Extra: Ray Dalio Full Interview

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Ray Dalio, Founder and Chief Investment Officer, Bridgewater Associates (Photo: Michael Wuertenberg/World Economic Forum)

What follows is a conversation with the founder and longtime C.E.O. of Bridgewater Associates, the biggest hedge fund in the world. It was recorded in October for the Freakonomics Radio series “The Secret Life of a C.E.O.

Stephen DUBNER: Hey, this is Stephen Dubner. Is that Ray?

Ray DALIO: Hey Stephen. Yeah, this is Ray Dalio.

DUBNER: So nice to talk to you, and thank you so much for coming in, and congratulations on the book.

DALIO: Thank you.

DUBNER: So let’s begin with literally saying your name and what you do.

DALIO: I’m Ray Dalio. I was the founder of Bridgewater Associates. I’m still the chief investment officer and chairman. And right now I’m trying to help other people be successful without me in whatever form they want to be successful.

DUBNER: Excellent. And Principles the book, Part 1, grew out of a non-book version that you published a while back. Did you set out to want to help people, or was that more of an internal working guide that you wanted to publish so that your employees could learn what you’re all about? In other words, did you intend for it to become a public proclamation?

DALIO: Oh no. Just the exact opposite. I didn’t want any public attention. In 2008, we anticipated the financial crisis by thinking differently and that got a lot of attention, and I was faced with the choice of letting it be misunderstood or put them out. And so we put them on a website. They were downloaded three and a half million times. I got a whole bunch of thank you’s for that, and now I’m at a stage of my life that is my transition.

I think that life exists in three big phases. In the first phase, you’re learning and you’re depending on others. You’re a kid. Second phase: you’re working, others are depending on you, and you’re trying to be successful. In the third phase and as you get into the third phase, the greatest joy you can have is to help others be successful. That gives them their abilities and it gives you the freedom. So 2017 I view as my transition year from the second phase of my life to the third phase of my life.

DUBNER: I know it’s relatively early then in the third phase, but how would you rank the actual satisfaction you are experiencing versus what you would have predicted as your satisfaction in this third phase?

DALIO: In that transition from the second to the third phase, it’s an unbelievable kick to help other people be successful. I think it almost instinctively changes. When you’re in that second phase it’s a kick to be successful, but there’s a greater kick. I’m loving it. To be able to help other people be successful — it’s a kick. There was a book, Memoirs of Hadrian; it was Hadrian speaking in his own words. He had conquered and he described that very well — “For me to go in there and fight another battle and be successful is just not the same kick.”

And it’s very interesting, because if you look at Joseph Campbell‘s Hero With a Thousand Faces, it’s almost exactly like that. There was a part of that book — maybe I’m answering too long, but anyway, my son gave me the book in 2014 — and he describes that phase of your life as “returning the boon.” In other words, you learn a lot of lessons in life and you want to help others be successful. And it’s a pleasure. It’s the greater pleasure than being successful yourself.  At least it feels that way for me.

DUBNER: So, a two-parter: Let me ask one first and I’ll hold off on the other. You’ve become famous for being not only analytical but self-analytical, and in a way, that’s what your management style is about and has really pioneered. But let me ask you to apply that to yourself right now. The window of time you’re looking at for this third phase for yourself is very short, so persuade me that this joy that you’re experiencing in phase three is not just the novelty of phase three and is actually the accomplishment that you’re feeling in phase three.

DALIO: Well, again, I don’t even know if it’s the accomplishment as much as I feel the need to convey it, and what other people do with it is fine. So it’s not just my principles. I just want to be clear. My aspiration here is to make clear how effective principled-level thinking in general is. I’ve just interviewed a number of remarkably successful people to try to have them bring out their principles, because principles are like recipes for success that have worked for people. And so there are a number of people who are very, very successful. Wouldn’t you like to know Elon Musk‘s principles? Wouldn’t you like to know Bill Gates‘s principles? Wouldn’t you like to know Einstein‘s principles?

Because they’re the recipes for success. And if one operates in a principled way — I hope we’ll get into what that means — but if one operates in a principled way, where you know your principles and you’re refining them and you’re clear about them, magical things happen. And I feel a responsibility to pass those things along and then let people do whatever they want with them.

DUBNER: Okay we’ll get very micro for a long time, I promise, but let’s start a little bit macro. When you look outside your firm — and even outside the financial services industry — which industries or realms do you see that do tend to operate according to their principles?

DALIO: Well I don’t know that I could describe it as a particular industry, but I think that what’s happening quite a bit is that the development of algorithms is requiring people to be very clear in specifying the equations. And that’s almost helping the development of algorithms. So let’s say you have a self-driving car, and now you’re having to make a choice of, “I will kill three people or I’m going to go over a cliff and I’m going to die,” or those types of things — that forces people to think through, “Okay, what would I do in that situation?” and become very, very explicit in that form of an algorithm. Let’s say an algorithm is nothing more than a principle, which is now put in to computerese rather than put into words. I think we’re coming down that path in a faster way.

Of course religions think about principles, but the thing about religions is that in many cases they come as packaged principles, and they come from somebody else and then you move them along. I think that principle-level thinking nowadays allows the individual to choose his own principles and to be clear about those principles and, in a sense, operate that way. Now different institutions and organizations are operating differently, so I couldn’t comment on the whole universe. But I think inevitably these things are happening, and I just want to make it clear what those things are: Algorithms will form and will help to force the clarity of principles. We are probably in a society that is going from principles that are given to us by others in a more prepackaged way, a society that doesn’t think adequately about principles, to one that I think will evolve to making one’s own principles clear.

DUBNER: Let me ask you a flip side of the previous question. When you look around the world for an area or environment or industry or institution where you see that there’s an awful lot of behavior, an awful lot of decisions being made not according to principles but rather expediency or emotion or self-dealing or whatever — where do you see that happening a lot in particular? And yes this is a leading question, because what I really want to ask you about is politics. I see politics as something where we as citizens would like nothing more than principled behavior — even if it’s a principle that we personally don’t agree with — and yet it feels as though we’re in a political moment where principles are not being applied. And I guess I’m curious about your take on that.

DALIO: I think that’s exactly right. I think it would be an unbelievable world, but a better place, if each person — particularly those who are in leadership positions — wrote down their principles and walked the talk. And then that we as a country are clear in what the principles are that bind us together, and what the principles are that separate us. So being clear about that. And then to have good “idea-meritocratic” ways of working ourselves through those disagreements. I think that that’s the problem. First, not having clear principles clearly stated. And second, not having idea-meritocratic decision making that lets you move past it. Let me explain quickly what I mean by idea-meritocratic decision making. It’s, of course, hoping that the best processes for producing the best ideas win out.

Okay, three things you need to do: First, you need to put your honest thoughts on the table for everybody to see with other people’s honest thoughts so they’re clear. Second, you need to have the ability and protocols for having thoughtful disagreement. In other words, work yourselves through disagreements to make better decisions, and by having principles and being clear about that, that helps that second step of having thoughtful disagreement and getting past those disagreements. And then third, if you have remaining disagreements, you need to have an idea-meritocratic way of getting past that. We call that believability-weighted decision making — that’s a whole other topic if you want to digress into it. 

But I think that’s been extremely powerful for us. And I think that as we’re entering a period in which we’re going to have a greater ability to have collective decision making because of the use of algorithms, and because also we can find out what everybody is like so easily. So I think that we’ll have to move in that direction. But if we don’t, we’re just going to be in our silos arguing and trying to kill each other.

DUBNER: You know, it’s funny — I read your book. I don’t know if you’ve thought about this or others have said this to you, but I read this as a little bit of an analog to Danny Kahneman‘s book, Thinking, Fast and Slow. Are you familiar with Danny and or his book?

DALIO: Yes, and it’s certainly the case that one thing is totally in common, and the reality is that when we’re thinking fast, we’re making a lot of decisions that come at a very fast pace. It’s like you can catch a fly ball and we can have this type of conversation without slowing down and making decisions. And then on the other hand, if you pause and you reflect and you think, “What are my criteria for making a decision?” and you could write those down, first in words and then words can be turned into algorithms, you can then make better decisions. And it’s so important for that — let’s call it thinking slowly, and articulating. That’s a very powerful thing.

DUBNER: I have to ask you, you’re, what, late 60’s, mid 60’s?

DALIO: 68.

DUBNER: Okay, and you weren’t a math guy per se. Right, you’ve learned as you went, I gather? Correct?

DALIO: Yeah.

DUBNER: Okay. Was your conversion to the power and the beauty of the algorithm gradual? Were you a little reluctant? Because you sound like a true believer in a way that many people even these days are not.

DALIO: Well, first of all, artificial intelligence began in 1953, that was the first time they did it and the ability to express yourself — there was econometric thinking and there was all sorts of ways of having one’s ability to express oneself. In my case — when I stumbled on it and then it was a radical key to success — I stumbled on it because every time I would make a trade in the markets, just as self-discipline I wrote down the criteria so when I would close the trade I would see how it worked in the past. I found that I was able to take that same criteria and then go back in time and see how that decision making would have worked. I’ve found that was unbelievable. Then I found that by expressing it in that algorithm — an algorithm is just a language, and so by working with people to get the language right, it’s not a problem. And then I was able to collect data as it was happening, on a real-time basis, and make the decisions. And then I found that it just radically improved the decision making, because I was operating in parallel with the computer, like playing chess — creating a computer chess game and that reconciliation. And I discovered over a period of time that the computer could make decisions better than I could because it could be more comprehensive. It could be quicker. It was less emotional. Anyway, it had all those benefits and it ended up compounding. So that has existed for 25 years, and of course as the technology and everything improves, you get better and better.

DUBNER: One more question back to politics for a second and then we’ll move on mostly to Bridgewater. So Jim Comey worked at Bridgewater for a while, and then more recently when he was fired as head of the F.B.I. you publicly defended him, calling him a man of integrity and a hero. You wrote that he is “a man of high principles operating in a low principles environment.” That is a disparity that a lot of people are going to run into. I guess it’s better to be a person of high principles in a low— than vice versa but I don’t know. Can you talk about the difficulty — forget about financial services or investing, even forget about government — but what do you do? What do you advise to people who do aspire to having a set of principles — whether they’re business, personal, political, whatever — and yet find that the environment in which they operate doesn’t appreciate, need, et cetera, them?

DALIO: You’re just describing a situation that helps one know one’s principles when things are at odds. The question is, “What do you do when they’re at odds?” So let’s say you’re a principle person and now you’re in an environment that is not principled. That will force a question, and that’s where principles come from. Which of those things are more important to you? In my opinion, as you’re dealing with it — I couldn’t be in an environment in which I didn’t have the right to speak up, the right to work things through in an idea-meritocratic way, I couldn’t do that. Now somebody else will say, “No. My principle is to serve or to have the particular authority to do that.” And so they would have, then, an overarching principle that would be a refined principle that would be different from my principle. My point is that by experiencing life and experiencing these things that are at odds and then reflecting in a high-quality way on that and your choices — that is the means by which you refine your principles.

DUBNER: One story from the ancient past — I just want to hear it in your voice because it’s so entertaining. Can you tell me briefly how you helped McDonald’s launch the McNugget?

DALIO: Well, okay — I graduated from business school in 1973, and I traded commodities, and I love to trade commodities, and I love the mechanics of it. There was something about — you can grow a chicken and it’s so many pounds of this and that that makes the chicken come around and blah blah blah. And I had two clients at the time: McDonald’s and a chicken producer. And McDonald’s wanted to come out with the McNuggets. But there was a lot of volatility in the chicken market at that time and they were worried that if they set a menu price and the price of chicken then went through the roof that they would get squeezed or they’d have to raise the prices and it would be unstable.

DUBNER: And were they worried that their introduction of the product was going to spike demand or spike price because of their action because they’re that big? Or orthogonal to that.

DALIO: They were just worried that the cost of the chicken would go up. But there was not a way for them to hedge that, because there was not an adequate chicken market. But the producer of the chickens — since a chicken is mostly a little chick and then it has a lot of grain that’s added, and you could use the futures market — what I did is I showed him how we can hedge his cost and that he could provide a fixed price to McDonald’s for chicken McNuggets.

DUBNER: He could hedge his costs by buying corn or buying or selling corn and soybean futures then, is that the idea?

DALIO: Yeah, corn and soybean meal futures because that was where his volatility was. He could lock it through. And so by doing that we engineered that. I don’t know how interesting it is, but it was an engineering exercise.

DUBNER: Well, it’s also a reminder that, these days people hear hedge funds and what they think of are, “Oh, those are the kind of ultra-exclusive-ish or good investment vehicles.” In the old days, however, hedging was a real thing as you’re talking about now.

DALIO: Forget about the term hedge fund. Everybody does all different things and they call it a hedge fund. It’s almost like saying it’s a mutual fund and everybody doing all different things. So I think it’s very confusing what a hedge fund even is.

DUBNER: In the old days you used to be a little bit on the arrogant side, didn’t you?

DALIO: Oh yeah. And then I had my ass kicked in enough times. It was a time — I remember the moment in late 1980, ‘81 — I had calculated that American banks had loaned to foreign countries a lot more money than those countries are going to be able to pay, and that we were going to have this terrible debt crisis and so on.

DUBNER: And you were right about all that. Correct in that part?

DALIO: I was right about all that, but the markets are a different story. The only good thing that counts is whether you’re right in the markets, and so because I had anticipated this and others didn’t, I was on Wall Street Week, I testified in Congress, and I got all this type of attention. And right at the exact bottom — when Mexico defaulted in August, 1982 — I said, “Okay, economic collapse.” That was the exact bottom of the stock market for I don’t know how many years. And I was so wrong I had to let clients go. I lost money. I got so broke that I had to borrow $4,000 from my dad. And then letting go people who were like extended family — and it was literally down to me.

That was a very painful experience, but it was one of the best experiences that happened in my life, because it changed my perspective from thinking, “I’m right,” to asking myself, “How do I know I’m right?” And that began the whole process of trying to find the smartest people I can find who disagree with me and be curious about what they think. To create a culture in which there is independent thinking — and you need independent thinking in the markets or in being an entrepreneur. You’re betting against the consensus. And there’s a high probability that you’re going to be wrong. And to have independent thinkers who know how to have thoughtful disagreement to raise the probabilities of being right, that’s when the light bulb went off.

I think the greatest tragedy of mankind — or certainly one of them — is people needlessly holding wrong opinions in their heads which they could so easily put out there and stress test and raise their probabilities of being right, but they don’t do it for various reasons. So it gave me the open-mindedness that I needed to balance with my audacity.

DUBNER: When you say that people don’t do that, that they’re not willing to expose their opinions to outside empirical inspection at all — when I hear that, the question I think is, well, why? Why don’t people do that? Are our egos that fragile? Are we worried about our reputations? I’m curious what you see as the reason for why people don’t expose — is that something beyond just ego and reputation?

DALIO: Well, I haven’t gone through it from 1982 or so to have the idea-meritocracy. It’s been a long journey, speaking to neuroscientists, speaking to psychologists, and so on. And there were two reasons for this. Overwhelmingly: what I’ll call the ego barrier and the blind spot barrier.

The ego barrier is that notion that we have two brains operating — our upper level us that’s thoughtful and wants to make the right decisions, and then our emotional brains that also hijack us. And we have a challenge of being able to deal with our own imperfections and our own weaknesses and our own being wrong. And our society reinforces that. It’s reinforced in schools about “Okay, you got the grades right, you’re right, you’re right, you’re right, you’re right.” It doesn’t reinforce the notion of failure and learning failures and that whole experience. So that’s the ego barrier. Why is it that people can’t be totally straight with each other? Because they’re all always so worried about what I call their lower level them rather than their upper level them. But that’s part of it.

The second being the blind spot barrier. What I learned is that everybody sees things differently — literally — through a lot of experimentation that we do where we see simultaneously how people see things. It’s remarkable how people actually see things. Some people will see the big picture, some people will see detail, and some people will see all different things. And what happens is, because you can only see in one, let’s call it seeing spectrum, you only are seeing that particular piece. And you think that that’s the right piece. And when you start to be able to see things through everybody’s eyes — then the world lights up and it’s a different perspective.

In other words, giving up the attachment to what’s in one’s brains as being the only thing and then being able to move beyond that and seeing things in other’s eyes and then transcending that so that we’re all above all these different ways of thinking. And saying, “Okay, given all these different ways of thinking, how do we find out what the best answer is? Knowing that we don’t know necessarily that the one in our heads is the right one?” And that’s a good idea-meritocracy.

DUBNER: So as a leader, in that case, when you understand that a lot of people might have a lot of different perceptions of a given scenario. Do you feel it’s more your job or maybe more important to try to get them to see the same things essentially, to reach a consensus vision of things? Or is it a value, is it an asset to have all those different views and it’s your job to collate all of them so you can see the big picture and then decide?

DALIO: First of all, I view it more collectively than you’re describing, because it almost sounds like here’s a boss who is saying, “What do I want to do?” I’m saying, in a sense, I want an idea-meritocracy that has a means of agreeing on those things. So what I’m saying is, “Okay, now when faced with this thing that we see that all these different points of view exist, then let’s collectively determine the rules of how to work ourselves through that.” What would we think is the best possible way of working ourselves through that so that we make the best decision?

And so we’ve come up with this process of — I’ll describe — believability-weighted decision making and so on, which has to do with making clear criteria of knowing who is good at what and who is bad at what in all these different dimensions that are agreed upon processes for determining who’s good at what and who’s bad at what. And then when we deal with that collective decision making, to be able to have clear protocols that take us to the best answer, assuming that everybody — a lot of people who are smart — are going to see things differently. Rather than wrestling with each other. A problem in most organizations and most interpersonal relationships, I think, is that they don’t have a way of getting past what stubbornly is in their head and going to operate idea-meritocratically.

DUBNER: And when you say they don’t have a way, that’s because there is literally not a preexisting set of principles, or at least agreements, about how we’re going to deal with differing views?

DALIO: Yes. And then even more fundamental than that — if you and I had a relationship, let’s establish the ground rules. Can we have thoughtful disagreement and be clear? Can I put those things on there? Do we have a process when we have a disagreement? Do we have an agreed upon process for resolving that disagreement? At a very basic level, it might be that we have somebody who helps to arbitrate. We mutually agree that we’ll bring in somebody and then they’ll say, “Okay, I think that’d be a fair judgement. Now, let’s work through that.” We have, by establishing clear protocols of “What’s your relationship like? What are the rules of that? How are you going to be with each other?” that take you from avoiding disagreement to appreciating it and moving beyond it so that you’re held together. That’s good. Writing principles also helps, of course, because it makes clear what you’re making decisions on. In other words, if I know your principles, and you know my principles, and we agree on principles of how we’re going to operate with each other, it becomes fantastic, and you have that idea-meritocratic decision making.

DUBNER: Let me let me stay on the macro. I promise we’ll get micro because there’s a lot I want to know about the truthfulness and transparency and the idea-meritocracy and so on. But let me just step back for one minute. So Bridgewater has been one of the most successful hedge funds in history. You are its founder; you were its C.E.O. for many years. You’re still a Co-C.I.O. You’re worth a reported $17 billion. So that’s a lot of success. Additionally, you, Ray Dalio, have this set of principles that you live and work by. So it would be pretty natural to conclude that you and/or your principles are responsible for Bridgewater’s success. So Ray, how convinced are you that that is the case and how can you tell?

DALIO: I want to be clear: What has made me successful is not me. It is these recipes, these principles that I’ve discovered over a period of time. And what’s made Bridgewater successful is those recipes, because if it was me-centered then we wouldn’t have an idea-meritocratic process and you could only get a certain amount of leverage out of one person. It’s a power of good principles, good recipes. So, I don’t know, you could take whoever — you take Albert Einstein or XYZ — if he’s following a certain set of principles… In my case, anybody can follow the particular principles that I’m describing. It’s just idea-meritocratic decision making.

Because the thing that you have to understand is that what is in you is only a small percentage of what you need. Okay? When you start to realize that what’s out there in the world of resources and different thoughts that you can have and how you can triangulate — in almost any issue you can get people who are are better and you do this triangulation process. And it’s fantastic. It enhances learning and it improves decision making. So that’s what it is. And I’m asking: Is that logical? Does that make sense? I mean I’ll ask you. Let me turn the question. Isn’t that right? Isn’t that logical? Doesn’t that approach make sense?

DUBNER: So, if you were to ask me that — you did ask me the question, so I’ll answer it. I would say that in almost any circumstance where empiricism carries the day, then the answer is yes. And the financial services industry is one where I would argue maybe more than almost any —

DALIO: It has nothing to do with the financial services. I’m asking you — let me clarify my question to you. Isn’t the best thinking on almost anything — you have a certain amount of thinking in your head, but there’s a world out there with the smartest people, and if you got the smartest people and you take your thoughts and you triangulate with the other smartest people and you make good collective decision making. Don’t you think that that’s a better approach, even for the best decision maker?

DUBNER: Yes. With a caveat. And the caveat is this: there are some kinds of brilliant people who are brilliant on a lot of dimensions but really bad in others. I’ll give you an example.

DALIO: But I’m saying, “Wouldn’t that person be better if they did that?” There’s a graph in my book that shows what an individual’s capacities to make decisions are on one axis and a degree of humility on the other axis. The most wonderful thing is to be able to have contact with the most brilliant people in the world — I would say with almost universal means of success that they’re great on both spectrums. Would you disagree with that?

DUBNER: I wouldn’t disagree with that at all.

DALIO: Thank you.

DUBNER: But I still want to tell you my caveat. And it’s simply this: For instance, if you look back 50 or 80 years ago, you could say that economists, academic economists, Nobel Prize winning level economists, were among the most brilliant people we had in this country. And yet the field of economics — while it advanced on some dimensions pretty well, it also really didn’t move forward or well on some others — both on the macro and micro level. And I would say that was because — this is just one example — the field of economics, for many years, did not incorporate the fact that humans don’t make decisions generally on a one-to-one level the way that their models would predict. So that’s an example where huge intelligence is valuable, but you need to bring in a different sort of intelligence sometimes to complete the picture.

DALIO: I don’t think that’s any disagreement. Let’s put that in my terms. My terms are that there is an upper level you and a lower level you. And in the language that you’re speaking, if you believe that you can make decisions only by assuming that people are rational, when they’re not totally rational, that’s dumb. And so if you’re talking about that old dumb economics where you’re assuming everybody is rational, then, okay that is dumb. And therefore we have to accept the fact that there are two uses, and that lower level has a big effect on behavior.

And that doesn’t diminish — it’s not even an equivocation to the thing we said before. Because if we take that and we said, “Okay, now let me assume that either of those things can be going on: that my subliminal thing is making me make the bad decisions and my best process is to go out there and find the most brilliant people to triangulate with and stress test my decision so that I’m going to make a better—,” won’t I make better decisions than if I didn’t do that?

DUBNER: I agree entirely. Although I feel that I’ve now disqualified myself from ever working at Bridgewater, because I feel I didn’t really present my challenge well. I blew it. I had my chance.

DALIO: It’s whether we have a good time together, right? We’re having a good time together, I think.

DUBNER: All right, so let me ask you: You’ve become famous, I would say, for encouraging what’s known as radical transparency and radical truthfulness — both of which are in pursuit of an idea-meritocracy. Give me just one concrete example — a micro example or story — to illustrate how either one of those — transparency or truthfulness — works in a daily encounter at Bridgewater.

DALIO: I’ll start with the truthfulness. If you’re not being clear and truthful about what you’re thinking, then in my opinion what you’re doing is being very inefficient, because everybody doesn’t know what everybody else is really thinking, and you’re probably reducing your probabilities of getting out what is actually true and how to deal with it. So it’s very inefficient and it’s an unethical position, because if I’m making judgments in my head about you or vice versa and I’m not allowing you to be part of that decision and understand the criteria, one of the most basic things of justice is the right to face one’s accuser. And to be able to have that conversation is what I will call integrity, not having duality. And so that’s what I think about the radical truthfulness. It’s inefficient. It’s unethical and so on. And then the first question is, “Okay, do you agree with that now?” And then we’ll get to radical transparency in a second. Do you agree with that?

DUBNER: I do agree with that. I agree with that on the rational and empirical level, but I can immediately foresee where there might be a whole lot of ingrained or emotional barriers to overcome.

DALIO: We agree on that thing. And then when you start to see that it would produce better outcomes for you and better outcomes for your organization, then you start to face a choice. And how will you deal with that choice? My experience has been that if you explain it and you also ask the other person, “Do you want me to tell you what I think, or do you want me to hold that back? Do you want to be free to tell me what you think, and can we work it through together?” The intellectual brain will — our upper level us will choose that. And when we realize that there’s a struggle within ourselves between our upper level and our lower level — which can do us that harm — we’ll operate in a better way. That’s been my experience. So that’s what that is.

So I would say, if we’re going to have a relationship — and it’s not just a company relationship — if I’m having a relationship with anybody, I want to know that I could be that way with them. That’s important to me. Now it doesn’t have to be to you. You can make your choices. But I think we’re all going to be better off, generally speaking, if we can get over those ego barriers or that painfulness moment of things like harsh realities. Do we want to deal with our realities or do we want to avoid looking at them?

DUBNER: So the empirical part of me, when I hear that explanation, I think, “Man, Ray Dalio, you are the boss. That is so good and so useful and so fresh to hear.” And I could see how that would be hugely valuable, whether in a firm, a government institution, or your family. Right? On the other hand, I can imagine that a lot of people hearing you say that are just scared out of their wits, thinking, “There is no way I want that kind of conversation at work or home or anywhere.” So what do you do when you encounter that baseline fear?

DALIO: I’m going to tell you then — I’m speaking to you out there who are the ones who are reacting that way — it’s an exercise, that, with practice, you can have it. And you go through a process. We call it getting to the other side. You come and you say, “I intellectually want to be that way with each other for that benefit.” Then you go through the experience, and it takes about 18 months, typically, through that experience. You go into it and you say, “Oh, it’s uncomfortable,” and so on. And then, while that’s happening, your upper level you is wrestling with your lower level you. You say, Is the process fair? It’s a fair process, and you believe it’s fair. You see that struggle and you intellectually do it. And if you do that, even in an ideal community that reinforces that behavior, as you go through it, it becomes increasingly comfortable and uncomfortable and operating the other way.

Because the other way — we watch this — some people can’t make it through. I would say maybe a third of the people are gone in that 18 month period. But the ones who go through it can’t go back to operating that other way, because they go into to an organization and they look at everybody and they say, “I know all the politics that are going on behind the scenes. I can’t speak up. I can’t have other people be straight with me. I can’t do that. I just can’t go back into that kind of an environment.” And when they’re in that state where they can’t go back into the other environment, they have made it to the other side, so to speak. And this is the healthy side to be in. Because it wins. It’s not just healthy for individual development. It makes the organization better. If you can have idea-meritocratic decision making, it makes individuals better, makes the organization better, and it’s a lot fairer.

DUBNER: A lot of your work at Bridgewater has been about individual development. It’s about changing the way people think and behave. Did you feel that that was necessary to attain the kind of business success you wanted? Or was that a kind of add-on that you felt would complement the work environment?

DALIO: It’s fundamental. It has nothing to do with business. It’s just how we’re going to be with each other and how am I going to face things. Things like, “Do I wanna know the harsh realities? Do I want to know my weaknesses?”

DUBNER: But do you not respect people who don’t — or, I shouldn’t say that, I shouldn’t put those words in your mouth. How do you assess, therefore, people who don’t want to know the harsh reality, don’t want that candid assessment?

DALIO: Well, first, it’s their decision. I just want them to understand the consequences of their decision. Look, if they want to smoke, that’s their decision. If they want to do whatever it is, it’s their decision. Everyone has the right to make their own preferences. That’s the individual decision making. Just as long as they understand that that’s what it is and that’s the consequences. And you pick your choice. But do it with your upper level self thinking like, “What do I want my life to be?” And try to make those choices that way, is something I’d recommend.

DUBNER: These principles that you’re talking about, how generalizable do you believe they are for firms and institutions all across America or all across the world?

DALIO: I think it is true for all organizations that these principles of — what is the circle of decision makers? And it may end up being that — in the country or an economy or whatever is — that a wide group of decision makers are operating that idea-meritocractically and the rest are kind of following instructions. So it becomes a matter of the width of that, the scope of that — is everybody in the circle? That’ll be a question that people have got to answer. The reason I wanted radical transparency — because we forgot to get back to that, but let’s get that — is because if I let everybody see everything — in other words, we literally record all conversations, let everybody see everything —

DUBNER: I know some people will have gotten that as you said it, but you said it pretty fast. You record just about all conversations at Bridgewater, and then those transcripts are available for anyone, yes?

DALIO: No, the actual tapes of them are available for anybody. I found this to be an invaluable tool.

DUBNER: Before we move on to the result of that — I can’t help but want to know about how that went over when you first — I want to know where you first got that idea and what it was like when you first introduced it at Bridgewater. Because that’s so radical. I mean Nixon did it. But he was an outlier, let’s say.

DALIO: Radical transparency allows everybody who is in that group to understand what is really going on so you can’t have spin. And then you have questions. And I found that I needed that, because people are looking at me and giving feedback — I need the feedback. Everybody needs that feedback. You can only have an idea-meritocracy as wide as people get to see things for themselves. Otherwise you’re going to get spin. Otherwise somebody comes out of a meeting, one person describes it one way, another person describes it another way. And you get the spin. Instead, it’s okay to watch people wrestle with decisions. It’s okay to watch people make mistakes. You’ll see everybody screw things up and it’s okay — that’s what humanity is like. And you see how people wrestle with that and improve and deal with it. So transparency is great.

And then every one of those, then, we find out, is an experience in which principles are being examined. So if you go through a case like having to fire somebody. Okay, now let’s have that conversation. Let’s look at that conversation. Okay, was that handled well, or was that handled poorly? And what are the principles behind how it was handled? So that you could say, “Ah, when faced with this choice, that may be very painful.” It’s painful for the person who’s being fired, and it’s painful for the person who’s firing them. And then they’re faced with another choice, which is the other pain that would be if they didn’t do that. And so by working oneself through those things — and you do it transparently — it helps to maintain quality control. It helps to make it much more inclusive so everybody sees what’s really going on without spin. And it helps to really think in a better principled way. So I found it invaluable.

DUBNER: Can you talk for a second about you as the boss either calling yourself out — maybe raising your hand and saying, “Man, I’m underperforming here.” Obviously, you’re being assessed all the time and everybody’s encouraged to do that. But has there ever been a time where you said, “You know what, I’m not executing at the level that I should be, and I need either help or I need a discussion about this.” Has that ever happened?

DALIO: Yes, I do that all the time because I’ve got strengths and weaknesses. And what’s most helpful to other people is people who catch me and see me do that type of thing, because sometimes — let’s say, for example, I can answer questions too long or I could be inarticulate or I can maybe not communicate with the person whose mind works differently than mine in a certain level or a whole bunch of other things. Because individuals’ minds work differently and everybody sees things differently, we all need other people to help point those things out. So I’ll raise them, but I find particular value when other people point it out, because I get to see through other people’s eyes. So isn’t that a great thing when you can see through other people’s eyes rather than not see through other people’s eyes? Doesn’t that make the organization better? The individuals better?

DUBNER: Are you often surprised by your colleagues’ assessments of you in a given situation?

DALIO: You know, I’m often surprised, but not very surprised anymore, because I’ve learned to not be surprised when those things happen.

DUBNER: In other words, you now know that the perception may not match up to the —

DALIO: I may not know — like, I could be in a meeting and I can think, “Oh, I was clear,” for example, and I could come out of that meeting and they could say, “Nope, you were absolutely so screwed up in terms of this particular thing.” And then I would say, “Yes, okay, now I see it. I didn’t see it at the time,” and then, “Okay, now I know,” because we collect the patterns of these things. And then I could see it over and over and over. By watching the data — because we’re very data driven about each person’s behavior — by watching the data, I will know that I will regularly have that particular type of problem, then it helps me, because I’ll go into the next meeting and I’ll be cautious about it. So it helps me improve. But in any case, yeah, that happens a fair amount. But I know my weaknesses a lot better than I did before and what to look out for, and people help me look out for it.

DUBNER: And what does it feel like when you get that corrective data? Are you grateful? Are you sheepish?

DALIO: Oh, it’s so great! What I’m talking here is rewiring our connections. Habit is one of the most important things. I’m interested in neuroscience. They say it comes from the basal ganglia which is in the old lizard part of the brain and it’s the thing that we follow all the time. And so my attitude has changed. My attitude even about mistakes has changed, because I start to view them as puzzles that will give me gems — in other words, I make a mistake where I get that kind of feedback and I say, “Oh, okay, the puzzle is what would I do about that the next time it comes along so I learn a lesson.” And the gem I get is a principle that I write down and say, “Okay, now I’m going to do that when the next one comes along,” and then I have to do it repeatedly. Like if I’m learning to ski and they say, “Put your weight on the downhill,” because that’s the thing to do. Okay, I gotta do it and do it until I internalize it. And that’s the way it works for me.

DUBNER: Can you give an example of one change that you made that was so difficult or counterintuitive that it really took a long time?

DALIO: Well, I guess the biggest challenge was in — I think it was 1993. I got together a group. I was being given my annual review by these people. So they gathered me together —

DUBNER: Colleagues at your firm, right? Not outside?

DALIO: Colleagues at my firm.

DUBNER: And how far down the ladder, if I may, was the lowest on the ladder? I mean was it well senior?

DALIO: Well the reviews are done by anybody you have contact with. So it’s a hierarchical thing, but this was a long time ago. And then these people, the senior partners said, “You’re making people uncomfortable. You’re demoralizing them with your straightforwardness, and if you bring up their problems and their weakness, you’re making them feel bad.” And I said to myself, “Whoa, I don’t want to do that to people.” And then I wrestle with the question.

So it put me in one of those junctures: Should I not be totally straightforward and have this radical transparency, or should we be straightforward, and how do we do it? And I wrestled with that particular question. And then I realized, “Okay, well I should talk to them about it.” In other words, we sat down and talked to each of the people. I said, “Gee, I didn’t know I was having that effect. Why didn’t you let me know? I don’t want to have that effect.” And then we had a good conversation of back and forth and then we agreed on how we would be with each other. And that started to then encourage me more to write down the principles and then together work with other people to try to say, “Okay, are we operating together according to those principles that make sense?”

And you could hear a lot of those principles and — like you point out — a lot of those principles, the radical transparency and that radical straightforwardness, can be uncomfortable. So by us working ourselves through that, we were able to operate differently than what would be instinctive. But it was one of those journeys. That’s the most terrible thing. That’s the most difficult thing.

DUBNER: The most difficult is when you find out? Not just the finding out that you’ve been doing something —

DALIO: The finding out is great. Finding out is great. The reason I’m saying that is if you’re making decisions, if you have a feedback loop, you’re going to want to change. in my case, I know if I’m making decisions in the market and I’ll either get electric shocks or pieces of candy, and rewards and punishments, what happens is, when you have mistakes, you realize that the electric shocks you want to get done with and you move that along. And in other organizations, if you’re having that type of clarity in whatever it is so that you’re working through, it’s going to change your desired behavior. So you like hearing it. Instinctually. I like hearing it. And I go calmly and I think about that. I think also maybe meditation has helped me a lot.

DUBNER: Ahah. You’ve meditated for a long time, yeah?

DALIO: Yeah. And I’ve also found that it’s helped a lot of other people a lot, because it gives them a calmness and an equanimity and almost a detachment from the ego thing so that when you come at it, you say, “Oh, is that what it is?” And in either case, I don’t know how much it comes from meditation. It comes from habit. There are lots of people who don’t meditate at Bridgewater and do it from habit. But it is that moment of, “Hm, is that true? How do I find out if it’s true?” And if it’s true, that’s where the real gem comes from, because that allows me to be better, and if I’m not embracing it then obviously I’m going to never improve, never change a thing. I’m going to keep banging my head against the wall. So I love hearing it. And then my saying that it was difficult or it has been the greatest difficulty, what I meant is getting people comfortable, being totally, radically truthful and radical transparency.

So just let me clarify in one sentence what Bridgewater is, or what I believe the best way of operating is. Okay? An idea-meritocracy in which the goals are meaningful work and meaningful relationships — they’re equally important and they’re self-reinforcing, they’re mutually reinforcing — so, an idea-meritocracy with meaningful work and meaningful relationships through radical truthfulness and radical transparency. I think that’s the magic formula for success, because when people know that you care about them — in other words, genuinely — let’s call it tough love. I think back to, I was growing up and Vince Lombardi‘s football team. They were winners. He pushed them, and he was tough, but there was a lot of caring and love of being great together. And if you have that meaningful relationship in which it’s very clear, not only does it help the performance and the being tougher along those lines, it provides a reward in and of itself.

When I look back on whatever my past has been and the successes, my greatest rewards have been the people and the relationships that I’ve had. The money has been an accident. I mean, it’s a good accident, but I happened to be playing a game that I love — that could be playing chess — but the relationships have been the most rewarding. So to be able to be both successful at the work and be able to be successful at the relationships and have those things mutually reinforce, and to do it through radical truthfulness with each other and radical transparency is a magic formula. In many ways it works for us. And it’s explained in greater depth in the book.

DUBNER: Quick question that I thought of when you brought up Lombardi: That sounded like well-deserved pride in a fellow Italian. You changed your name at some point; you shortened it a little bit. Is that true?

DALIO: Yeah. And, by the way, my admiration for Vince Lombardi has nothing to do with the fact that he’s a paisan.

DUBNER: I admire him and I’m not Italian.

DALIO: My last name was Dallolio. D-A-L-L-O-L-I-O. And when I was in I think a freshman in college, I talked to my family and I said, “Boy, that’s a mouthful.” And I took out a syllable, but I kept it Italian, because that was my heritage.

DUBNER: What’d your folks think? Were they okay with it?

DALIO: My dad said, “You’re so right.” I mean he had to wrestle around with D-A-L-L-O-L-I-O, Dallolio.

DUBNER: And he was a musician so he had a public profile. He dealt with his name being misspelled and mispronounced all the time I gather, yeah?

DALIO: Well yeah. And actually when he was dealing with others who didn’t know him well, he would actually use Mo Dale. So his first name was Marino, and then they would call him Dale.

DUBNER: So in appreciation of your principles and in pursuit of radical transparency myself, I’m curious to know if you could give anything for me about this conversation. So I say I love feedback. This show is really all about looking at data and looking at getting real, realistic feedback to help people improve their decision making, their lives, and so on. So this is a rare opportunity for me to have somebody on the other line who I feel — I’d be an idiot not to ask you to tell me some things based on this conversation we’ve been having that you think I could do better on. Things I should think about differently. Maybe I should interrupt a lot less; maybe I should shut up right now.

DALIO: No. So I’ll tell you, I think that you did an unbelievably fantastic job of asking questions, understanding, doing the back and forth terrifically within the particular timeframe. And then one thing that you might think about doing is making that where I’m asking you some questions and relate it, you know — that’s just something to think about. But let’s say if I was probing you on that and pulling out where do you agree, where do you disagree so that we could actually work things through to find out what is overlapping in terms of the real agreement and what isn’t a disagreement. I don’t think we’ve had adequate thoughtful disagreement in the conversation.

DUBNER: That is so interesting, in part because I grew up and trained as a journalist, and even though I’m a little bit more, let’s say, activist, and I speak my mind a fair amount, I still essentially feel that my job here is to be the proxy of the listener and to have a certain respectful attitude in that I’ll ask you a question, but it’s not my job really to tell you what I think about it. But it’s interesting that you’re saying from the other chair you want to hear what somebody actually thinks so you can engage more deeply.

DALIO: Well, first of all, you’re such a great professional doing what you do. It would be totally arrogant for me to tell you what chair to sit in and — you just asked the question. So I’d ask your listeners: would they like that or not? Just a thought to experiment with. But of course I’d be pulling you out, but you’d gain something from it. It would be something that’s interesting, anyway, for you to consider, because let’s say I’m turning the thing and I say, “Okay, let me reverse and we can play this game a little bit.” So, do you agree with what I said? Or what is it that you disagree with what I said? Is this way of operating a better way of operating, and then why doesn’t the world operate this way? Or are you just for your readers accepting this and going on, and so let me just turn that question to you just to see what you think.

DUBNER: It’s so interesting, because you’re doing to this format, this journalistic-ish conversation, you’re doing to this format what you did to the format of basically office structure, which is you’re busting it up and flipping it on its head by saying, “No no no, the format doesn’t have to be the one person asks the other the questions and maybe kind of parries a little bit or challenges a little bit.” But actually, the person being asked the questions — it’s incumbent upon them, or at least it would be useful for them to turn it into a conversation instead of what now strikes me — You’ve basically just invalidated the last seven years of work I’ve done, Ray, because basically I always think of this show as being truly conversational, but I realize now it’s kind of a replica of a conversation.

DALIO: Okay so now go on and answer my questions.

DUBNER: All right. Give me give me a couple of whatever you want to ask me.

DALIO: Well, I’ll just repeat the questions. Okay, so I described a way of being that’s an unusual way of being that seems to make for better decisions and that worked for me. So now you’ve heard it. By and large, does it make sense to you? Do you think that that’s logical? Do you think the answer is a question? Without getting first too tweaky about it, this is an alternative way of being. What do you think about this alternative way of being? Sensible? Not sensible? What do you like about it? What don’t you like about it? Tell me. Critique it.

DUBNER: I think it’s very sensible. I think it’s very logical. And I think that, even though I would probably put myself on a scale much closer to your end of things than average, it’s still scary. And it’s scary because most of us, I believe — Look, you’ve built an ecosystem with a language and a mode of behavior that, as you said yourself, it takes people a long time to acclimate to. I think in most ecosystems and most modes of behavior that most of us encounter every day — whether it’s in our work or our families — the conversation is so different. The rewards and punishments are so different for transparency and honesty, that it’s scary to think about engaging with it. So while I hear what you’re saying and I nod and I applaud and I actually cheer, I think, “Am I willing and able to actually adopt some more of this in my life, professional or personal?” Honestly, I don’t know.

DALIO: So if you were a partner of mine I would say, “I hear you. I understand it’s scary. So let’s together go through it in a way where we agree it’s logically the better way to be. And there’s really nothing to be scared about. You’re not going to die. You’re not going to get beat up. Okay? You’re going to encounter something different. You’re going to encounter your upper level you reflecting on your lower level you. It’s going to be an interesting experience. I guarantee: an interesting experience. So be adventurous; go into it. You won’t get hurt. If you don’t like it, you get out of the water.”

DUBNER: Can I have a pain button?

DALIO: Yes, that helps.

DUBNER: Can you explain the pain button for those who haven’t read your book yet?

DALIO: Sure. I have a saying that I believe captures progress. “Pain + Reflection = Progress.” Because if you’re having pain, it’s probably a signal that you wouldn’t want to have that thing happen to you. If you slow yourself down and you reflect in a quality way, “What is that reality, how do I deal with that reality?” and you come over your principles and so on, you will learn, you will make progress. If you don’t reflect and you have a lot of pain, you’re not going to learn. Okay.

So as we’re going through this pain button — it’s just an app that whenever you have pain, you push the pain button and it makes it very easy to describe what that pain is. It shows the type of pain it has and it shows who may be who you’re having pain with, or the circumstances — but you capture it at the moment. You don’t reflect that then. Then as time passes — because you’ve captured it and now you’re in a state of mind that allows you to reflect better — you can then reflect on that. Now the question is, “Okay, would you wanted to have done something different? Who should have done something different?” So you reflect. You write that reflection down, and that ideally should include an action you take.

For example, if that person keeps bothering you and causing you a lot of pain, or that situation keeps bothering you and causing pain, then what are you going to do about it? Are you going to speak to that person? And then what happens is it tracks you. So it has these little dials that shows the types of pain that you’re having, and it shows the sources of those pains, and it shows whether those pains are going down or not. And it shows whether you’re adhering to the things that you said you would do or not. And so it provides a biofeedback that allows you to connect what you’re experiencing to your actions and how you’re dealing with things to produce better results.

DUBNER: Excellent. I know we’re already over time. Can I ask you one more question or do you need to go?

DALIO: No. I’m good.

DUBNER: Great. Just one question about the most recent years at Bridgewater. I’d love you to talk for just a second, Ray, about when you stepped down as C.E.O. a few years ago and installed a new C.E.O. but then had to step back in as temporary co-C.E.O. I’m just curious what happened? What did you miss? Did you miss anything? I know the post-life of the C.E.O. — especially when they stay on in the firm — I’m guessing is always tricky? But I’d love to just hear your perspective on that.

DALIO: Well, first of all, I know that I don’t know how anything is going to go until I actually experience it. I have a saying: if you haven’t done it three times successfully before, you probably don’t know how to do it. Don’t be arrogant. And so when I undertook the process of transitioning, I said, “Well I think that this is going to go quick, maybe two or three years. But I’m not actually sure of how it would go.” And so that’s part of the process. So we began that particular process and I realized the transition from a founder-owned company to an independent company is classically very challenging. And so how do you approach that? How do you strike that balance?

I wanted to be totally a mentor — being there for other people and letting them do it the way that they wanted to do it. And then I found myself in the surprising position of having them struggle with that — unacceptably struggle with that. And this partner and the group of people struggled with that and found that particularly difficult. We all agreed that they found that difficult. So the idea-meritocratic — the evidence of that was clear. And then what was great about the whole thing is that we could approach that idea-meritocratically rather than emotionally. Because it’s a difficult thing — it’s the most difficult thing for the person who is struggling and not successfully getting there.

DUBNER: And this was a guy who you’d hired as a kid, essentially, and had been around forever and I gather were very close with, yes?

DALIO: Yeah. For like 20 years. And I love the guy. I mean literally, wonderful, deep relationship, and he’s a brilliant man. And at the same time, it’s the challenge of that person. And I think it was largely my fault too. I gave him too much. When the business grew up, there were two things: I had to get my head into all the investment and economic stuff that I do, and then also run a business simultaneously to do that. And any one of those things is too much for any human being, me included. And then to take that and then to give it to this person — I made the mistake essentially of giving too much. And, by the way, we’ve evolved past that.

So he’s back making investment decisions and I make investment decisions. We’re both co-C.I.O.’s along with another co-C.I.O. who’s been there. So we had that evolution. But we didn’t anticipate it. And we learned a structure. And I learned a whole bunch of things that I never understood before: like about governance. Look, I just ran the business and we did it in our partnership idea-meritocratic kind of way. But then how do you do the right checks and balances? Should you have a board? Should you not have a board? What are the processes and all of that? So it became a learning process that evolved over seven years.

When I originally started this, I’d say, “I think it’ll probably take two or three, but it might be up to ten.” And it turned out to be seven in which I could comfortably step out and have others do it better than me. Again, this, 2017, is my transition year from the second phase of my life to the third phase of my life, as I described before. And I look at that and I say, “There is a great team of people, and there’s such a pleasure to being able to watch beauty happen without being intervening along those lines.”

And so it’s that great journey, and now it’s their journey in that way so — that was what the experience was like for all of us. And if we didn’t have idea-meritocratic ways of having disagreements and having processes for getting past those disagreements that people thought were fair processes, we would have had a separation. But because people could think, “I might not be right, and the group in our decision making process is really good in thinking collectively,” we were able to get through that difficult time very effectively and evolve to a much better position than we were ever in.

DUBNER: I’m glad your story ended better than most of the heroes in Joseph Campbell. Right? Because the hero’s journey can be bloody at the end, and there’s often not the nice perch you’ve accomplished now, which is, you’re still in it, and you’re still part of it, but you’re no longer one of the two C.E.O.’s, so it must be a very gratifying position to have earned. And so congratulations.

DALIO Yeah, but as you know, the life isn’t over yet. And as you’re pointing out, in Joseph Campbell, heroes tend to get crucified or whatever. But I think if you can pass it along — I was faced with the choice. Honestly, I don’t like high profile. I don’t like to be in that position. And then I was faced with the choice: do I let that fear of that stand in the way of passing these things along? And I can tell you: there was a lot of fear in terms of this. But I am not in any way declaring victory; I have not yet gotten there. But I do find that there’s a necessity to do that.

DUBNER: Why didn’t you want the public attention?

DALIO There are so many ways public attention is bad, right? First of all, for various reasons, people don’t treat you the same, it’s not good for your family and your kids because all of a sudden they’re going to get the public attention. By and large it’s almost totally bad stuff, right?

DUBNER: Isn’t it strange how many people seek it out though?

DALIO: I think they just don’t know better.

DUBNER: I often think about that. You read about or talk to people who have accomplished a lot of fame, especially in the entertainment realm which is one where you choose to want to be noticed. There are other areas, like sports: you play sports, you’re great — if you happen to succeed you happen to become famous. You didn’t seek to become famous necessarily. But then there are other lines where you do and it seems that especially, even in the ones where you choose to, the regret is almost instant. The cost of fame is huge, which I would think that people would recognize by now, but they still seem to want it very badly.

DALIO: I think that what happens is that a lot of people who are not in that position — not only the issue of fame or accomplishment — think it’s so different than it really is. Even the issue of who’s successful — they think they’re really uniquely special people, rather than they’re stumbling on the way and failing. And everybody that I know who’s been successful has failed in important ways and has gone through that. That’s a reality. Everyone that I know who’s very successful has — and I know a lot of people have been very successful — also knows that they are weak in certain ways and that they know how to orchestrate other people so that they can get what they are missing. They’re worried about what they don’t know, and they value not knowing even more how to deal effectively with not knowing by more than that. And so we look at this, and there’s almost an idealization of such people that it doesn’t feel anything like most people expect it to feel.

DUBNER: I can’t tell you how much I enjoyed this conversation, and I thank you very much, and once again I congratulate you on the book and on this awesome third phase.

DALIO: Thank you. I enjoyed it too.

DUBNER: Great. Be well, Ray. Bye.

Thanks to Ray Dalio and all the other C.E.O.’s we’ve been hearing from over the past several weeks. And don’t forget to check out our entire “Secret Life of a C.E.O.” series. Also, please keep your ears out for our regular Freakonomics Radio episodes, which hit your podcast stream promptly at 11 p.m. E.T. on Wednesdays.

Freakonomics Radio is produced by WNYC Studios and Dubner Productions. Our staff includes Alison HockenberryMerritt JacobGreg RosalskyStephanie Tam, Max Miller, Harry Huggins, and Brian Gutierrez. The music throughout the episode was composed by Luis Guerra. You can subscribe to Freakonomics Radio on Apple Podcasts, or wherever you get your podcasts. You can also find us on TwitterFacebook, or via email at radio@freakonomics.com.