Bet, Bath and Beyond
Insight and Principles are central tenets of Bridgewater Capital. Why is this ultra cool company so cold?
I should begin with the caveat that I know very little about the financial markets, placing me in some disadvantage to take it on. But if you add to the practices of notional investing, derivatives and credit swaps, the need for a psychiatrist, I am enticed to read on. Why? I would simply say that the latter is more ‘inside my wheelhouse’ and simply stop there.
The recent kerfuffle about a 2 or 3 billion dollar trade that lost it’s bet, aka as a ‘hedge’, meant that the bank, in this instance, ‘took a bath’.
Beyond this, the chairman of said bank said that traders should have a psychiatrist next to them as risk manager. Does this mean that a shrink on site might lower the possibility of shrinking investments?
Right here in our backyard is home to one of the largest, if not the largest hedge fund, the infamous Bridgewater Capital. By some accounts, Bridgewater has so many zeros attached to its holdings that it could save Greece and Spain and have change, lots of change. Net net, this is an alpha dog.
Bridgewater welcomes creative smart people, not just financial geeks.
The word ‘cult’ is unfairly used to describe the corporate culture, but it is clear that being moldable is a priori.
Starting with The Principles:
The Principles are the credo of the firm and outlined in the 123 page manifesto, written by Bridgewater’s founder, Ray Dalio. To know them is mandatory, but to love them is at the heart of the matter, or lack thereof. The Principles can be found on the Bridgewater website. They make for a good read, after you finish Atlas Shrugged.
Ray’s reputed to be eccentric, and his penchant for a dollar formed early, about age twelve, growing up on Long Island. His desire was to acquire and his solution was hard work. His outcomes cannot be disputed, though his management practices often are. Many reporters describe it in Lion Kingesque terms. The hyenas attacking the wildebeests. Hyperrealism and truth. Have you had yours today?
“I stress tested my opinions by having the smartest people I could find challenge them so I could find out where I was wrong ” can be found in Ray’s most fundamental life principles.
To identify and point out where an employee is wrong tests a person’s tolerance to criticism. This unique, or said differently, mean method to insight does not a one size fits all make. Yet the appeal to work for Bridgewater must eclipse the worry or concern of being nurtured or liked. Who would not chomp at the bit to be a part of, and to work alongside this elite group of winners? Isn’t the price it exacts on one’s own net worth psychically a small price to pay to be there?
One source told me she had been incredibly lucky to have worked for top tier financial companies, and, was consistently promoted and rewarded for successes BB, (‘before bridgewater’).
Perhaps Bridgewater has a reputation for writing the next chapter of success and, the litmus test to reveal the weaknesses that have made up a portion of one’s strengths. Those inside must ask themselves how they missed the adage, ‘ be careful what you wish for’, as they realize the ratio of positive to negative feedback is in inverse proportion to what most had been accustomed to. The ratio is likely to be 90% negative, 10% positive. Sounds like the needy and insecure types enter at their own risk! Attrition at Bridgewater is, not surprisingly, much higher than average.
As local teens were cramming for SAT exams in late April, Bridgewater employees were cramming to take the first Principles Exam. Administered under strict guidelines by the Principles Training Team (PTT), they warn:
- Think twice about calling in sick
- Cheating will be dealt with severely
The message and tone of the email sent is evidence enough of the firm’s truculence regarding their quest for truth, and, the ominous consequences of failure. Yikes. Being fired simply isn’t the worst that can happen?
For this prestigious firm, being praised isn’t standard fare. Positive reinforcement is dishonest – even fraudulent I suppose. Making nicey nice? Forgettabout it!
Bess Levin has written about Ray Dalio and Bridgewater titled: A Wildebeest leaves New York Traveling North at 10 MPH. A Hyena Leaves Westport Traveling South at 15MPH. At What Time Does the Wildebeest Get Eaten?. Read Bess Levin's article on dealbreaker.com. »
Linda Patscot has had a successful career as CEO for Pulse, a marketing research firm specializing in behavior and trend analysis for Fortune 500 companies. Her interest in politics and medicine inspired her to found BirthRoad, a consultancy helping intended parents explore 3rd Party Reproduction. She lives In Fairfield with her family where she is currently writing a book.
Linda can be reached at firstname.lastname@example.org