24 JAN: Intelligence Lessons Learned from Principles by Ray Dalio (The ACE on Forward Observer Radio)

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On today’s show, we cover the usual Critical Intelligence and then get into a great book called Principles, by Ray Dalio. You can subscribe to The ACE on Forward Observer Radio on Spreaker, iTunes, Spotify, iHeartRadio, and other platforms.

SponsorReady Made Resources

Show Links

Principles by Ray Dalio

Thinking, Fast and Slow by Daniel Kahneman

Ray’s post on the Trump administration

SpaceX *EPIC* explosion blooper reel

 

Show Notes

On today’s show, we’re covering the usual Critical Intelligence and then I want to share some lessons learned from a new book I’m reading. Pretty interesting so far — Principles, by Ray Dalio. I’ll post a link on the show notes for everyone. Ray Dalio runs Bridgewater, which is the largest hedge fund in the world. And there are some very good lessons and insight into how we should do what we’re trying to do, especially in responding to emergencies and navigating the future. I’ll share his expectations for the Trump administration and how he sees the future shaping up.Ready Made Resources is our new sponsor. Bob’s a great guy and he’ll steer you right. I’ll be making some purchases myself in the coming weeks to finish out some gaps that I have. Maybe we can do an entire show on that sometime.

But today, we’re talking about Ray Dalio. Apparently, he’s kind of a big deal. I’d not heard of him until he started warning about Bitcoin, but I saw that he had a book out. The more I read about him the more I kind of realized that I should investigate what he’s saying. And I’m very glad I did.

This is not a book review, and although I haven’t finished it, I will recommend it to readers who want a different thinking perspective.

On the very first page, Dalio writes, “Whatever success I’ve had in my life has had more to do with my knowing how to deal with my not knowing than anything I know.”

Clear, concise and profound, if you ask me. That sentence alone is what sparked my interest to start really digging in this book, and I’m glad I did.

I’ve talked before about problem solving — and I think I first got this concept from Thinking, Fast and Slow, which is a book about our thought processes. Human beings are good at solving problems we’ve solved before. We’re okay at solving problems we’ve seen solved before. But most people aren’t good at solving problems we’ve never encountered. And that’s why structured thinking is so important. That’s what I hope to explain in the courses I teach; that we need structured analytic techniques so that our thinking and problem solving can be efficient. That’s my approach, but

Dalio talks about principles. Principles are a collection of directives that govern your life, so to speak. Some people don’t have any principles, for most people principles are intuitive and we don’t really enforce them all the time, unfortunately. Some — like Dailo — writes his principles down. He writes, “Principles are fundamental truths that serve as a foundation for behavior that gets you what you want out of life. They can be applied again and again in similar situations to help you achieve your goals.”

And this set of principles, at least for Dalio, helped him solve problems he’d never encountered. And as the CEO of a hedge fund that he started in his apartment, he’s encountered lots of those situations, as he describes in this book.
Daily even takes this one step further by writing down his decision-making criteria. He says that it really help him to reflect on his thinking prior to a large decision, so he could go back and maybe identify what led to the potentially poor decision.

And I think that’s a really valuable perspective in life, and especially so in the world of intelligence analysis. Because in intelligence, our brain is our tool. If we’re not improving that tool, then it’s like going into a firefight armed with a knife.

There are so many good insights in this book — I have this thing dog-eared, cover to cover. There are way too many to talk about in this how, and some are kind of personal about my own shortcomings, but I want to share a two more that really connected with me

Dalio writes about Elon Musk… pg 96

Dalio’s Principle 3.5 is about radical open-mindedness, which is important for us all, especially for our intelligence work at Forward Observer.

One bad habit I’ve formed personally is being judgmental about certain information. I read stuff all day, I can quickly sniff out fake news or quickly identify news that, eh, might not be as accurate as is being reported. And I’ve kind of developed a heuristic to arriving at those conclusions.

But part of radical open-mindedness, as opposed to closed-mindedness, should compel us to see things from different perspectives, even if we disagree.

And I’m reminded of acquaintance of mine on Facebook who’s predicting the beginning of industrial and societal collapse over the next few years. I’ve read some of his articles and I don’t disagree with the facts or evidence — the premise of the argument — but I do greatly disagree with his conclusion.

But Dalio’s writing on radical open-mindedness really encourages me to go back and give it another go. So maybe we’ll have him as a guest on the show to talk about the world as he sees it shaping up.

I don’t deny that there are darker days ahead. That’s clear through the current evidence and also confirmed through history. We will have a reversion to the mean; we will repeat history. So maybe I’ll hear this guy out once more.

Thanks again to Ready Made Resources. If you need to fill in some gaps, they should be your go-to source: readymaderesources.com.

That’s all the time we have for today. We’ll be back tomorrow. Stay out front.

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