Decision making: how to outsmart your biases AND know you’re right
Feb 01, 2018 | Posted by Cristina in Newsletters
Being a business leader requires you to challenge the status quo and bet against the consensus.
A few years after he started his firm, Ray Dalio confidently predicted that the global economy was heading into a depression and positioned himself accordingly in the stock market.
He was dead wrong. He lost so much money that he went broke, couldn’t afford to pay the people who worked with him, had to borrow money from his parents, and almost shut down his company.
As painful as it was back then, he now sees it as the best thing that ever happened to him.
It gave Ray the humility he needed in order to become successful and turn Bridgewater into the biggest hedge fund in the world.
That experience forced him to shift his attitude and look at himself as a professional mistake maker.
What does that mean? Instead of thinking he’s right, he’s now asking himself how can he know he’s right.
He’s aware that he’s going to be wrong many times, so he became obsessed with minimizing risks. He’ll focus on what he doesn’t know. He’ll be looking for smart people who can have thoughtful disagreements. And they’ll make decisions based on an idea meritocracy, a way that can resolve differences and have the best ideas win.
You can learn more from his book, Principles.
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