Ray Dalio - Changing World Order Approaching the War Stage
I recently came across a LinkedIn artcile publsihed by Ray Dalio titled The Changing World Order Is Approaching Stage 6 (The War Stage). For those of you who have been wiping your ass with your face, Ray Dalio is a billionaire investor and the founder of Bridgewater Associates, the largest hedge fund in the world. In addition to being an esteemed investor, Dalio is also considered a great historian and known for his skillulness in analyzing things based on historical patterns. Furthermore, he is a writer and has published a few NYT Bestsellers including: Principles for Dealing with The Changing World Order Why Nations Succeed and Fail and Principles. In short, Ray Dalio is a finance bro fucking legend.
In this new article published Nov. 1, 2022, he explains how the changing world order is approaching stage 6, or the war stage. To summarize, the article gives a general overview of Dalio's "changing world order" which he has constructed based on historical patterns. Below is a brief explanation of each stage in the world order pulled straight from the article. Throughout the rest of the aricle he goes more in depth on why he believes we are approaching the war stage and provides historical statistics to support his theory.
Stage 1 is when a) the new order begins after a war, b) the new leadership consolidates power, c) debts are restructured or monetized so debt burdens are reduced, and d) wealth gaps and conflicts over them are reduced, which leads to…
Stage 2, which is when there is a further consolidation of power and the building of resource allocation systems, which leads to…
Stage 3, which is when there is peace and prosperity, which leads to…
Stage 4, which is when there are great excesses in spending and debt and a widening of the wealth and political gaps, which leads to…
Stage 5, which is when there are bad financial/economic crises and intense conflicts between comparably powerful parties within countries and between countries, which leads to…
Stage 6, which is when there are wars, which leads to…
Stage 1, Stage 2, etc.
I found this to piece to be extremely interesting and definitley a bit scary. I'm also curious whether anyone else has read this article or perhaps his book, The Changing World Order, which goes a lot more in depth. Would love to hear you guys' thoughts or opinions on the topic. Are we fucked? Or has Ray lost his damn mind? The link to the article is pasted below.
To be honest, I feel like you've lost your damn mind. We live in a world where you can't sit on the sidelines and watch. You have to step up to the plate and play ball.
You are the problem.
Noted large_chimp. What might you recomend I do to "step up to the plate and play ball?" Should I take over a small nation state in north east Africa and develop a militia backed by Iranian nukes? Build an underground tunnel network for bottle cap traders to lounge while they drink luke warm milk and puff on their fat cigars? Or perhaps monopolize the entire Austrailian zipline market? See how ridiculous that sounds... I think I'm perfectly comfortable riding the bench while we await the imminent destruction of the entire human race.
I've found it best not to mix a 30 mg XR with a Venti Cold Brew...
@associate 2 in CorpDev who are you? And what experience do you have with stimulant cocktails? Do you have any reccomendations for any other flavors/stimmys? P.S. I'm on Vyvanse, not Addy XR.
Yeah I think worth noting his theories are all based on historic precedents; notably we didn’t have nuclear weapons then so wars were a lot more palatable.
He is also remarkably pro China in the book (perhaps because Bridgewater likes to invest in China and he doesn’t want to annoy CCP) and is miles off the mark in suggesting Renminbi will be dominant global currency - US/Western world would never allow this and China is too closed off (esp. recently) for their currency to be any sort of world reserve currency.
Otherwise it’s an interesting read for some very basic history lessons but he summarises well. I haven’t read principles but I want to - I am slightly sceptical of Bridgewater’s ‘radical transparency’ and his own character (apparently very difficult to work for/with) but will be interesting to read anyways
I’ve also seen articles about him being hard to work with. E.g. “Dalio says about 30% of new employees leave the firm within 18 months” … “Dalio even says the fund has a reputation for being the ‘the intellectual NAVY SEALs’ for its approach to pushing employees” (Business Insider). So yeah he’s definitely a hardo. Also, at the end of the day he is the most successful hedge fund manger, which that alone makes it clear he likes his money. While I’m sure he is passionate about his Principles and theories on the changing world order, you have to imagine the book sales are a big motivation behind is writing.
^^
On the chance you haven't read it, The Black Swan by Nassim Nicholas Taleb is a great counterpoint to this systemization of history that attempts to predict the future. His framework provides good food for thought, especially for chronic skeptics like myself.
Haven’t read it, but have heard of it and somewhat familiar with black swan theory. A few months back I had an interview for a financial analyst program at my school and my interviewer (professor of integrated finance) was fascinated by my previous work experience at a tech company which led to a super in depth discussion over black swan theory. I’d guess that over half of the interview was spent discussing black swan theory and the professor’s obsession with technological warfare. This provided me with very little opportunity to express my desire to work in finance/show competence of basic finance concepts. A few weeks ago I was rejected from the program. Stay skeptical…
I'm not sure how I feel about framing world events within the context of the 20th century. I think the scarier (and more likely) scenario to play out is that geopolitical events to come have no modern parallel. We have never been this globalized, connected or in possession of weapons that are this destructive.
Trying to predict the future beyond 4-5 years is asinine, I mean, nobody predicted the Depression in 1924, nor did anyone predict 9/11 in 1996 (except the CIA). So why should we make predictions about 20 years, 30 years into the future. The truth is, the world is 50 orders (maybe 48 orders for Ray Dalio) of magnitude more complicated than any of us can comprehend.
That's why bottom-up (value and growth) investors often do better than macro investors, they focus on finding mispriced securities, whereas macro investors waste their time on making broad-scale predictions about the world. While it is in fact true that the world works in cycles, it seems very hard to believe that cycles are as simplistic and elegant as Ray Dalio suggests.
Maxime est fuga cupiditate. Quis natus unde assumenda sapiente sed optio. Vel eaque et reprehenderit minima repellat. Laborum nulla odit reprehenderit sapiente est repellat non.
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