Ray Dalio, Founder and Chairman, Bridgewater Associates

Ray, we're so excited to have you here tonight at Stanford, thanks for joining us. I am so happy to be here. Well, Ray, as a tribute to Bridgewater. We are going to video record this conversation. Okay, but I had to veto it. of this life scoring stuff I'm just not at your level and I have hundreds of comments, but we have a lot to cover your life, your principles and how you think about the future, but before we start I want to get a sense of our audience here. tonight, so please raise your hand if you have read or we have read the principles of Ray's book.

Wow, wow, pretty good, and for the rest of you, how many of you plan to read the principles? Yeah, they're an ambitious bunch for anyone else, right? at least have your own moral principles yeah, okay, okay, let's start in the early days on Long Island no, you were quite capitalist when you were a kid, you were a paperboy, a lawn mower, a snow shovel and a golf cart, and in old age out of 12. You made your first investment in the stock market. Talk to us about how that happens. Well, you know everyone was talking about the stock market. literally if he got a haircut or anything everyone would talk to you about the stock market so when I was talking they would talk to me about the stock market and I would take my $6 a bag take my $12 and when I got 50 Dollars.

I put it in the stock market, it was a natural thing and it worked pretty well on the first investment. Yeah, it was the only company I had heard of that was selling for less than $5 a share, so I thought. I could buy more shares which meant if it exploded I would make more money, that was my reasoning, that was the right rationale and it was a company that was about to go bankrupt, but another company acquired it, its value tripled and I thought this Easy game, I can win a lot of money. The game isn't easy, but that's what got me hooked, so you got off to a good start, but you continued to invest through high school and college and then you enrolled in a business school that we like to call the Stanford of the East, where you met, of course, Joel Peterson and Joel was in my core group and now we have good memories, you know, we'll talk about them later, for your summer internship, a lot of your classmates were going to Wall Street and looking for these glamorous stock trading positions, on the other hand, you saw that a position in commodities trading which at the time was not only less prestigious was quite obscure for an MBA to seek that type of position, so tell us about what that means .

The experience of going against the grain taught you well. I thought they had low margin requirements. Basically you only had to put up about 10% of the money so I figured if you were going to be right you would make more money because of the low margin requirements so I got hooked on commodities trading and then there was no one who wanted go from Harvard Business School, so this was in 1972, the summer of 1972, when I went to the director of commodities and begged him for a job and he gave me I got a job and that was right before the crisis of the 1973 oil and the oil crisis and then Wall Street went to hell and commodities became hot and I got lucky so I got into commodities so you were already a hot property in the second year and I never did it.

I never really knew anything about commodities other than the summer job, but then I was hot property because there weren't any Harvard Business School type people in commodities, so I got a job that was stupid to hire me , but they did and then that company got into trouble and then I went to another company and did that for about a year and then I started Bridgewater so I just want you to have missed something there and a lot of us here in the room know you as a teacher, a teacher of thoughtful disagreement, okay, but you didn't have that concept fully defined in those early days, so tell us about that disagreement you had with your boss on New Year's Eve, well, we got drunk and then you know we loved it. him and he was a good guy and, but what did he do, he drove home, wrecked his car, his wife told him off because he missed the party and came in with a black eye and he didn't fire me. he didn't fire me, he didn't fire me, okay, and then it was another incident that got me fired, but I want to know what got you fired.

Can you tell us that they are somewhere anyway and that was the best thing that really happened? for me because then I was alone, now some of our professional advisors around here we might frame that as passion, and it was, in retrospect, it was a stupid thing to get right, but it was. I guess that was exactly how I was at the time, so you go ahead and start Bridgewater Associates from your two-bedroom apartment in New York, so you're 26 years old, a first-time entrepreneur and a professional investor, now kind of like that . The roles seem to have in common: you have a high risk of making mistakes and mistakes.

Tell us about your relationship with mistakes and how they led to your principles. Yes, I think in general, as an entrepreneur or in the markets, you have to think. differently to be successful, I am the markets, whatever the vision is, it is built into the price because it reflects the consensus and as an entrepreneur starting to open a business you have to think differently and there is a high risk of being wrong, and so what I learned during that period, you have to be bold, you have to think differently, you have to be confident and then you also experience a high risk of making mistakes and I think we're going to see a fragment of one of those really big mistakes.

That I did that changed my whole approach to decision making, so in 1980-81 I had calculated that American banks had stopped lending a lot more money to foreign countries and those countries were going to be able to pay it back and that we were going to have a credit crisis. debt and I thought that would cause an economic collapse and in August of 1982 Mexico defaulted on its debt and I got a lot of attention for that and I was asked to speak in Congress at that time and I was also on Wall Street. week and we brought a clip of that to give you an idea of ​​that.

So can you press the button and show the clip to Mr. President Mr. Mitchell, it is a great pleasure and a great honor to be able to stand before you and examine what is going wrong in our economy. The economy is now teetering on the brink of failure. He was recently quoted in an article as saying, "I can say this." With absolute certainty, because I know how markets work, I can say with absolute certainty that if we look at the liquidity base of companies and the world as a whole, we see that there is a level of liquidity so reduced that it cannot be restored. an era of stagflation, was I not arrogant? incredibly arrogant.

I couldn't have been more wrong. I was so wrong. That was exactly the bottom of the stock market. August 1982. Mexico defaulted on its debt and was the bottom of the stock market. We had a great bullish mark. and then I had, I think, about eight people in Bridgewater and I had to let him go and I was so broke that I had to borrow $4,000 from my father to pay my family's bills and that was very painful and changed my whole life. approach to decision making because it made me think about the future how I know I'm not wrong how I know I'm right it gave me the humility I needed to balance my boldness and it made me bring in people who would disagree with me so I wanted to find the smartest people who disagreed with me and I really, you know, I started thinking about how I would deal with disagreement and I would say this is a very important thing, it's a great pleasure to be By the way, because you're starting this phase of your career, you are about to enter what I call the second phase of your life.

The first phase of your life is when you depend on others and you are learning the second phase. of your life is that when you are working and eventually others become dependent on you and in that second phase it is totally different and I am going to my third phase and thus be able to transmit some things that were useful For me, where it is is a pleasure and in that sense I would say that you will continue to have failures and successes and it is in failures where you learn the most, so my attitude began to change in terms of making decisions, the most important thing.

I would see every failure as a puzzle that would give me a gem if I could solve the puzzle and the puzzle was what would I do differently in the future to not have that bad outcome, and if I could see that, that would give me a gem. give me the gem and the gem was the principle and the other thing I did was I wrote down all my principles for decision making, one would make a decision, I would take the time and say what my criteria are for making that decision and that was so available , I would like to convey that to you, you are going to encounter so many things in your life and you are going to make decisions like that if, instead, you pause and think, what are my criteria for making that decision?

Write it down and then reflect on it, you will start to realize that the same thing happens over and over again and when the next one comes along you will reflect on that principle and perfect it and it also serves its purpose. of allowing you to communicate very effectively with others, so when I started my business it was great because we would all know what to expect and why, and that whole process, I mean, I think really the whole notion of the best comes from learning. starting from mistakes and doing it systematically, failure is just part of the journey and to get to those mistakes, we ran to bring them to light, you needed an idea of ​​meritocracy and for that you needed radical truth and radical transparency, talk to us a bit. a little bit about those two columns, yeah, I don't know exactly, you have that diagram, okay, Zack, yeah, so that's how it worked for me, so to be six years old and be successful I needed independent thinkers that wouldn't agree. with me and that we wouldn't agree with each other because otherwise it's that false trust, how do you stress test each other to come up with the best idea?

So I needed independent thinkers who also wanted to pursue bold goals, so if you have Independent Thinkers, how are they going to overcome disagreement? You actually need to have a system for disagreeing and overcoming disagreement, so I needed an idea of ​​meritocracy, in other words, an actual process that organizes disagreement to overcome it and be able to do it. that then I needed to have that principle that I needed to write it down and we all needed to know what those rules are and then we needed to create these systems and then when we did that, that changed everything, that thoughtful disagreement because it's a collective decision. -do in which the chances of making a correct decision are significantly increased.

I think probably the greatest tragedy of people and one of the greatest tragedies of humanity is people who have opinions in their minds that they are attached to and that are wrong and that they could so easily do stress tests and significantly increase the probability of being right, so we needed to do that and when we did we had our successes and our failures, but we, but people believed in that idea of ​​meritocracy and it was fair because the system If you have a system where you can fight for your arguments and you know the system is going to be fair, you can care more, so that's the superior organization that I needed and that was the key to any success that I've had. in my life it has had more to do with knowing how to deal with what I don't know than because of everything I know and that idea of ​​meritocracy than triangulation with smart people, I'm sorry, I want to delve deeper into this radical, radical truth. transparency I think for many of us listening here it's very difficult to argue with the logic of what you're saying, and yet the culture at Bridgewater feels quite foreign to what most of us have experienced in our personal or professional lives. .

What is it about? this concept that is so difficult for us to accept by the way that is the competitive advantage because if it were, you know, if you said what the advantage is, that is the advantage, I think we have ego barriers and blind spots that get in the way of our In that way, that notion of attachment to what you know is something so important to your ego or your blind spot, so there is a subliminal reaction when you disagree, instead of producing curiosity, it produces antagonism as if it were a reaction of the amygdala and I I think it also has a lot to do with the educational system.

You know you're rewarded for knowing or you're rewarded for not making mistakes instead of knowing what your weaknesses are. To overcome it, you have to overcome it intellectually. say, does it make sense? so let's say we're going to be in a relationship and now you're working there and you're my cool partner and I owe you how it is, but would you say you would. say you want me to know you want to know what I really think you want to tell me what you really think you want to know your weaknesses hmm you want me to know my weaknesses intellectually you would say you would want to know your weaknesses, why wouldn't you want to know your weaknesses emotionally?

That can be difficult, so you need to adapt. So what we describeis that you have to use it, there is and this is correct in terms of, literally, there is a consciousness. Thoughtful you could say I wish I did those things. I would like to know my weaknesses so I can know how to deal with them and then there is an emotional you that is subliminal and it is really the battle with your use that you have. with yourself and once people start to realize that and they get into that environment and then they see that they are actually fighting more with themselves than each other, so radical truthfulness, in the right way, is less.

To have radical truthfulness, you have to put in what you want. Honestly, think at the table: can you do that? And then transparency means you can see everything, so what I did was everyone could see everything, so that was the main thing, so when I made decisions, I would make decisions. You would be very right, we would be open about what I was doing in the most difficult decisions we would make and then I would refer to the principles and then I would have everyone question me about whether that made sense and so our intellectual approach overcame our emotional barriers, but I think that It's like that for the physical, you know, I was HR McMasters here and he was a great host to me and I got to see the Ranger School and I think about those people who were trying hard and how they tried hard. and they were doing the physical equivalent, although the Bentall was equally important and that produces that particular tension that they wanted and that's what Bridgewater is about, but it's not for everyone, as some people would care about Army Rangers, it's off for everyone, but it's powerful because you build them you build meaningful work and meaningful relationships in other words, I think that's the power if you're committed to your mission like you're excited that we're going to do this together, maybe a startup or maybe whatever.

Are you on that mission together and at the same time that you're on that mission you have these meaningful relationships that mean total honesty and with that total honesty and that meaningful relationship do you derive joy from the relationship just as well as you do? enjoys being successful and it doesn't have that two-faced nature, it doesn't have politics behind it, it's just straightforward, so yeah, that's right, so that's really what you're avoiding, it's the kind of politics and gossip. that you might have in the normal world, although it's not for everyone, not everyone can accept this, it changes, it changes, it changes the ethics, like you don't talk behind someone's back and the reason is because, first of all, it's almost like If unproductive, if you're talking behind someone's back, then you're not addressing the particular issue in a place like where we value anyone speaking with their point of view, so you can bring it up and then you can address it, but then it also becomes ethical: Don't you have the guts to talk about what you're saying?

So if you have the guts, it's almost humiliating to talk behind someone's back and that standard is upheld and it's you know, this leads to that kind of radical truthfulness, that radical transparency, then you have some people for whom you know it's not at all and then you have people who couldn't work anywhere else because they wouldn't want to work, they go to the company and everyone is smiling and high-fiving and whatever and everyone is talking: I supported each other, there's a lot of politics going on and with the that they can't deal with, so a lot of people wouldn't want to do it.

They work anywhere else and some people it's not the right place for Surrey. They have actually built a machine that supports this culture and they also believe that humans are machines. I think few companies have done more than Bridgewater to try to use data to understand. their employees to put their attributes and talents into numbers, so I'm curious to see a tension between this explicit labeling of a person's abilities with what Carol Dweck at Stanford might call this growth mindset, the idea that a person's abilities A person's talents and even intelligence are more fluid and can change well.

I think I'm just trying to be as accurate as possible and change, if a change happens, it's reflected in the numbers and everyone sees the change, so it's a lot, but I think at any time. Right now you have to be realistic about where you are and you have to recognize that people have different strengths and weaknesses and if you are not dealing with that, that is a particular problem that hinders the growth of that particular person and then also the people. they make decisions about other people there so if I'm your boss or if I make that decision if I'm not open if I don't give you that constant feedback and also if I'm not collecting data from others because I'm not sure I'm right so the data they help speak for themselves in terms of understanding what a person is like, so I think knowing that is a good thing, although that doesn't mean you don't know.

Getting in the way of evolution means that to whatever degree evolution occurs, you'll be able to see it, so I think in the broader context here, many of us will graduate in a few months and some of us will take the decision to return to a job and role that we know how to do and that suits us or branch off down a new and proven path based on what you have seen in Bridgewater, what you might advise us and how we think about it. It's time for your adventure, you're experimenting, you're learning, it's the right time for that experimentation and I guarantee that wherever you're going to be in five years is going to change, you know that, go for the experience, but I think the most important thing is .

What I would say when you embark on that adventure is to understand how to triangulate well. What I mean is find the three or four smartest people to address the biggest questions you're facing, especially if they're willing to do so. They don't agree with each other and they don't agree with you on that and then with that triangulation where are your areas of disagreement that will come to the surface and you'll find out what you know, what could be, you'll learn a lot and then through that that humility you go through experiences and make the most of your failures the adventurers make the discovery go for it okay, okay, we're done, thank you very much as a joke, but the other, the other question that we face, Ray is what kind of organization to the one we join together, so I think culture is the most important thing.

I think who you are good with and where you are is much more important than what you do, sorry let me talk about that, so let's say you are in our shoes you are about to enter the working world and you want to work in a meritocracy of ideas . Many in this room will be joining large organizations that have ingrained hierarchies, cultures and norms, so talk to us in a practical sense about how we can bring some of these ideas to the workplace, well you have to, you have the option to work in whatever culture you want, the most important thing is to work on the culture now that you grew up in here in your upbringing and before you try to do it.

I have the opportunity to make sense of things, so I would come to your work and say that if something doesn't make sense to me, do I have the right to say it doesn't make sense to me and ask you why it makes sense? and to be able to probe you or I don't have that right and I think you should think carefully about whether you want to be in the organization that doesn't give you that right, so I think the most important thing for Stan is to be in that kind of organization with humility, in other words , recognizing that it may not be, but you always have the right to make sense of things and if something doesn't make sense to say it, it doesn't make sense, so I would say that would be the most important thing for me if you are going to learn because otherwise you will be someone asleep, you know they will tell you to do these things and you will just run and follow their instructions etc.

You won't learn if you follow their instructions because you have to think for yourself. I think you have given us many tools to do it well. I want to talk a little bit about your legacy. You have accumulated them. principles for 40 years you have decided to share them as part of what you call this third phase of your life a question Joel often asks in class is how do you feel about winning you have invested large amounts of your time and energy in this public facing role , what it's like to win in this third phase. I think throughout life everything is just a matter of personal evolution and contributing to evolution, for me you evolve and there is an instinctive reaction that I had that what I wanted to do is pass on the things that are valuable to me so that I can go beyond that and to my son in 2014, when he was making this transition, this book, The Hero of a Thousand Faces by Joseph Campbell, and he describes these various phases of our lives that I proposed it to him and I It won't guide you through all of them, but there is a call to adventure, you embark on the adventure, you have your ups and downs, you reflect on them, etc., and then when you get to this stage of your life, it is what you want most.

It's not being successful, you've made it, you don't want to be more successful, you want to help others be successful without you and that's what I feel and then when I feel like if I had done the best job, I will have done my best job and we're okay, so that's my gut reaction at first. Well, you've given us a lot of a start and I know there are many out there who haven't read the book, so you're not quite there yet. yet, but I want it, I want to say it just for everyone and I will mention it.

Maybe later what I did was there's the book and then I turned the book into an app that has the actual Bridgewater cases so you can attend the meetings. and you can actually see this in the so-called principles in action, it's a free app in the Apple Store and it will take you to that so you get an idea of ​​what it's like, many more case studies, we love Ray's, now, we. I could make another mistake in these principles, but unfortunately you have too many other perspectives that we want to explore. Let's start with the story.

You are a student of history. You've claimed that everything that happens is just another one of those. I'm curious when you look today at our stage in the economic cycle, our political tensions, our geopolitical tensions, what is the historical precedent for what you see and what does that tell us about what will happen next? Well, I think there were cause-and-effect relationships and then they repeat themselves. along the history. I think it is important to not only assume that because they happened in the past they will happen again, but also to understand the cause-effect relationships. So, in answer to your question, I like to refer to both things.

What I learned was that almost every time I was surprised by the things that happened, they didn't happen OTT, they happened in my life, but they happened many times before and as a result of that, I really discovered that I really needed to do it. understanding history and why things happen before it and that in 2007 because I studied what happened in the Great Depression allowed me to anticipate the financial crisis of 2008 because of what happened in 1929 and 32, so the period that I think The most analogous was in the late 1930s and I will explain why and this is just its mechanics: we had a debt crisis in 1932, from 1929 to 1932, and in both cases interest rates went to zero only twice in the century that that happened.

When interest rates hit zero, central banks had to print money and buy financial assets. We call that quantitative easing. Those purchases of financial assets increase the prices of financial assets and as a result of increasing that, it causes the economy to go up, so 1932. Until 1937, the economy, the stock market went up, everything went up in the same way as since 2009 until recently and then, but because they caused phonetics, they bought financial assets, those with financial assets benefited more than those who did not have financial assets. assets and there were other factors, like today technology is replacing people and as a result we started to have a huge wealth gap, so if you look at today, the top tenth of one percent of the net worth of the population is equal to the bottom 90% combined. and if you take that or measures like that, the wealth gap is the same as it was in that period of the 1930s and with a large wealth gap and differences in values, then you have populism, the rise of populism, left-wing populism. and right-wing populism and if you look at history, the law, if you were to say when was the last time there was populism in major countries, it was in that period of time for similar reasons and at that time we also had the classic uprising of a power to challenge as an existing power, in that case it was Germany rising to challenge the British, the British Empire, and then Japan and Asia, and as now we have China rising and there is a calm, a rivalry, a conflict, so that the only time periods As you can see, that was analogous recently, the most recent time period is like that, so I would say what are the big problems of the time.

The big problems today are that there is a limited ability of central banks to ease monetary policy because we have interest rates close to zero in most cases around the world, so the ability of central banks is limited , we have a very large wealth gap and with that we have polarity, a lot of political polarity, democracy,even being challenged by that polarity, right? these conflicts around the world and left-wing populism and right-wing populism having big economic implications has what it will mean for fiscal policy and what it will mean even for conflicts between countries, so we have that situation of rising power , so that time period seems more analogous to today, you've covered a lot of things, Ray, and we'll try to delve into some of them just as we left them at a high level.

It's a pretty striking comparison and we know how the 1930s ended. I think on our current trajectory we are headed towards some kind of conflict. Well, we certainly address different types of conflicts. The question, I think, is how we are going to handle them. Certainly we are heading internally towards many conflicts. If you were to take the polls of the Republican Party, which is the most conservative it's ever been, the Democratic Party is the most liberal, their lever is voting along party lines, the highest it's ever been, 94 percent of the votes are. along party lines, so we certainly have an internal conflict and that internal conflict has to do with the combination.

I think about the economic conditions that are gone and the writer who says that socialism and capitalism are our problems and then there are also ways in which we are to be together, I would say that you know, I don't know, we are clear about what principles unite us as a country . I mean, I think we should go to the principles, what principles unite us as a country, what do we believe in? They are the principles that divide us, but anyway I think we are having more internal conflicts and then international conflicts, there will be a challenge, a competition that is happening between the United States and China and other places, but particularly the United States and China, which is a completely different discussion that doesn't have to be a military conflict, although it could be and it depends, I think, on how we handle the conflict, so I think there is the relationship between China and the United States, which is an issue where We could digress if you want. to cover it, but I think it all depends on how we are going to be with each other, so let's say this topic of the wealth gap and the left and the right.

My big fear is that the conflict will then end badly with their knee-jerk policies. It can cause us to have worse conditions than we need. There are sufficient resources to move towards greater equality of opportunity. In various ways we can deal with this together, but yes, I think we are an environment where conflict is going to be more problematic than what we have actually experienced now, there are two issues, the external conflict, the internal conflict in our own country, you talked about redistribution and recently published an article about how and why there is a need to reform capitalism and a need for more redistribution because it is tax day, April 15.

Apologies, would you agree that a person of your means and wealth should be taxed more by the US government to help achieve this? Yes, I think it's inevitable that yes, I think, but I think the real question is the most important one: Are we striving to have a country? What is our American dream? Do we strive to have a country that is something? Court. Long lines for equal opportunities. Are we trying hard? How do we feel when there is school? districts that do not have adequate resources, not even close to adequate, that are not enough, are allocated to nutrition, there is nothing that comes close to equality in education.

I divided the economy into two parts so I could see it because it gets lost in the averages, so the top forty percent in the bottom sixty percent because I wanted to see what most of the people in the bottom sixty percent are like and certain things like The average in the top forty percent will spend five times more on their children's education than in the bottom 60 percent and school districts are starved for resources and there is a completely different life. I can mention it if you want to go see it. I would really love for you to go see it.

It's a study and it's on LinkedIn and it shows the results. so I guess what I'm seeing I would say is not a fair system and beyond that, it is a system that threatens to destroy us if we don't find a way to reform it now that I am a capitalist. I want to. I believe in the idea of ​​working hard, earning and then saving, and what capitalism is is you buy an instrument of capitalism, now you buy shares, that's capitalism, you own a part of that business and I think that's fantastic. , but what do I have to like? everything has to be improved over time with the Reformation, so are we producing the results we want?

So when you read that, you see if we're producing the results we want. I don't think so, so I say I think we have Modifying the way we do it now is going to be the most important thing, it has to be a good engineering exercise which I think has to be first, it has to be done in a bipartisan way because I think this division is a problem and I really believe in thoughtful disagreement, so if you bring together the people who are going to live in these communities and then you have the right metrics, I think it would be great if the leadership could be the leadership of the United States, it could be the leadership of The state says that this is a critical issue that we have to deal with, that they put metrics on it, so they own, in other words, numbers and keys, you know, KPIs and they say that the condition is that the standard of living be the same or increasing. and one of the things we are doing in terms of education and with those measures then working together in terms of doing sensible engineering.

I have my own views on what could be done, but you know how we get into that, that's a whole conversation. I'm not sure, I'm sure my views should be important, this is just one of other views, but if we don't do it together and we don't treat it as a really important critical issue, I think it is the most critical issue. of our time. Now I think we're going to have problems, so yes, of course there has to be, but there has to be a redistribution of opportunities, it's not just a redistribution of money, but when you pay, you get the school books, you get the nutrition, you get those basic things.

I think that's key, well Ray, at least we're out of time for now. I want to make sure that our audience here has the opportunity to ask you questions, so anyone who has a question, please raise your hand and we'll find you. a microphone and then, if you are selected, stand up and introduce yourself before asking your question. Hello, my name is Max. I'm MB1. I am from Russia. Very sorry. I don't know the local political landscape very well, but my question is. Having a great reputation, knowledge and leadership experience in this country, why don't you run for President of the United States? because I don't think the political system and I get along well.

I don't think he would do it. I think it is a very difficult system. I don't think it's effective. I think the political system, even the way it's structured, where the two parties are and the way they approach it, and you know, I think it's a challenge. It's almost impossible to win and I'm fine anyway. Can I right now, in this brief moment, convey some thoughts that others in that position or any position might take or leave, thank you for being here. m Ida garma I am a first-year MBA student. I have two questions. If you want to be fair, you can choose one to answer.

You know, we understand that you are quite quantitative and systematic in the way you think about decisions. for investments in your business and also in your personal life. I wonder what you think about this notion of intuition. Do you believe in her? He uses it? And my second question is: you know? I'm quite inspired by how he talks about equality. of opportunity I think it's fantastic. I suspect that you have colleagues and colleagues who may not think the same and how can you talk to them about this thing that you are so passionate about? Yeah, so the first question, yeah, intuition, intuition, yeah.

I guess I think decision making is a comedy, it's subliminal and logical, and great ideas come from subliminal decision making, but you may not know if they're great or not and you have to reconcile them with logic, so yes, intuition. This can be very, very valuable, we feel like you see it, it's subliminal, the ability to collect dots, connect dots and see things that way, imagination, all of that, some of the best ideas come subliminally, like you're taking a hot bath. You take a shower and these ideas come to you, it's not like you're sitting there working hard on those ideas, they come and they can be fabulous.

I think the key is to reconcile them with your logic because they could also be misleading, so yes, I would say. they are at least as valuable as the logical idea and the second question was about how you have those conversations with your peers. Oh, I just thought of a thoughtful disagreement. I mean, I love disagreement. I just have to say what I believe and others say what they believe and then we have a conversation about it and I love doing it openly, so if you would sit here and have a conversation, I would appreciate anyone who has a different point of view to have a thoughtful conversation that It's easy to see no reason why there shouldn't be a good disagreement.

Hello, right, I'm fine. I'm mainly FS here. I'm a student and I know you remember the Giving Pledge, so I was wondering what principles you apply to. you are giving to maximize the social return on your investment in the same way you did with your financial returns. Yes, the saying that it's harder to give money away than to earn it is actually true because when you're looking for a profit, you'll make it. knowing if you're succeeding or failing when you're giving away money it's very difficult to have those kinds of metrics and weighing one thing or another is a lot more confusing but I tend to take the same approach as I would in my investment meaning I try to think in terms of return on investment. investment, but I don't think in terms of, I think in terms of double bottom line return on investment, in other words, what is the social impact that it has?

Does it relate to what is the value of saving alive? What is the value of an education? How is it weighed? It does not have a common denominator like return on investment. It has a number. It's money and that's how it is. So it becomes a challenge for me to think about trying to do that, so we'll set KPIs and we'll do that, but I also relate to the passion as I've decided how I'm going to take that approach and that approach that I have I make it a family activity. My family members, different to varying degrees, are interested in their own philanthropic endeavors and each of them has their own particular passion.

I think that's cool, so I would say when you get past a certain point, what do you think about? is what you really want to do, you don't think so much about profits but about what you want to do and I think maybe as you get older or feel more connected, yeah, and also realize the blessings that I had because I had nothing and then I evolved and you see what other people are like that marginal benefit of spending money on yourself to be able to help other people makes a big difference for those things to return on investment.

How do I make it sustainable? How do I measure? How do I judge how well we are doing as a family? How do I establish principles? We have a lot of principles that people must follow to do it well. It's similar, but it's more difficult because of the fact that you know you can't account for it very well, so if you were to think about what you should give money to, could you measure whether education is here or Life or those are hard questions to answer, but you work on it yourself. I joined The Giving Pledge mainly because I learn a lot from people and they are in similar circumstances and they brainstorm well and you know it's a learning process.

Hello Reuben. Arnold MBA 2, so I know you've tried to transition out of the company and transition checked the company several times over the last few years as it moves into this third phase. I was wondering if you could talk a little bit about the dynamic that might have. made that transition difficult, well luckily I had this director, here's the background, about nine years ago I decided I wanted to make the transition, it was a big deal and I didn't know how long it was going to take, I thought it would take about two years because I was working with people for several years and I thought it was going to be great, but on the other hand I learned to never believe what I think is a theory.

I don't believe it if I haven't done it. something before successfully so I can't assume that I know how to do it so I said then, you know, maybe it could take up to 10 years. I think it took me about eight and a half years to get it right. you go on a journey um, I didn't know anything about governance. I had just run the company and with this, with this idea of ​​meritocracy, I put myself in a position where I would report to this management committee, they could hire me, they could fire me, they could operate.

In that way, to hold myself accountable to this idea of ​​meritocracy and I thought this was going to work, I made the transition and then, with thedifficulty, I realized that it wouldn't work and we all agreed that it wasn't working and then We set up a governance system, you know the right board and I realized that I learned a lot about governance and I learned how to transfer those responsibilities to others and then we fixed it and it's been about a year and a half since then. I came out of that so I think the lesson is like I was saying, if you haven't done something three times before successfully, don't assume you can do it and that was very helpful for me so through that trial and error it was part of the learning process, so I think that's the saying I guess that would be the principle if you haven't done something successfully three times before, don't assume you know how to do it.

Hi Alyssa, I'm an MBA and when people talk about economic opportunity we often talk about the children of the poor becoming rich, but we rarely talk about the children of the rich leaving room for other people, so I was wondering if their emphasis on equal opportunity affected the way they parent. Well, yes, I see, but I think I had an experience. because and I think my children were lucky because I didn't have the most important things I shouldn't say I had nothing I had parents who loved me I had I had proper nutrition I was well taken care of I went to a public high school but I didn't have much more than that and then , when I was there for most of my life, my kids didn't have much more than that, so they got to school, they know the difference, they know about what the marginal utility of having a lot is relative to that, it's not much and then you start to create that sense of value, so my own experience affected my reaction to it.

I don't know what it would be like to be born. rich and then find out what that's like. I don't know what it would be like, it must be a lot harder in terms of that, but my experience naturally told me the differences and I think it's important to understand that there have been a number of Happiness studies around the world probably have Stanford professors who They want to study happiness and the only thing is that they found that there is no correlation beyond the basic level of money and happiness, but the one thing that seems to be the most important in all communities.

There's a sense of community in your relationships, your personal relationships, so I think that affected my approach, but I wouldn't know how to do it if I wasn't, if I didn't experience that, I don't think. Maybe it's time to ask one more question. Hello, I'm David and I'm a third year student. In your interviews and your book you talk about some great leaders like Steve Jobs and Lee Kuan Yew. Could you tell us about some of your favorite stories about great people? characters of people like that great stories of great characters stories of great characters well, different qualities and those two people, but I think that Lee Kuan Yew was a wise, balanced and selfless person, a great leader who had the vision and the common. sense and wisdom to also suffer the obstacles and arrows of their position to make Singapore a very special place and, you know, I had the opportunity to know them a little bit and they were extraordinary people, but I think they were if you read Joseph Campbell's book . book a hero with a thousand faces you could almost say what the archetypal characteristics of great leaders are and there is this evolution and that is described in that book in which people with a sense of adventure and affection go out on their adventure and then in a mission and they succeed and they fail and they do it with other people and that the mission and the other people eventually become more important to them than themselves and then they start to get better in terms of seeing things differently, which I think is the The essence of what spirituality is spirituality, I don't mean religion, I mean the sense of connection with others and with the whole, and when that becomes more important to them than themselves, they become that's what What constitutes being a hero, and that's why people like Lee Kuan Yew and so on. people had those particular qualities and they let you know and they did what they did, so there are many, many many cases.

I mean, I'm saying that this man here, HR McMaster, is a hero to me and that's why I see him around me and I think it's those qualities that make a person a hero. Well, we have a few minutes left. You talked about connection in maudlin language. I could say that I feel more connected to you now and you have been very generous. I have shared your principles with us and as a token of our gratitude we thought we would share some of our principles with you so I thought it would be a thin book, it is actually almost as thick as yours so this is one of our GSBs. principles of many students here in the audience today oh great yes this is real this is real this is great great these are your principles these are on this map I want to take one of the things in the apt is part of the The application is a coach and a of the things it contains is that the trainer allows you to describe.

I'm in this situation, which principle is best for that situation, so since you don't want to accumulate principles, you want to look for the ones that are most appropriate and one of the most important things is that it allows you to put your principles and so you can take your principles and leave them on that coach. I'm going to be very interested. I think that's the most important thing. I think we're in an era where we're confused about principles and I don't think we spend enough time thinking about principles that we think about doing so much and maybe as religions have become less important and other things in the ones we don't think about. about that, so I think it's very valuable that you did it and I think it's a real pleasure, a great gift, thank you very much, I really appreciate it, very welcome inside, yeah, actually we're not done yet, you're not there yet ready.

The hook there is one more thing for the sake of radical truth and radical transparency. We need to clear up some rumors about you. Well, then I'm going to give you a series of statements and I want you to tell us if they are true or false, well, you played a fundamental role in the creation of the Chicken McNugget. I thought your devotion to knowing basic commodities led you to name your first child after a cow. True, when you were a child you caddied for Richard Nixon and the former king of England. right, who is the best golfer Richard Nixon actually uh and he wasn't a very good golfer.

I imagine he is in the water a lot. I see. Yes, the Beatles inspired you to start meditating and you still practice 50 years later. It is true and it is one of the most important. things, I think it's helped me a lot, you've committed to giving away more than half of your wealth over your lifetime, yes that's right, you fly exclusively with JetBlue out of loyalty to Joel, he was nagging me about it, so that's it a no, not yet, yes, more roots. You've worked for 44 years at Bridgewater but you've never been promoted. They demoted me.

Do you secretly wish you had gone to Stanford? No comment, ladies and gentlemen, a Yahoo politician.