×

Ray Dalio says 'greatest tragedy of mankind' is people clinging to wrong opinions

  • Ray Dalio believes that "the greatest tragedy of mankind — or one of them — is that people needlessly hold wrong opinions in their minds."
  • The manager of the world's largest hedge fund clarified the unusual culture at his hedge fund known as an "idea meritocracy," by which employees rate one another's credibility.
Ray Dalio speaking at the 2017 Delivering Alpha conference in New York on Sept. 12, 2017.
David A. Grogan | CNBC
Ray Dalio speaking at the 2017 Delivering Alpha conference in New York on Sept. 12, 2017.

Ray Dalio, who has built up the largest hedge fund in the world on the back of an intense internal culture advocating radical transparency, believes that "the greatest tragedy of mankind — or one of them — is that people needlessly hold wrong opinions in their minds."

The Bridgewater Associates founder and chairman was answering questions on the unusual culture at his hedge fund known as an "idea meritocracy." The endeavor has led Bridgewater to create a system in which employees rate one another's credibility on a number of dimensions, and everyone can see the ratings.

The data from these assessments are crunched to create a "believability" rating. Votes by employees with higher believability ratings are given greater weight in decision-making.

Dalio was speaking during the Delivering Alpha conference presented by CNBC and Institutional Investor. He explained that he believes a firm's ability to abide by "radical transparency" is key to its success.

"If you don't show people things, you're going to have manipulation, you're going to have politics behind it," said Dalio. "The real question is: Can you really know what somebody else is really thinking?"

"Think how much better that would be, how much more efficient that would be."

Dalio has faced criticism for his methods, as his early approach would "demoralize" co-workers. The New York Times reported last year that an employee complaint with the Connecticut Commission on Human Rights and Opportunities said that the firm was like a "cauldron of fear and intimidation."

Dalio will publish his codified principles in a book, "Principles: Life & Work," which has already drawn much attention from investors and outlines many of the painful lessons the CEO has gleaned over his years on the Wall Street.

Bridgewater is the world's largest hedge fund, managing about $160 billion, according to its website.

"If you want to know the key to whatever Bridgewater's success has been, it's not me, it's not what's in my head: It's my ability to deal with what I don't know," he said Tuesday.

Delivering Alpha

Latest news

2017 Advisory Board

Complete panel sessions | Delivering Alpha 2017

Previous Years

  • CNBC and Institutional Investor hosted the 7th Annual Delivering Alpha Conference on September 12, 2017.

  • Delivering Alpha 2017 stage, signage

    Meet the 2017 advisory board of Delivering Alpha, which takes place on September 12, 2017 at The Pierre in New York City.

  • The stage at Delivering Alpha 2016 in New York on Sept. 13, 2016.

    CNBC and Institutional Investor hosted the 6th Annual Delivering Alpha Conference on September 13, 2016.

About

CNBC and Institutional Investor are pleased to host the 8th Annual Delivering Alpha Conference in New York City on July 18, 2018. Please take note of the new month for 2018. Delivering Alpha continues to be an incomparable who’s who of the investor community with leading asset manager and institutional investors offering candid views along with illustrious political and economic commentators appearing in short segments moderated by CNBC talent and II editors.

To request additional information on Delivering Alpha, please contact lyao@ttivanguard.com.