Have you ever watched an adult cat stare at a human baby and wondered what it could possibly be thinking? Well thanks to Ray Dalio's ineffably beautiful LinkedIn blog, we may be able to answer that.
Naturally, my inclinations are to view Donald Trump's policies through the lens of one who thinks about economies and markets, as well as from my vantage point of being a global and US citizen. My perspectives are colored by studying patterns and the cause-effect relationships of history and nature. My inclinations are to view things in a mechanistic way and to try to express the cause-effect relationships in principles and algorithms. While most cause-effect relationships can be expressed that way, not all can. Human nature is one that is difficult to express this way, and it is uniquely important now in Donald Trump's presidency.
Oh, Sweet Ray, this way lies madness.
It's no secret that Ray has been attempting to figure out what Trump is doing with this whole "Presidency" routine, but what remains a mystery is how Dalio thinks his way of thinking will ever allow that to happen. Ray exists in a realm beyond ice-cold rational thinking. His management "Principles" of radical transparency creating a system of extreme order and efficacy could be used as a literal antithesis to Trump's White House of carnies with borderline personalities attempting to grab power through the spewing of constant bullshit and purposefully persistent chaos.
Picture the worst person you've ever met in finance: The guy with the drug and/or alcohol problem who engages openly in questionable sexual behaviors has lost far more money than he's ever capable of making yet lies constantly about how successful he is and becomes physically aggressive when challenged. Got the picture?
We can say with total certainty that the guy you're picturing would last longer at Bridgewater than the current President of the United States.
Yet still Ray trudges on...
Trying to figure out Donald Trump's perspective, what choices he will make, and their feedback loops has been an interesting and challenging puzzle to try to solve.
[Ed. note: This is where we think Ray stripped naked and began to walk in the woods of Westport as the early morning rain pelted against his skin before mixing with his tears of confusion.]
As a frame of reference, I'm comparing him with populists of the past. That has led me to pay special attention to how he and his adversaries approach conflict.
Let us help you here, Ray: Don't.
Attacking your own Justice Department for doing what you wanted in the first place is not rational, Ray, you can't fathom it. It's like criticizing your traders for behaving like you told them to behave...sorry, bad example.
It seems to me people who are trying to figure out whether or not to support him are faced with three big questions: 1) what exactly is the part he’s trying to optimize for (e.g., American manufacturing workers) and at the expense of whom, 2) am I more aligned with that part he is trying to protect (e.g., American manufacturing workers) or more aligned with those who will lose out (e.g., immigrants, those who will lose benefits from his budget changes), and 3) will his path of conflict rather than cooperation be effective or harmful? Sometimes conflict produces better results and sometimes it produces worse results for the people who are pursuing it to get what they want. For example, if Donald Trump were optimizing for his own well-being through conflict, it's entirely possible that he would undermine his own well-being because the retaliation could be more damaging to him than the cooperation.
This is where Trump's behavior short-circuits Ray Dalio. Taking a difficult puzzle and then applying the positive motion of conflict to create a profitable solution is what makes Ray Dalio breathe. While trying to analyze this batshit president, he is being forced to confront the limits of his beliefs. Forget predicting a macro trend, Trump's management style makes it impossible for Ray to cogently reason himself out of this paragraph.
And it gets worse...
I have to confess a personal bias that is opposite his—i.e., I'm inclined to optimize for the whole through cooperation in order to make the pie bigger, and then cooperatively and competitively divide up the pie. I believe that we are connected to our whole ecology, our whole world community, and our whole United States, such that it pays to be in symbiotic relationships with them—so, I'm concerned about his path. I am especially concerned about the consequences of his pursuing so much conflict.
The man who wrote that his employees should be like hyenas pack-hunting young defenseless wildebeests and that opinions need to be earned is concerned that the president might a bit too horny for confrontation.
Here's where Ray brings it all home:
In our study “Populism: The Phenomenon,” I highlighted that the most important thing to watch in the early days of a populist government is how conflict is handled. The more I see Donald Trump moving toward conflict rather than cooperation, the more I worry about him harming his presidency and its effects on most of us.
Ray might not be able to grasp what's going on yet (this post of his is wacky), but we are reasonably certain that we do.
See, behind all of Ray's nutty bullshit is a zealous belief in truth. Even if that truth is the opposite of what Dalio wants to hear, he has taken on an almost monastic conviction to confront that truth and use it in the best way he can. This devotion has led Ray to be nearly incapable of comprehending a 70-year-old man who has risen to the White House without seemingly ever confronting objective reality, electing instead to rage against the many truths that reveal him to be the perilously psychological incompetent that he obviously is.
Ray Dalio - like the market he so dearly loves - will always fail to analyze Trump if they continue to rely on the fact-based analysis that drive both Ray Dalio and the market. Donald Trump will inevitably subvert every rational idea that takes root while he tends the American garden, because if logic and truth are allowed to flower, his allergies will literally kill him.
We haven't been kind to Ray Dalio over the years, but even we feel compelled to take this opportunity to call out to The King of Bridgewater and beg him to stop rationally analyzing Donald Trump.
You're going to hurt yourself, Ray, and -dammit- we might actually need you right now.
A Couple of Thoughts [LinkedIn]