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  • When Crazy Ain’t Crazy: It’s A Strategy

    What gives: unconventional culture and perspective collated to create precision and prescience.

    Running Bridgewater Associates, the world’s biggest hedge fund has its advantages, but some question the culture and measures behind their success.

    John Cassidy of the New Yorker profiles Ray Dalio, the founder of Bridgewater Associates, who has produced remarkable returns on Macro investments, while his counterparts, big and small, have suffered sustained and prodigious losses.

    What gives: unconventional culture and perspective collated to create precision and prescience.

    Reading Cassidy’s article, Mastering the Machine: How Ray Dalio built the World’s Richest and Strangest Hedge Fund, you see a leader, who wants evidence, who leads not by convenience or by consensus, but by the facts and by anticipating how the facts might change: Dalio, seemingly, does this better and faster than everyone else in the world.

    But Dalio does have his detractors: there are some, who say that his culture is isolated and cult-like, which keeps the firm on the periphery of traditional financial practices: some have even think that Dalio might be a little off. As Cassidy states in Mastering the Machine, “Dalio’s philosophy has created a workplace that some call creepy. Last year, Dealbreaker, a Wall Street Web site, picked up a copy of the Principles and made fun of a section in which Dalio appeared to compare Bridgewater to a pack of hyenas feeding on a young wildebeest. In March, AR, a magazine that covers hedge funds, quoted a former colleague of Dalio’s saying, “Bridgewater is a cult. It’s isolated, it has a charismatic leader and it has its own dogma.” The authors of the article noted that Dalio’s “emphasis on tearing down an individual’s ego hints at the so-called struggle groups of Maoism,” while his search for “human perfection devoid of emotion resembles the fantasy world in Ayn Rand’s ‘The Fountainhead.’”

    I think Dalio has found a secret sauce that Upstart: Business and Management for 20-40 Year Old Professionals members should heed: actually America could adopt this principle. We have to do the work that we need to do, as opposed to the work we want to do. Dalio found that people want convenience and ambiguity, because it allows them to hedge and still get rewarded without producing results, but Dalio, says no, let’s get it right — show me the evidence and own it. That’s the performance that I keep shouting in almost every post I offer commentary, because greatness does not come at the end of convenience: it comes at the end of a vision – a plan with strategy – execution and continually reconsidering everything – all the time, and besides, even if Dalio’s culture is creepy – look at the results – the results, legal and outstanding – speak for themselves.

    Sometimes to be different: to do what you do well, you need to foray in unchartered territory, be ridiculed some – despised by others, but you know what – that differentiation and superlative performance is where the money is.

    Good Luck.

    Calvin Wilson
    Founder and CEO
    Upstart: Business and Management for 20-40 Year Old Professionals
    calvin.wilson1@verizon.net
    http://twitter.com/Upstart__Nation

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