The Fund: Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend

California, that pretty much said it all in the headline: “Ray Dalio’s Hedge Fund Dumped by Tiny County Fed Up by Fees Sapping Return.” The numbers were stark. The pension was paying Bridgewater an annual fixed fee of 3.39 percent, but receiving only an average return of 3.1 percent. Bridgewater was keeping more money than it made for the fund.

To fully unpeel what was happening in Westport required a shift in aperture, from the outside to deep inside. The answer could not have come readily to Ackman or Grant in part because they were consummate Wall Street insiders whose careers rested on the idea that hard-nosed analysis—effort and smarts, essentially—could lead to investment results.

Only a tiny group at Bridgewater, no more than about ten people, enjoyed a different view. This band of almost all men were chosen not only on merit, but on loyalty. They almost without exception had never worked anywhere else. Dalio and Jensen plucked the members from the crew of Bridgewater investment associates and offered them entry to the inne

Pershing Square hunted for a small number of quality companies, period, by assessing qualities such as the leadership skills of a given chief executive. At one point in the discussion, seemingly sensing the interview going off the rails and in search of some commonality, Ackman tried another tack. He gave Dalio a layup, the sort of question asked s

In his first days at Bridgewater, Comey would find that his new gig came with certain costs, the first of which was his pride. He was told he had been assigned the thirty-one-year-old Bridgewater cohead of research, Matthew Granade, as his “ski partner,” as the hedge fund called it. The idea was to have someone a few feet away at all times to asses

His go-to move was to grab a marker and draw a squiggly doodle with a positive slope headed from the bottom left to the top right of the board. The x-axis was time, and the y-axis was level of improvement. This was Dalio’s manifestation of the ideal thought process. The loops represented feedback—often criticism—that accompanied the identification

Not all opinions are equally valuable so don’t treat them as such. Almost everyone has an opinion, but they’re not all equally valuable. Many are worthless or even harmful. So it is not logical to treat them as equally valuable. For example, the views of people without any track records or experience are not equal to the views of people with great

Never say anything about a person you wouldn’t say to him directly. If you do, you’re a slimy weasel.

“So, I believe there is an incredible beauty in mistakes because embedded in each mistake is a puzzle and treasures to be had if you solve the puzzle. If you recognize that each mistake is probably a reflection of something you or others don’t understand about how to interact with the world as it is, and you figure out what that is, you will gain o