Ray Dalio, Founder and Chairman, Bridgewater Associates
Ray. We, are so excited to have you here tonight at Stanford, thank you for joining us I'm so glad to be here, well. Ray as a tribute, as our little tribute to Bridgewater we are going to videotape this conversation, okay. But. I had to veto any of this life scoring, stuff I'm just not at your level and hundred feedback, yet, we've. Got a lot to cover your. Life your, principles, and how, you think about the future but. Before we start I want to get a feel for our audience here tonight so. Please raise. Your hand if you, have read or our reading, Ray's, book principles. Wow. Wow pretty. Good okay. And for, the rest of you how many of you are planning to read principles. Yeah. They're an ambitious group for, anyone else out there do you at least have your own moral principles. Yeah. Okay good good. Let's. Start back in the early days on Long, Island no you, were quite the capitalist, growing, up you. Were a paperboy, a lawnmower. A snow, shovel er and a, golf caddy and at. The ripe old age of 12 you. Made your first investment, in the stock market, talk. To us about how that even, happens. Well. You. Know everybody was talking about the stock market there's. No big deal really hmm. At. The time in the 60s the, stock market, was the hottest it has ever been. Literally. If he got a haircut or anything everybody would talk to you about the stock market and so when I was catting. They were talking to me about the stock market and I'd take my, $6. A bag I would take. My $12, and and when I got $50, I had put it in the stock market it was just a natural thing to do and it did pretty well the first investment yeah. I it was the only company that I ever heard of that. Was selling for less than $5 a share so. I figured, I could buy more shares which meant if it went off I'd make more money that was my rationale, that was, rationale, right, and. It, was a company that was about to go broke but. Another, company acquired, it it tripled in value and I thought this game's easy I can make a lot of money game's not easy but that's, what got me hooked so, you got a bit of a rolling start but, you, continue to invest through high school and university, and, you, later enrolled at a business school one, we like to call the Stanford, of the East. Where. You met of course Joel, Peterson, and. Joel was in my head group and we. Have good memories. Now. You, know we'll, talk about those later now. For, your summer internship, many, of your classmates, were going to Wall Street and they were seeking, these glamorous equity, trading positions. You. On the other hand saw. That a role in commodities, trading which, at the time wasn't. Just less prestigious it, was pretty obscure, for an MBA to seek. Out that kind of a role so. Talk to us about what that experience of going, against, the grain taught, you. Well. It, was I. Figured. More, they had low margin requirements, right you only had to basically, put up about 10% of the money so, I figured if you're gonna be right you'll make more money because the low margin, requirements so I got hooked on commodity, trading and then, there wasn't anybody who would go from Harvard, Business School so this was. 1972. The. Summer of 1972. When I went to the director of commodities, and I begged. For a job and he. Gave me a job and that. Was just, before the, 1973. Oil crisis. And the oil shock and then. Wall, Street went to hell and, commodities. Became, hot and I was lucky and so I went, into commodities so, you were hot property, by second year and I.
Never. Did I never really knew anything about commodities. Other than the summer job but, I was then a hot property because there was no Harvard. Business School type person, in commodities, so I got a job which. Was stupid, to hire me but, they did and then. That company then. Got. Into trouble then I went to another company and I did that for about, a year and then, started. Bridgewater so I'll I just want to you skipped, over something there and I many, of us here in the room ray we know you as a master, a master of thoughtful. Disagreement, okay, but, you didn't have that concept fully nailed back, in those early days so, talk. To us about that. Disagreement. You had with your boss on New Year's Eve. Well. I mean, we. Got drunk and then. We. You. Know we uh, I. Loved. Him and. And. He, was a good guy and, but. What he did he, but. He drove home he. He. Totaled his car his. Wife chewed him out because, he they missed their party. And he, came in with a black eye and he didn't fire me that he. Didn't fire did not fire me okay and then. It was another incident, that caused him to fire me. But. Either I want to know what got you fired. Can. You tell us what anyway they. Anywhere. We that. That was the best thing that actually happened to me because then. I was on my own now. Some of our career advisors, around here we might frame that one as passion right and. It. Was it's it's it you, know kind of in retrospect it was a stupid thing to do right but, it. Was. It. Was just what I was like at the time I guess and so, you go ahead and start, Bridgewater, associates, from your two-bedroom apartment, in New York so. You're 26, years old you're, a first-time, entrepreneur, and a. Professional, investor. Now. Something, those roles would seem to have in common is you have a high risk of being, wrong and making, mistakes, talk. To us about your relationship with mistakes, and how, those led to your principles. Yeah. I. Think. Just. Generally as an entrepreneur, or. In. The markets, you have to think differently in order to be successful. I'm, the markets, whatever, the view is is built into the price because it reflects the consensus, and as, an entrepreneur starting out of business you have to think differently and there's, a high risk of being wrong, and, so what I learned, over that period you have to be, audacious. You, have to think, differently you have to be confident, and then. You also experience a high risk. Of being wrong and I think we're going to go to a. Clip, of of. One, of those really big mistakes. That I made that changed my whole approach to decision, making so. I. In. 1980-81. I, had. Calculated. That American, banks had left lend, a lot more money to foreign. Countries and those countries are going to be able to pay back and that we were going to have a debt crisis, and I. Thought that that would cause an economic collapse and. In. August. 1982. Mexico. Defaulted, on its debt and I, received. A lot of attention, for that and I was asked to speak, to. Congress at that time and I was also, on Wall, Street week and we. Brought a clip of that so you'll you'll get a sense of, that. So is that can you hit, the button and show the clip mr.. Chairman mr. Mitchell it's, a great pleasure and a great honor to be able to appear before you and examination, with what is. Going wrong with our economy, the. Economy is now flat teetering. On the brink of failure you were recently quoted in an article you said I can say this with absolute certainty because, I know how markets, work I can say with absolute certainty that, if you look at the liquidity base in the corporations, and the.
World As a whole that, there's such a reduced level of liquidity that you can't return. To an era of stagflation. Wasn't. I arrogant. Incredibly. Arrogant I couldn't, have been more wrong, I was. So wrong that. Was the exact, bottom in the stock market, August 1982. Mexico, defaulting, on its debt and was the bottom in the stock market we had a big bull mark and I. Had then, I think like eight people at Bridgewater and I had to let him go and I, was, so. Broke. That, I had to borrow $4,000. From my dad in order to pay for my family, bills. And. That was very painful and it. Changed. My whole approach to decision making because. It, made, me think in the, future how do I know I'm not. Wrong how, do I know I'm right it, gave me the humility, that I needed to balance with my audacity. And, it, made, me bring. In people, that would, disagree. With me so I wanted to find the smartest people that would disagree with me and I, really, you know. Started. To think about how, would, I deal with disagreement. And I would say that this is this is a big thing. It's, such a pleasure to be here by the way because you're, beginning, this, phase of your career you're just about to this. What I call the second phase of your life first phase of your life is when you're dependent, on others and. You're. Learning second, phase of your life is that when you're working and then, eventually others become dependent on you and in. That second, phase it's totally, different and I'm, going into my third phase, and so, to be able to sort of pass along some things that were helpful to me where. Is, is. A treat and along. Those lines I would say you're gonna keep having failures. As. Well as successes and. It's in the failures, that you, learn the most and so my. Attitude began, to change in terms of making decisions. Most. Importantly. I. Would. View, 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 so. That I wouldn't have that bad outcome, so. And, if I could saw, that that, would give me the gem and the gem was the principle and the other thing that I did was write. Down all. My. Decision-making. Principles, one I, would, make, a decision, I would take, the time and say what are my criteria for, making that decision and that was, so. Available I'd, want to pass that along to you you're, going to encounter so. Many things, in your life and, you're. Just gonna make decisions, like that if. Instead you, pause and, you think. What are my criteria for, making. That decision you write it down and then you, reflect on it you'll start to realize that, the same thing happens over and over again and when the next one comes along you'll.
Reflect, On that principle, and you'll refine it and it, serves the purpose also, of letting you communicate. Very effectively with. Others so when I started my business, it, was great because we, would all know what. We could expect and why well and that whole process so. That I. Mean I think it's really that whole notion of the, best comes. From, learning from mistakes and, doing that in a systematic, way failure. Is just part, of the journey and, to, get to those mistakes ran to bring them out into the open you needed an idea, meritocracy. And for, that you needed radical, truth and radical, transparency talk, to us a little bit about those two columns yeah I don't know exact you have that. Diagram. Okay. Zack yeah so this is this. Is this is this is the way it worked for, me so, in order to be six in order to be successful. I needed. Independent. Thinkers, who would disagree with me and that we would disagree with each other, because. Otherwise it's that false confidence how do you stress test each other to, get to the best idea so I needed independent, thinkers who, were also wanting to go for the audacious goals, so. If you have independent, thinkers how are you going to get past the, disagreement. You, actually, have to have a system for, disagreeing. Well and getting past, the disagreement, so I needed, an idea meritocracy. In other words an actual process, that. Organizes. Disagreement. To get past it and, in order to do that then, I needed to have that principle. That I needed to write it down and we all needed to know what that rules are and then, we need to make these systems and then, when we did that that. Changed, everything right that thoughtful disagreement. Because it's collective, decision-making, in, which you, significantly. Increase, the probabilities. Of making a right, decision I think, the greatest tragedy. Of people. Probably and one of the greatest tragedies of mankind, is people. Who hold, opinions, in their mind that they're attached to that. Are wrong that. They could. So easily stress-test. And significantly. Raise the probability of being right so we needed to do that and when, we did that we had at our successes, and our failures but. We but the people believed, in that idea meritocracy. And and it was fair because, the system, if. If you have a system, in which you. Can fight. For your arguments. And you know that the system is going to be fair you can care more and so.
That's The top organization. I needed to and that was the key right whatever, success I've had in my life has had. More to do with my knowing how to deal with what, I don't know then. Because, of anything I know and that idea meritocracy. That triangulation. With smart people sorry, I want to go a layer deeper on this radical. Truth and radical transparency I think for many of us hearing it here it's very hard 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 embrace, by. The way that's the competitive edge right, because. If it, was you. Know if you were to say what's the edge that's. The that's the edge I. Think. We. Have ego, and blind, spots barriers, that stand in our way and so, that notion of attach to what you know is. Such a big thing for your ego or your blind spot and. And. So. There's, a subliminal, reaction. When, you're, disagrees, rather. Than producing, curiosity. There it produces. Antagonism. Like it's an amygdala, reaction, and, I. Think a lot has to do with the education system too, you know you're rewarded, for knowing or, you're rewarded, for not making mistakes rather, than knowing what your weaknesses, are so, in order to go through that, it. One has to intellectually. Go through it to say does it make sense so, let's say we're gonna have a relationship and, you're, now you're, working there and you're my partner, great and I owe. Ya, what is who it's like. But. You, would say you, would I, would say do. You do, you want me to know do you want to know what I really think. Do. You want to tell me what you really think. Do. You want to know your weaknesses. Hmm. Do. You want me to know my weaknesses. Intellectually. You, 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. It takes, adapting. To so what we we, describe it as there's, to use there's. The and this, is, correct. In. Terms of literally there, is a conscious. Thoughtful, you that. Might say I would like me to do those things I'd like to know my weaknesses, so I can know how to deal with them and then. There's an emotional, you that's subliminal, and it's. Really the battle with your to use, that you have with yourself and, once. People start to realize that and they come in that environment then they see that they're really more struggling, with themselves, than each other so, that radical, truthfulness, so the right way it is is. Minore, der to have the radical truthfulness. You, have to put what you honestly think on the table, can. You do that and then. Transparency. Means that you can get to see everything so what I did was, put. Everybody. Could see everything so that was the main thing so when I would make decisions, I would I'd, be doing I'd be very very right, we open about, what I was doing in the most difficult decisions, that we would make and then. I would, refer, to the principles. And then, I'd have everybody, challenge, me on whether that made sense and so, our, intellectual. Approach. Overcame. Our emotional. Barriers, but I think it's like that for. Physical, you, know I was. HR. McMasters, here and he was a great. Host to, me down and I got to see Ranger, School and I. Think about those put those people pushing themselves, and how they were pushing themselves and. They were doing the physical equivalent, although, the Bentall was equally important, and that, produces, that particular strain they wanted, that and that's, what Bridgewater. Is about but it's not for everybody just like some people would watch out of the.
Army. Rangers it's, off for everybody, but. It's powerful, because. You build these you, build. Meaningful, work and meaningful, relationships, in, other words I think that that's, the power, if. You are committed, to your mission like you're excited, you we're going to do this thing together maybe. A startup or maybe. Whatever. It is you're, on that mission together and then. At the same time you're on that mission you have these meaningful. Relationships. Which means total, honesty and with, that total honesty and that meaningful, relationship. You get a joy, out, of the relationship, as well as you get a joy about 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 what it's like. So. That's really what you're avoiding it's the kind of politics and the gossiping, that you might get in the normal world albeit. It's not for everyone not everyone can kind of take this it change it changes the it changes the ethic like there's. No talking behind somebody's, back and, and, the reason it is is it's almost like, first. Of all it's unproductive, if you're talking about behind, somebody's back then. You're not dealing with the particular issue, in, a place like where. We value, about anybody speaking up with their point of view then, you can raise it and you can then deal with it but, also it. Then becomes sort, of an ethic, thing that, like. Don't you have the, guts to. Talk about what you're saying and so. If you have the guts so it's almost humiliating. To talk behind somebody's back and, so, that standard. Then carries, forward and it's you. Know it leads, to that kind of radical truthfulness, that radical, transparency so. You have some, people you, know it's it's not at all for and then you have people who, couldn't work anywhere else because they that wouldn't want to work they go into the company and everybody's, smiling and the giving high-fives and whatever and they're all talking - I had each other's backs there's a lot of politics. Going on and that they can't deal with so a. Lot of people wouldn't, want to work anywhere else and some people it's not the right place for Surrey you've built, a machine really, that supports, this culture, and you. Also have a belief that humans, are machines. I, think, few companies have done more, than Bridgewater to try, and use data to understand. Their employees. To. Put their attributes, and their talents into, numbers, so. I'm curious if you 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. Talents. Even intelligence. Is more fluid, and can change well. I think the I'm, just trying to be as accurate as possible and, change. If it change occurs, then is reflected, in the numbers and everybody, sees the change so. It's a lot but. But, I think that at any point in time you, have to be realistic, of, where, you are and you, have to recognize that people have different strengths and weaknesses, and. If you're not dealing with that that, that's a particular problem, stands, in the way of the growth of the particular people, and then also, people making, choices about other people there right so if I'm your boss or or. Making, 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 than I'm right so, the data kind, of helps to speak for itself in, terms of understanding, what it's what a person is like, so I think it's you, know it's a.
Good. Thing though it doesn't mean that you don't stand in the way of evolution, it means that whatever extent evolution, occurs you get to see it so. I think that the bigger context, here raised many, of us will be graduating, in a few months and, some. Of us will be making a choice do we return to a job and a function, we know how to do that suits us well or, do, we branch out down. A new on tested path from. What you've seen at Bridgewater what, might you advise us and how we think about that this, is that this is the time for your adventure you're experimenting. You're learning, right for. For. That, experimentation. And I'll, guarantee you that wherever. You're gonna be in five. Years is going to change you. Know it, go. For the experience but, I think the most important, thing I would say, when. You're going on that adventure is, to, understand. How. To triangulate well. What. I mean is find. The three or, four smartest. People who. Are dealing with the. Most important questions that you're facing, particularly. If they're willing to disagree, with each other and disagree, with you on that and then. With. That triangulation. Where are their areas of the disagreement, that'll bubble to the surface and, you'll find out, what. You know what might be you'll. Learn a lot and then, through, that, that. Humility. You go through experiences, and make, the most out of your failures, the. Adventurous, do make, the discovery, go, for it all right right, all, right well we're done thank you very much, joking. But the, other the other question we face Ray is what type of organization do, we join so, I think culture, is the most important thing I think who. You're with okay. And where. You are is. Much, more important, than what you do. Sorry. Let. Me take you up on that so let's assume you're in our shoes you're. About to go, into the working world and you want to work in an idea meritocracy. Many. In this room are, going to join large organizations. That have embedded, 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've got to you you have the choice to get, working wherever culture, you want the most important, thing is do, you work in the culture now you were raised here, in your education, and before to, try, to have the opportunity, to make sense of things, okay. So I would go into your job and say 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 and why. It makes sense and to be able to probe you or do, I not have that right and. I. Think you should think hard about whether you want to be in the organization, that doesn't give you that right so. I think the most info Stan, fundamental. Thing is. Is to be in that kind of organization. With. Humility, in other words recognizing. That you might not but you always have the right to. Make sense of things and if something doesn't make sense to. Say it doesn't make sense, so, that I would say that that would be the most important, thing for me if you're gonna learn because. Otherwise you're gonna be somebody, slept, you, know they're going to say do, these things and you're, just going to run. And follow their instructions and, so on and you're not gonna learn if you're following their instructions because. You have to think for yourself I think and. You've given us plenty of tools to do that right I want, to talk a little bit about your, legacy you've accumulated, these principles, over 40 years you've decided to share, them as part of what you're calling this third, phase in your life a question. Joel often, asks the class is what does winning look like, to you you've. Invested, huge, amounts of your time and energy in this public facing role what. Does winning look like, in this third phase I think through. Life it's all just a matter of personal. Evolution, and contributing, to evolution, for me you. Evolve and there's. An instinctual. Reaction. That I had. That. What, I wanted to do is pass, along the things that are valuable to me so I can, move beyond that and. My. Son at. 2014. When I was making this transition. This book, Joseph, Campbell's hero of Thousand, Faces and, he describes these various phases of our lives which, I laid. It to and. I won't take you through them all but there's, a call to adventure you, go in the venture you have your ups and downs you reflect on them and so on and then when you get to this stage in your life. They. The. Thing that you want more is not to be successful you've done it you don't want to be more successful you, want to help others be successful without, you, and that's. The that's what I feel and then when I feel, like if I'd done that best job I will have done my best job and we're good and so, that's my instinctual.
Reaction. At the start, well. You've given us a lot start and I know there's plenty out there who haven't read the book so you're, not quite there yet but I want, it I want to say just for everybody and, I'll mention. It. What. Maybe later. What, I did was there's. The book and then. I, converted. The book into. An. App that has the actual cases of Bridgewater's, so you could go into meetings. And you, can actually see. This. In actually called principles, in action it's a free app on. The Apple Store, and. It'll. Take you into that so you get a sense of what the thing is like plenty, more case studies we love those Ray's. Now. Ray we could spend another error on these principles but, unfortunately, you've got far too many other perspectives. We want to probe you on let's. Start with history you're, a student of history you've. Stated that everything, that happens is just, another one of those so. I'm curious when you look at today our stage. In the economic, cycle our political, tensions, our geopolitical. Tensions. What's, the historical, precedent, for what you see and what, does that tell us about what happens next well, I think, it's there. Were cause-effect. Relationships. And, then, they repeat through history, I, think it's important, to not just assume that because they happen in the past that, they'll happen again but also to understand, the cause-effect relationships. So what answering your question I like to refer to both. One of the things that I learned was. That, I was, every, almost every time I was surprised I was, surprised, by things that happen didn't, that, happen OTT, happen, in my lifetime but. Happened many times before and, as. A result, of that I really. Found that I really needed to understand, history. And, why things happen, before it and that in the, tooth out, 2007. Because I studied what happened in the Great Depression let. Me we. Were, able to anticipate the 2008, financial crisis. Because, of what happened in, 1929. And 32, so, the period that I think that was most analogous, is the. Late 1930s, and I'll explain why. And. This. Is just the mechanics, of it. We. Had a debt, crisis, in. 1932. 1929. To 1932. And in both of those cases, interest. Rates hit zero, only, two times in the century that that happened, when. Interest rates hit zero, they. Had to the central banks had to print money and buy financial assets we call that quantitative, easing those. Purchases. Of financial, assets put financial. Asset prices, up and, as. A result of pushing that up it. Makes, the economy go up so, 1932. To 1937. The, economy, the stock market, went up everything. Went up in much the same way as it did from, 2009. Until. Recently. And then. But. Because. They did cause phonetic, bought financial, assets those, with financial, and assets, benefited. More than those who didn't have financial assets and there. Were other factors like we have technology. Today replacing. People, and as, a result, we began, had, a large wealth gap so. If, you look today the. Top one-tenth, of one percent of, the populations. Net worth 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 time that 1930s. Period of time and, with, a large wealth gap and differences, in values, then, you have, populism. The, emergence, of populism, populism. Of the left and populism, of the right and if you go through history the, law if you were to say when did the last time you had populism, in major countries, it was in that period of time for, similar, reasons and, with. That time also you. Had the classic, rising. Of a. Power. To challenge as an existing, power in that, case it was Germany. Rising. To challenge the, British the. British Empire, Ln, and then Japan and Asia and like. Now we have China rising, and that there's, a calm. A. Rivalry. A conflict. So, the only periods, of time that you could see that was analogous. Recently. The most recent, period of time is like that so I would say what what are the big issues of the time the, big issues today are that. There. Is a. Limited. Ability of central banks to ease, monetary, policy, because we have interest rates near.
Zero Most. Cases around the world and so the capacity, of central. Banks teas 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 and then, you have these, conflicts, around the world and so, that populism, of the left and populism, of the right has big economic, implications. Have. What it'll mean for Tax Policy and what will it mean for, even. Conflicts. Between countries, and so we have that rising, power. Situation, so that period of time looks. Most analogous, to today. You've. Covered a lot of things there ray and we'll try and dive, into a few at the time we have left on a high level it's, a pretty shocking, comparison. To make and, we. Know how, the 1930s. Ended. Do. You believe that on our current, trajectory we're, heading towards, some sort of conflict. Well what, we're certainly heading, to, different. Kinds of conflict, the question I think is how we're, going to handle them we, certainly, are headed. Domestically. To. Lots of conflict, right if you were to take. The. Polls of. The. Republican. Party that is the most conservative, it has been ever, the. Democratic, Party is the most liberal it is lever the. The. Voting. According, to party lines is the. Most it has been ever. 94, percent of the votes are according to party lines and so, we certainly have, an internal conflict and that internal. Conflict, has to do about the combination. I think of the. Economic, conditions, that left and the writer that let's, say socialism, and capitalism are. Our issues and then there's also ways that we are, to. Be together I would say you. Know I don't, know that, we're clear on what principles. Bind us together as a country, I mean, I think we should go to principles, what. Principles, bind us together as a country what. Are we believe in what are the principles, that divide us but, anyway we are having more domestic. Conflict, I think, and. Then. International. Conflict. There. Is this this. There will be a, challenge. A competition, that, is going on between, the United States and. China and other places but particularly the United States and China which is a whole other discussion that.
Doesn't, Have to be a military. Conflict, though. It could be, and. It, depends, I think on how we handle, the conflict, so. I think. There's. The China. American, relation, that's a topic. We could digress, into if you want to cover it but, there's, I think it's all how. Are we going to be with each other right. So let's say this, this. Issue of the wealth gap and the left and the right my big. Fear, is that. The. Conflict, and then. Just. Badly. Ends, your knee. Policies. Can, cause. Us, to, have worse conditions, than we need to there's, like there's there's enough resources, to go around to, move us toward more equal. Opportunities. In various ways we can deal with this together but, yeah, I think that we're an environment, in which. Conflict. Is going to be more. Problematic. Than we, have actually, experienced. Now. Ray there's two, issues there's the external conflict, there's the internal conflict, in our own country, you've. Talked about redistribution. And you've recently published a piece how and why capitalism needs, to be reformed, and a, need for greater redistribution. Because. It's tax day April, 15th. Apologies. Would. You agree that a person, of your resources, and your wealth should. Be taxed more by the US government to help further this. Yes. I I believe. That it's inevitable that we should yes, I think, but. I think the real question is. The. Most important, is. Are. We, striving to, have a, country. What is our American, dream are, we, striving to have a country, that is. Something. The court long lines of equal opportunity. Are we striving along how, do we feel, when. There are school. Districts. That. Don't. Have adequate. Anywhere, near adequate resources that. There's not enough it's it, goes to nutrition. There's nothing, approaching equal. Education. I broke, the economy, to up into two, parts so that I could see it because it gets lost in the averages, so. The. Top forty percent on the bottom sixty percent because I wanted to see what the majority of, people the bottom sixty percent is like. And. Certain. Things like the, average in. The top forty percent they, will spend five, times, as much on their children's, education, than. In the bottom 60%. And. And, school, districts, are you know starved, for resources. And. There's. A whole different life I can rattle it if you want to go see it I'd really love you to go, see it it's, a study. And. That's on LinkedIn, and it. Shows, the outcomes, so. I guess what, I'm looking at that I would, say. That's. Not I, think. A fair system and, beyond. That it's a system that threatens, to destroy us if we don't find, a way to reform. It now I'm a capitalist. I want I do believe, in the idea of. Working. Hard and earning and then saving and what capitalism. Is is, you buy a, instrument. Of capitalism, now you buy stocks that's, capitalism. You own a piece of that business and I, believe that that's fantastic, but, what has to like anything, everything. Has got to be improved with time with, Reformation. So, are we producing the outcomes that we want so. When you read that you see, if we're producing the outcomes we want I don't think so so I'm saying I think we have to modify. That now how we do, that is. Going, to most. Importantly be a very it, has to be a good exercise. Engineering. Exercise that, I think has to be first it's got to be done in a bipartisan, way because. I think this division, is a problems, and I really believe in thoughtful disagreement. So, if you bring together people. Who will living in these communities, and then and, then, you have metrics, right, I think it would be great if the, leadership it 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 it in other words numbers and key. You. Know KPIs, and they, say here's that condition, is that living standard the same or is it rising, and one of the what are we doing in terms education, and with those measures. Then, work together in, terms, of doing sensible. Engineering, I have. My own views, of what could, be done but. You. Know how we get into that that's, a that's a whole conversation I'm not sure so sure my views should. Be should. Matter 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 the most critical issue of our time right now, I think we're, going, to be, in trouble so yes of course that. There needs, to be but there needs to be redistribution. Of opportunity. It's, not just. Redistribution. Of money but when, you pay. That get the schoolbooks, get the nutrition. Get those basic, things I think that's fundamental, well. Ray we're at. Least out of time for now I want to make sure our audience, here have the. Chance to ask. Their questions, of you so anyone out there who has a question please raise your hand we'll.
Find You with a microphone and then if you're selected please stand up and introduce yourself, before. You ask your question. Hello. My, name is max I am mb1 I'm, from Russia so, sorry I don't know the local, political landscape, that well but, my question is having, such a great reputation, knowledge. And leadership experience in, this country why you are not running for the presidents for, the President of the United States. Because. Because. I don't think me and the political, system would get along I. I. Don't, think I'd I think, it's a very difficult system I don't think it would be effective I think that the political. System. Even. The way it's structured where the two parties, and the way they go about it and and you know I think it's a it's a challenge that's almost impossible, to win and. I'm anyway. On well. I I'm, able, at. This moment in time this short moment in time to pass, along some thoughts, that. Others, in that position or, any, position. Might. Could. Take or leave. Thanks. For being here I'm Ida garma I'm a first year MBA student I have two questions if you want to be fair you could just pick one to answer. One. Is you know we, understand that you're really quite, quantitative. And systematic, about the way you think about decisions, for investments. For your business and in personal life as well I'm wondering what. You think about this notion of intuition, do you believe, in it do you use it, and. My. Second question is you, know I'm quite inspired, by how you talk about equality. Of opportunity, I think it's fantastic I suspect, that you have peers. And colleagues who may not think the, same things and how, do you have conversations with them about about this thing that you're so passionate about. Yeah. So. The. First question yeah. Intuition. Intuition, yeah I think. I think decision-making. Is is, a comedy, is subliminal, and. Logical. And fabulous. Ideas. Come from subliminal. Decision-making, but, they may you don't know if they're great, or not that you have to reconcile, them with the, logic, so, yes. Intuition, is. Can. Be very very valuable we. Feel that you see it it's subliminal, the, ability, to collect dots. Connect. Dots and see things in that way. Imagination. All of, that the, some of the best ideas come in, a subliminal, way like. If you're taking a hot shower and, these, ideas come to you it's, not like you're sitting there working hard on those ideas they come up there that can be fabulous, I think, the key is to reconcile, them with your logic because, they could be misleading too so. Yes, I I, would say they're. At least as valuable as the logical, idea. So. And. The second question was, about what. Those how, do you have those conversations with, your peers oh I, just. Thought. Of 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 it to be to, do that openly so, if you were to sit here and, have a conversation, I would welcome anybody, who has a different point of view have a thoughtful, conversation, that's easy, that. I don't see any reason, why there. Shouldn't be good thoughtful disagreement. Hi. Right I'm well. I mostly FS here I'm a student, and I. Know you remember the Giving Pledge so. I was wondering what principles, you apply to your giving, in order to maximize. Your social return, on investment, in the same way you did with your financial returns yeah. The. Saying that it's tougher to give away money than it is to make it is actually, true because when. You're pursuing a profit, you. Will know whether you're succeeding or failing when. You're giving away money it's. Very difficult to have those kinds, of metrics and you and weigh one thing or another it's a lot more confusing. But. I tend to take. The same approach that I would in. My investing. Meaning I try, to think in terms of return on 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, it, makes it has to stretch, your mind because, how do you relate, a.
What. Is the value of saving. Alive what, is the value of an education how. Do you weigh it doesn't have a common, denominator like. Return on investment, has a number. It's money and it's how that is so that becomes a challenge for, me it's very important, to though to try to do that so, we'll establish key. Performance, indicators. And, do, that but, I also. Relating, to me is, the, passion, like, I've decided, how am I going to take, that approach and that, approach I've. I. Make. It a family activity, my. Family members different in varying degrees are interested, in their, own. Philanthropic, efforts, and each, one of them has their own particular passion, I think that's great so, I would say that when, you get past the certain point what, you think about is what do you really want to do you, don't think about profit as much as you think about like what do you want to do and I, think that maybe as you get older, or you feel, more connected yeah, and you also, realize the blessings, that I've had because I didn't, have anything and then I've evolved, and you see what other people are as that marginal, benefit. Of spending, money on yourself into, being able to help other people makes a big difference, so those things return. On investment. How do I make it sustainable, how do I measure, how. Do I judge. How good. We are doing as a family how do i establish principles, we've, got a whole bunch of principles, that people have to abide by in order to do it well so it's, a it's similar but it's it's more difficult because of the fact that you know you can't account for it very well so, like, if you were to think how what should you give money to. Are. You going to be able to measure. Whether. Education here. Or life or those are difficult questions to answer but you you work yourself through it I joined. The Giving Pledge mostly, because I learn a lot. The. The people and there are in somewhat, similar circumstances. And they, brainstorm, well and it's, you know it's a learning process. Hi. Reuben. Arnold MBA, 2 so, I. Know. You've tried to transition, out, of the company and transition, controlled the company several times last years as you're moving into this third phase I was wondering if you could speak a little bit to the dynamics, that might have made that transition difficult. Well. I, fortunately. Had, this principal, here's. The background. Something, like nine years ago I decided that I wanted to transition. It. Was important, thing and I didn't know how long it was going to take me I thought. It would take me about two, years because. I was, working with the people for a number of years and I thought it was going to be great, but, then on the other hand I learned, never, to believe. What I think is a theory, I don't if I haven't done something before successfully. Then. I can't, assume that I know how to do it so, I said then I you, know it maybe it could take up to 10. Years I think. It took me about eight and a half years in order to do that well so, you go down a journey, um. I didn't, know anything, about governance, I had, just run the company, and, with this with this idea meritocracy. That I put myself in a position that I would report to this, management. Committee they could hire fire me they could operate that way so, that I had myself held. Accountable to this idea meritocracy, and I thought this thing was going to work I made, the transition, and then, with. The difficulty. 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 proper, board and I realized I, learned a lot about governance, and I learned about how to pass, those responsibilities. Along to, others and then you, know we work that out and it's.
Been About a year and a half since I transitioned, 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 really, helpful to 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 through successfully. Three times before don't assume you know how to do it. Hi. Alyssa, I'm. An MBA one and when. People talk about economic. Opportunity, a lot of the times we talk about children, of the poor becoming rich but. We rarely talk about children, of the rich making room for other people, and so I was wondering if your. Emphasis on equal opportunity, affected. The way that you parent. Well. Yes see but I think I had an experience because. And I think my kids were lucky because. I, didn't have I. Had. The most important, things I shouldn't say I didn't have anything I had. Parents. Who loved, me I was, I had. An, adequate nutrition, I was well taken care of I went to a public high school but. I didn't have much more than that and, and. Then when I was for, most of my life my, kids didn't have much more than that so, they got to the they know the difference they. Know like, on what, the marginal, utility of having a lot is relative, to that it's not very much and then you, start to create that 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 that would be like it must be much more difficult, in terms of that but so. My experience, naturally. Told, me the differences, and and I think that's it's. Important, understand there been, a number of studies on happiness around, the world. Probably. Stanford's, got their professors. Who wants, study happiness, and the, one thing is that they, found that there's no correlation past. The basic level. Of money, and happiness but, the one thing that is the. Most important, thing that seems to across communities, is a, sense of community in. What.
Your Relationships. Your personal, relationships, and, so. I think that that's you, know affected my approach but I wouldn't know how to do, that if I wasn't if, I didn't experience that I don't think. Maybe. Time for one more question. Hi. I'm David and I'm a third-year undergrad, and your interviews and your book you talk about some great leaders like Steve Jobs and Lee Kuan Yew could. You talk about some, of your favorite stories of great character from people like that great. Character, stories, of great character, stories. Of great character. Well. Different. Qualities and those two people but I. Think. Lee. Kuan Yew was, a. Person. Who was. Wise. And balanced. And. Self-sacrificing. A. Great, leader, who. Had. The vision and, the, common sense and the wisdom. To. Also. Suffer. The slings and, arrows of. His. Position, to, make. Singapore, a very, special place and I you know had the opportunity. To. Know him a little bit and he. Was remarkable, people but I think, that they were. If. You read. Joseph. Campbell's book a hero of a thousand faces you. Could almost say, what, are the archetypical. Characteristics. Of of. Great, leaders and there's. This evolution. And that's described, in that book, in. Which. People. With a sense of adventure and caring they go out on their adventure, and then. They. Are. On a mission and they, succeed, and they fail. And. They do it with other people and that the, mission. And. The other people, eventually. Becomes, more important, to them than their. Themselves, and then. They start, to, rise. In, terms, of seeing things different, which, i think is the essence of what spirituality, is, spirituality. I don't mean religion, I mean, the sense of connectedness, to others. And the whole and when that becomes. More, important, to, them than. Themselves. They. Become that's, what constitutes, being a hero and so, people. Like Lee Kuan Yew and, such people had. Those particular qualities. And, made. You. Know and, did what they did so there are many many many cases I, mean, I'm saying this, man over here HR. McMaster is, is for me a hero for me. And. So I see. It all around me and I, think it is those qualities, that make, a person a hero. Well. Ray we've got a few minutes left you talked about connectedness. In, touchy-feely, language, I might say I feel more connected to you now and. You've. Been very generous you've shared your principles, with us and so as a token of our gratitude we, thought we might share some of our principles, with, you so this is I thought. It would be a thin book it's actually nearly as thick as yours so this is some. Of our GSB, principles, from a lot of students here in the audience today. Oh cool. Yeah. This. Is for real this, is real this. Is great. Great. These. Are your principles these are on this map I do. Want to take, one. Of the things on the apt is part of the app is, a coach and one of the things on it is the. Coach. Allows. You to describe, I'm in this situation, what, principle is best for, that. Situation, so because you just don't want to pile of principles you want to go to, find, the ones that are most appropriate and one of the most, important things about it is it allows you to put your principles, in and. So. You, could take your principles. And drop. It into that, coach I'm gonna be really interested, I think that's the most important, thing I think, we're in. An era where, we're. Confused, about principles, that, I don't. Think we spend enough time thinking about, principles, we think about doing so. Much and maybe, as, religions. Have become less important, and other things we don't think about that so, I think it's so valuable, that you've done it and I think it's a real treat a great, gift thank you very much I really appreciate it very welcome. Inside. Yeah. We're. Actually not quite done yet you're not right, off the hook. There's. One more thing in the. Interest of radical, truth and radical. Transparency. We. Need to clear a few rumors up about you okay so I'm going to give you a series, of statements and I want you to tell us that these are true or false okay. You. Played a pivotal role in the, creation of the. Chicken McNugget, I thought. So. Your. Devotion, to meet commodities, led, you to name your first son after. A cow true. You. Caddied as a child, for. Richard, Nixon and the former. King of England, true. Who's. The better golfer. Richard. Nixon, actually uh and. He wasn't a very good golfer. It. Imagine he's in the water a lot I see yeah. You. Were inspired, by the Beatles to, take up meditation and, you still practice, 50, years later true. And one of the most important, things I think it's helped me a lot, you've. Committed to giving away over half your wealth in your lifetime yeah true. You. Exclusively. Fly JetBlue, out, of loyalty to, Joel. He. Was chewing me out about that, so. That's a no not, yet, not yeah more roots, you've. Worked for 44. Years at Bridgewater but. Have never once got promoted. I. Got. Demoted of you do. You.
Secretly Wish that. You went to Stanford. No. Comment. Ladies. And gentlemen a yahoo political.