I wonder if you have read the book "Principles" (Principles)? This book has been very popular for a while.
The author of this book, Ray Dalio, was born in an ordinary middle-class family in Long Island, New York. His father is a professional jazz musician and his mother is a housewife. At the age of 26, he started Bridgewater from nothing.
After 43 years of development, Bridgewater Associates (Bridgewater Associates) has become the number one hedge fund company, and Dalio has also been selected as the top 100 most influential people in the world by Time Magazine and among the top 100 most influential people in the world by Forbes. 》He ranks among the top 100 richest people in the world, and the industry even compares him to "Jobs in the investment industry".
So what is his investment path like?
1. Boy Genius
In fact, he was already a successful investor when he was a kid.
In the early 1960s, when Dalio was 12 years old, he was making some money caddying on the golf course, and all he wanted to do was make money with it, when everyone he knew was talking about the stock market.
Dalio bought all the $300 he earned as a caddy into Northeast Airlines. The airline was acquired by Delta Air Lines in 1972.
His reasons for buying the stock were naive! First, because the golfer mentioned it, that is, "heard it"; one.
Because the stock market is hot, although the reasons for entering the market are naive, they all make money! Since then, Dalio has embarked on the road of investment in transactions.
2. Bankrupt at the age of 33
Dalio's investment journey was by no means smooth sailing. At the age of 33, he went bankrupt due to a transaction and lost everything.
In 1982, a sudden plunge in oil prices slashed the value of the Mexican peso, driving up interest rates and crashing the country's economy. In August, Mexico's finance minister announced that Mexico could not repay $80 billion in debt, of which $20 billion to $30 billion belonged to the US banking industry.
Dalio was thinking at the time that the U.S. economy and stock market would plummet, but the result turned out to be soaring! The main reason is that in August 1982, the Fed immediately lowered the discount rate to save the market, and Dalio's desperate decision made him lose.
After bankruptcy, Dalio lost all his wealth and became left with nothing. But he soon cheered himself up, and did not give up on himself, but regarded this moment as the best lesson in his life. From then on, when he made every judgment, he not only understood what he knew, but also looked for what he did not know, so that You can do enough hedging to make your investment more diversified.
3. The godfather of investment
In fact, it was not only the establishment of a successful fund that made Dalio a god, but also the accurate prediction and stable performance of Bridgewater in repeated economic crises:
——On October 19, 1987, during the famous "Black Monday" in the New York stock market, when most people stood on the roof of the New York Stock Exchange building, Bridgewater Fund obtained a profit of up to 22%, and the media on Wall Street Call it "October Hero".
——During the financial crisis in 2008, despite the average loss of 19% in the hedge fund industry, Bridgewater still achieved positive returns, and in 2009 it jumped to the top of its peers in the United States.
——In 2016, when investment giant Soros lost $1 billion in annual income and Paulson lost $3 billion, Bridgewater’s annual income reached $4.9 billion, ranking first among the world’s top 20 hedge funds.
Dalio credits these performances to his Principles. "The most critical factor for my success is the principle."
Since the 1980s, Dalio will record the transaction logic of each investment and summarize the rules. Later, he compiled these laws into computer language and substituted data for processing to improve the efficiency of investment decisions. It was also in this process that Bridgewater's famous "All Weather Strategy" (All Weather Strategy, an asset allocation strategy that uses economic activity levels and price levels as indicators and adapts to all economic environments) was born, and made it step by step Grow to become the most profitable hedge fund in the world.
4. Principles
Dalio mentioned in "Principles" that he regards life as a game.
In other words, every difficulty and challenge no longer frightens him. When difficulties come, he will be excited instead, because this is an excellent opportunity to upgrade his combat power.
When many people face challenges, it is easy to give up because of fear, but if you regard life as a game of fighting monsters and upgrading, you will have more courage to take the initiative to challenge those things that you are not sure you can do.
If you regard life as an ever-upgrading game, all difficulties will bring pain, but this is the test of whether you can enter the field of higher-level games. If you can regard difficulties as a test before upgrading, rather than pain given by life, you will be more subjective and able to actively accept and overcome these difficulties.
Difficulties and pain are not meaningless. If you can endure pain and overcome difficulties, you will be able to go to more advanced game fields, challenge more advanced situations, and solve more complex problems.
As Shakespeare said, life is a stage, and the men and women of the world are nothing but actors. Life is indeed a game with rich experience, and the wonderful plots are staged for us to experience failure, experience pain, reflect on setbacks, and finally obtain the sublimation and evolution of psychology and personality.
Dalio believes that as long as you follow the cycle of "trying→failing→learning→improving" in doing things, you can achieve an ideal life if you execute it endlessly . This process may seem simple, but it is not easy to practice thoroughly! According to Dalio's life experience and way of doing things, you can also know yourself, think about how to solve problems, and how to remain invincible in the foreign exchange market.
There is a way to success, whether it is stocks or foreign exchange, the way to invest is the same.
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