As many of you know, Bridgewater Associates is mega-successful, multi-billion dollar hedge fund guided by Principles, a company handbook written by founder and Mentor Ray Dalio, which instructs employees to go on radical truth seeking missions in order to better themselves and in turn the firm. Bridgewater takes the principles very seriously and each member of the staff is given spiral bound copies to read, highlight, and imbue their souls with. While the idea of Truth above all else is the overarching idea, there are literally hundreds of principles (such as 31a. “Ask yourself whether you have earned the right to have an opinion,” 130. “…Firing people is not a big deal…” and 184. “Use checklists”), which span 123 pages and are broken down into outline form after being explained at length. Though familiarity with them has always been an essential part of the job, there has never been a formal test determining that all employees met the required level of efficiency. Until now. Read more »
A Wildebeest Leaves New York Traveling North At 10 MPH. A Hyena Leaves Westport Traveling South At 15MPH. At What Time Does The Wildebeest Get Eaten?By Bess Levin
Bridgewater Associates Determines Which Employees Opinions Are More Valuable Than Others Based On A “Believability Matrix”By Bess Levin
The latest issue of AR Magazine features a lengthy profile of Ray Dalio’s mega-successful Bridgewater Associates, with much space devoted to the “culture” of the firm, as defined by Principles, a handbook of sorts written by Dalio, which we shared last May. In sum, the firm requires its employees, 30 percent of whom leave within two years of being hired, to “trust in truth” and to “pursue the truth” relentlessly, in everything they do. Criticism is “both welcomed and encouraged” and rather than “depersonalizing mistakes” or saying “we didn’t handle this well,” the staff are told to “connect specific mistakes to specific people.” It’s an environment unlike any other hedge fund and those who’ve experienced the program firsthand seem to be divided into two camps, at least among those interviewed by AR**: Dalio and the Bridgewater officials (senior staff are referred to as “culture carriers”) who think it’s great and former employees who describe the place as “cultlike,” “sinister,” “eerie” and something out of George Orwell’s 1984. Here’s what one former exec had to say:
My fundamental belief is that Bridgewater is a cult. It’s isolated, it has a charismatic leader and it has its own dogma.” It was so stressful, he recalls, that one employee couldn’t sleep all night and then, in the morning, threw up before meetings with Dalio. (The incident could not be confirmed.)
Another likened being an employee at Bridgewater to being an abused puppy. Read more »
In the thirty-five years since its founding, Ray Dalio’s Bridgewater Associates has done quite well for itself, posting the sort of returns clients appreciate. To that end, the firm’s Pure Alpha Strategy was up 31% for the year through August and, according to a Bridgewater spokeswoman, has “outperformed the market over the last three years by more than 70 percent.”
How do they do it? Are they role-playing hyena and wildebeest again? Is the market the wildebeest in this scenario? As B-Water’s ability to make it rain does not appear to be covered in the firm’s handbook, co-chief investment officer helpfully broke it down today.
The short version: “Either we are of average intelligence and everyone else in the industry is an idiot or we are fucking geniuses and make people of marginally respectable intelligence (you) look like morons. Take your pick.”
The long version: Read more »
Yesterday we discussed Bridgewater Associates’ “Principles,” the meanderings of founder Ray Dalio, which serves as the hedge fund’s unofficial handbook. While clients probably have no problem with it, not everyone counts themselves as fans of the Tao of Dal, which includes operating “like a hyena, attacking the wildebeest,” “probing” ones colleagues and having their meetings taped all in an effort to get to the “truth.” Today Ray got in touch with us to a) clear up some perceived misconceptions, re the T of D, b) respond to the characterizations of the of the firm made by a friend of BA and c) provide an up to date copy of “Principles” (yesterday’s PDF was a draft from last fall), which you can use yourself, should you be interested in starting your own little B-water (they also make great stocking stuffers).
So, you’re going to work for Bridgewater, are you? Contrary to what various know-nothings will tell you, our nation’s greatest hedge funds are not soulless, interchangeable institutions that you can just bounce through like a bunch of cheap whores. They are delicate flowers that need to be finessed if you wanna make it past day one. If you’re not familiar with what makes Hedge Fund A (where crotchless panties and a mastery of BJ skills are required) different and unique from Hedge Fund B (where failure to really get in touch with your feelings re: 1-stock funds is seriously frowned upon) and Hedge Fund C (where it’s ALL ABOUT THE CHICKEN), the various company policies can come as a shock. For instance, if you didn’t know anything about the Bridgewater’s Tao of Dalio, which requires all employees to “probe” their colleagues (boss’s included), you might find yourself asking “WTF is this shit?” What this shit– the Culture of the Probe– is, is the secret to B-water’s success, the tenets of which comprise “Principles,” the hedge fund’s unofficial handbook, written by founder Ray Dalio. Some people, who were not familiar with the “Principles” prior to joining team BW, would not count themselves as fans of the Tao of Dal.
Ray encourages employees to live by the “Principles” and everyone is encouraged to quote them and use them in the day to day goings on of the company. “Culture carriers,” as he likes to call them, are those that commit the 200+ principles to heart and quote them in meetings and emails. The principles are pretty cult-ish, as is the culture of the whole company. At one of our town halls he handed out personally signed copies of them to everyone. The firm castigates anyone who doesn’t worship Dalio.
Most management meetings and department meetings are recorded, both the business and tech side, as are individual quarterly reviews or any meeting at managements discretion. Often if a manager or Ray thinks something is worth educational value they will email out a meeting recording company wide, these usually involve the individual getting shredded publicly for the greater good of the company. An example would be like when former COO Hope Woodhouse was shredded in front of the management committee and the sessions were sent out to the company to learn from (she was brought to the point of crying in the recording). Everyone is encouraged to given open and honest feedback so meetings often resort to public shaming and the demolition of people. 360s end up being everyone’s chance to totally dig on and destroy other individuals and say whatever things all year you’ve hated about people, 90% of feedback received in 360s is negative.
From the outside people think it’s a nice wholesome principled place that wants to cut through the corporate BS but it’s anything but. Ray’s hyper realism (in “Principles”) is insane. Once you read it you’ll get the idea– it’s all about adherence and indoctrination.
But that’s just, like, his/her opinion. Some of my best friends love the Principles! Regardless, that’s not the point. The point is that because there will apparently will be a quiz on these bad boys, we should probably take a look see. Read more »