

right because 30% of the population is more than half of the Republican Party. And then you have the others. And it's moving to the extreme. By the way, this has happened through history. You lose your middle. And the reason you lose the middle is because people want people who will fight for them. That's what a populist is. So it's either of the left or the right, and they will fight.

They will not compromise. And they won't accept losing. So as we move politically, uh, the way that we're moving, uh, you're seeing a lot of people, um, in government choosing not to remain, um, in office because they don't want that middle and it's becoming more extreme. And then, um, to have increased productivity. So you increase the size of the pie and divide it well. And if I was to give you an indication, let's say, if I was president of the United States, I'd probably have a bipartisan cabinet and I'd probably have the equivalent of a Manhattan project, go away for six months and make a economic plan in which there's productivity. You have to do productivity and then, and divides the pie well. And invest in things like the high payoff

economic and social things, like education. You know, education is, when done well, is a highly productive enterprise. It'll raise living standards and so on, but it also creates closer to equal opportunity. And you don't know where the great talent's going to come from. They can come from the poorest, or they can come from the richest, or whoever, and quite often the poorest. And so talent's going to come from. They can come from the poorest or they can come from the richest, whoever, and quite often the poorest. And so it's got to be that environment of equal opportunity. And then there are some in the society who need help to establish a floor

below which you won't let things get. My wife and I work, and particularly she does, in education to try to help the poorest, performing the poorest students in the poorest school districts in Connecticut. I'll give you a quick statistic. Connecticut is one of the richest states in the country if you judge per capita income, but it has a large wealth gap. 22% of the high school students in Connecticut are either disengaged or disconnected. Disengaged means that they have an absentee rate, which is greater than 25 percent, and they're failing

classes. Or disconnected means they don't know where they are. They're dropped out of school. So one in five, more than one in five, has no future. And then you look at the incarceration cost. And so there's levels, the poverty, the lack of connectivity to invest in such things would raise productivity and would also make a society which is fairer. So I would want to do that kind of thing, hopefully on a bipartisan basis. So I want to talk a little bit about, I want to move to, a lot of young people listen to this podcast. We spend a lot of time talking about how to not only develop economic security, but how to be a better person, specifically a better man. And one of the things that we think a lot about here is that relative to other cohorts, young men are failing. They're not attaching to work. They're not attaching to school.

They're not attaching to relationships. I would love to just get your advice to your younger self and also any advice you might have. I know you've been married for 45 years. Is that right? Advice on being a good husband and a good father and also mistakes that you've learned from? Well, the advice to your 20, I think that life exists in three phases. The first phase is you're in school, you're learning, and you're learning from others, and you're dependent on others. And you come out and you don't know nothing, really, hardly anything. And you're arrogant. And you're about to enter the second phase of your life. And that second phase is going to be totally different than anything that you've experienced before. Be humble and then explore and learn because it's a smorgasbord of all

different things. And know yourself. I put out a personality profile test. It's called Principles U. It's free for everybody. It's a good way to start to learn what your nature is. Once you know your nature, you want to find your path. And so that's the most important thing. Be open-minded.

Learn and find your path, and also learn from those who are ahead of you on your path so that if you think that something's a great career, you could ask people who've been in it, what are the pros and cons for that? So that would be what I would recommend. And I think make your work and your passion the same thing, and don't forget about the money part. When you say knowing your nature, what do you mean? I think everybody, people think differently. They have different preferences. Somebody's a big picture creator thinker. Somebody's more a detail thinker. Somebody's more, there are different dimensions to each person. Their nature is their kind of where they're naturally inclined to go and their pull. What do you like? Okay. What are you like?

And what do you like to find out your pull? Also particularly appreciating the differences in others because you don't have it all. To have pros means you're going to have cons. So if you're a big picture thinker, I watched this in my company, the big picture thinker drives the detail thinker crazy and the detail thinker drives the big picture crazy, but they need each other. If they work together and understand what their nature is and probably their nature, some people are adventurous. Some people are extroverted. Some people are introverted. So there are all those tests. Myers-Briggs would say some of those. Each test says something about that nature, where your pull is.

And thoughts on being a good father and a good husband? Well, on a good husband, you're going to go on a long journey together and it's going to happen and you're going to have ups and downs. And it's like any great relationship, but it's even the most important relationship. If at the end of that, you can have a lifelong, terrific relationships, and that's whether it's your wife or your best friends or your business partner, you will have gotten the most valuable, most enjoyable thing in life. Okay. That relationship, that is a great relationship. That's been a lifelong or long relationship. And in that journey, there's going to be a challenges. You're going to raise kids. You're going to, and there are going to be things to disagree with. And if you make that your beacon, that you need to have that.

And when you encounter the difficulties that you're having along the way, that you realize that that's the greater picture, that that's the greater goal. And so you have to get over those challenges because you won't have that kind of a relationship. Of course, when you have a relationship, it doesn't mean that you're going to know that you do have a lifelong companion. Maybe you have irreconcilable differences in your learning, but you have to give it enough try to make sure that you're not letting the short-term stuff stand in the way of getting to that long-term great reward. Do you have any best practices around trying to maintain good relationships with your spouse and your friends? Yeah, quality time together, which is enjoyable

time. And also, the most valuable times are sometimes the worst times, when they're going through a very difficult time. You know, a death of a loved one. And love is a very powerful thing. So quality time of being there. To the extent you're comfortable, I'd love to get your thoughts on personal loss. You've experienced tremendous personal loss. Yes, I lost my son. The worst thing that has ever happened,

uh, could an imaginal I'd rather, I would have rather died or had everything I have taken away. Um, he, I have four sons and, uh, he was 42 and he was, uh, uh, killed in a car crash. And that happened December, year before last. So I think you're asking me how I approached it and what I think about it. Well, what could you say to other people in terms of, well, one, how has it changed your perspective on things? And what advice would you have for other people in terms of dealing with that sort of devastating loss? I think everybody has to do it the way that comes naturally to them. It happened on about a week before Christmas, December 17th. And then we, um, I took, I only wanted, and each of our family members only wanted to be among family members. And we went, um, we have a house in Vermont. We all went up to there and we did whatever came naturally, whether that's cry, tell stories, um, and reflect on him and, um, and, and reflect. I have a principle

pain plus reflection equals progress. And so we reflect, we talk about it, we help each other, we give others love and the love that others gave us, uh, made a huge difference. It really helped me to know how to help others better. And then I chose, we chose, my wife and I and others, to keep him with us in our ways. My wife and I, each morning we sit down and before we get going, we have a cup of tea together. And so what we did was we had a picture of him. We had some flowers and a candle, but we also then journaled memories of him. In other words, it's a bittersweet experience, the pain of losing him and at the same time, the being with him in that way. We didn't want to take him. We didn't want to lose him. We didn't want to not think about him. We wanted to think about him and we wanted to. So what? So we feel

the discomfort and we feel the pain. And so we found ways of keeping him close to us and to his family. We do. And that over a period of time helped us. We, we, somebody sent me, sent us a book on how to grieve and it has a page every day that you would read that we would read every day and it had a lot of good advice in it. So we kind of went into it and we did what was natural and yeah. And the lessons it provides, first of all, it puts in perspective what matters. You know, you can get tripped up on, on, on something, you know, we all every day, there might be a scrape your knee or you lose some money or you do this. And the other thing, wow, did it put in the relationships that mattered of what we lost

and mattered for what we have to the ability to savor what we have. And very much, it's like the serenity prayer. You know, God, give me the serenity to accept what I can't control. There's life and it happens to you and you go through it. So I think that that's very much the case. And then that appreciation, that lesson that I learned about really what matters and what's most important and how to savor that. And again, relationships such as savoring my grandchildren and all of that. And so that's how we, you know, have been going through it. And, you know, that's where we are.

There are many elements of life which are joyous, exciting, and so on. And you can feel those at the same time. Don't worry so much about the displeasure or the pain. You know, you just go into it and over a period of time, it becomes more sweet than bitter. Ray Dalio is the founder and co-chief investment officer of Bridgewater Associates and a director on its operating board of directors. Ray has been a global macroeconomic investor for more than 50 years. He is also the author of several New York Times bestselling books, including Principles

for Dealing with the Changing World Order, Why Nations Succeed and Fail, which is out now. He joined us from his home in Greenwich, Connecticut. Ray, thanks so much for your time and best to you on yours. Thank you. Same to you. So Algebra of Happiness, we were really moved, the entire team here by uh raised comments about the loss of his son and something that stuck with me is the process of mourning and uh not being afraid to embrace the mourning or embraces the wrong but accept it. And just the notion of him and his wife, you know, having sort of a ceremony to honor their son each morning, as if he was with them and reading a page from a book and talking about him. I think the natural tendency for a lot of us is to compartmentalize it and try and move on. And there's something to

embracing not only mourning, but I would argue the sloppy part of yourself, and a piece of advice I would have for young men is, you know, I totally forgot how to cry. I just lost the capacity to cry from the age of 25 to 40. I didn't cry when my mom died. I didn't cry when I got divorced. I didn't cry when I had businesses fail. I just kind of forgot how, and because you're in the midst of it, you're trying to get through stuff and you incorrectly conflate strength and manliness with a lack of emotion. And what you find is not only is it cathartic and healthy and emotionally intelligent to embrace those types of emotions even morning, but it helps you live a better life in the sense that it helps you get

in touch with your emotions around what is really important to you. Being moved by art, letting yourself feel things, letting yourself be emotional. I tear up at everything now, and I find that it's so rewarding because it helps me understand what is really important to me. What do I value? What are my fears? What inspires me? So embrace the mourning, embrace the grief. I love that statement from WandaVision, what is grief if not love persevering, but also embrace the sloppy side of yourself. And being strong and knowing when to have a stiff upper lip, yeah, that's important. But this is all a means to the ends. And the ends is deep, meaningful relationships. And what makes relationships deep and meaningful is that you have an appreciation for why they're important to you. You have an appreciation of how devastated

you are or would be or were when you lost somebody. That is what it means to establish the depth of those relationships. That is how we understand what is important to us, what is really meaningful. I can't think of a worse thing than going through life and never having the opportunity to really understand, because you compartmentalize your emotions, what is really important to you? What's the point? As you get older, what you want is, or what I find I want, is I want to feel things. I want to register those emotions. I want to appreciate those friendships. I want to feel that sadness that my son is going to boarding school, I'm not going to have him back because it shows me how important and how wonderful that relationship with my son,

you know, living in a household with my son has been. So embrace the sloppy part of yourself. It feels good and it makes you a better man. Our producers are Caroline Shagrin and Drew Burrows. Claire Miller is our associate producer. If you like what you heard, please follow, download, and subscribe. Thank you for listening to the Prop G Pod from the Vox Media Podcast Network. We will catch you next week on Monday and Thursday. And one quick reminder before we go,

we answer your questions about business trends, big tech, entrepreneurship, and whatever else is on your mind on the pod every Monday. Please visit officehours.propgmedia.com to submit a question. Again, that's officehours.propgmedia.com to submit a question. Everything we do, everything we do around fiscal and social policy in this country basically is a baby boomer looking at a teenager, looking at a young man and saying, fuck you. I got yours. Fuck you. I got mine. You get yours. It needs to stop. growth. In Alex Partners' 2024 Digital Disruption Report, you can learn the best path to turning that disruption into growth for your business. With a focus on clarity, direction, and effective implementation, Alex Partners provides essential support when decisive leadership is crucial. You can discover insights like these by reading Alex Partners' latest technology industry insights available at www.alexpartners.com slash Vox. That's www.alexpartners.com slash V-O-X.

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