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Ray Dalio · The David Rubenstein Show

• 0:03
  Speaker 1: More than fifty years ago, a young Harvard physical graduate,
• 0:06
  Speaker 1: Ray Dalio started a hedge fund, Bridgewater. That fund became
• 0:10
  Speaker 1: the largest hedge fund in the world and one of
• 0:12
  Speaker 1: the most successful in the world. Over this period of time,
• 0:15
  Speaker 1: he's writing a number of books, and his most recent
• 0:17
  Speaker 1: book talks about his concern about debt in the United
• 0:19
  Speaker 1: States and around the world. I had a chance to
• 0:21
  Speaker 1: sit down with the Ray Dalio to talk about his
• 0:23
  Speaker 1: views about investing in recent months. One of the most
• 0:26
  Speaker 1: common things talked about is something called tariffs. What is
• 0:31
  Speaker 1: your view on tariffs? Is it good? Economically bad? Economic?
• 0:34
  Speaker 1: Is going to solve our budget problem because I think
• 0:36
  Speaker 1: in the big Beautiful Bill, a lot of money that's
• 0:39
  Speaker 1: coming in comes in from tariffs, and that helps reduce
• 0:42
  Speaker 1: the deficit a bit. TFS.
• 0:44
  Speaker 2: Tariffs are not bad.
• 0:47
  Speaker 3: Throughout history, tariffs were the main source of government revenue
• 0:51
  Speaker 3: and so on, And any form of taxes has its cost,
• 0:55
  Speaker 3: so capital gains taxes are bad, and so on. Different
• 0:59
  Speaker 3: things have their I think the question is how well executed,
• 1:05
  Speaker 3: how big are they, how disruptive of they in terms
• 1:08
  Speaker 3: of the process they can bring a significant There's something
• 1:11
  Speaker 3: to be said for them in that they bring in
• 1:13
  Speaker 3: a significant amount of revenue. That means that there's less
• 1:17
  Speaker 3: that's needed elsewhere. And we're now in a different world.
• 1:21
  Speaker 3: We're in a world where the world is almost at
• 1:25
  Speaker 3: war self sufficiency. We have to build self sufficiency. We
• 1:29
  Speaker 3: cannot continue to borrow or depend on imports for that.
• 1:34
  Speaker 3: And so there's a manufacturing how do you create manufacturing
• 1:37
  Speaker 3: in the United States and so on. There's some merit
• 1:40
  Speaker 3: to all of those arguments. The question is whether that
• 1:43
  Speaker 3: is done really well and so on for the whole world. Tariffs,
• 1:48
  Speaker 3: of course, are not the ideal you would like to have.
• 1:52
  Speaker 3: If you're deally what's best for the whole world. You
• 1:54
  Speaker 3: would like to have the least efficient inefficiency. You'd say
• 1:58
  Speaker 3: wherever they produce it the best, and we have it
• 2:01
  Speaker 3: go around. But we're in a world now that we
• 2:03
  Speaker 3: have to be realistic in terms of we cannot be
• 2:08
  Speaker 3: dependent on importing a lot of things, and nor can
• 2:12
  Speaker 3: the world be dependent on the value of the bonds
• 2:15
  Speaker 3: and the debt that we're acquiring in order to pay
• 2:17
  Speaker 3: for those things.
• 2:18
  Speaker 1: Well, the big beautiful bill that's now being talked about,
• 2:21
  Speaker 1: will that solve our problem or mitigated or what it? Will?
• 2:24
  Speaker 1: It do.
• 2:25
  Speaker 2: It's not going to solve our problem.
• 2:28
  Speaker 1: Okay, So if that's not going to solve our problem,
• 2:31
  Speaker 1: how are we going to solve this problem.
• 2:32
  Speaker 3: We're going to do it the way that we always
• 2:35
  Speaker 3: do it, and it's always done when countries essentially go broke,
• 2:39
  Speaker 3: what they do is they, through a combination of devaluing
• 2:44
  Speaker 3: the currency, printing of money there's an imbalance, print money
• 2:51
  Speaker 3: to value the currency, and create an artificially low interest
• 2:54
  Speaker 3: rate so that the person who's holding the bonds is
• 2:57
  Speaker 3: receiving of artificially low in interest rate. That's the way
• 3:01
  Speaker 3: Japan has done it with their local and that's the
• 3:04
  Speaker 3: way we will do it.
• 3:06
  Speaker 1: So, in other words, my grandchildren and great grandchildren not
• 3:09
  Speaker 1: yet born are going to be paying off this debt
• 3:12
  Speaker 1: in devalue dollars. More like going to happen faster than that.
• 3:16
  Speaker 1: Faster than that, Oh okay, I.
• 3:17
  Speaker 2: Think they'll probably be beyond that.
• 3:19
  Speaker 1: What about cutting interest rates? Why doesn't the chairman of
• 3:22
  Speaker 1: the Fed say, well, cutting interest rates will save us money.
• 3:25
  Speaker 1: We're spending at trillion dollars now on interest for our
• 3:27
  Speaker 1: own debt. Why don't we just lower the interest rate?
• 3:29
  Speaker 1: Why don't we just do that?
• 3:31
  Speaker 3: There is the real interest rate and one man's debts
• 3:34
  Speaker 3: or another man's assets. And so if I lower the
• 3:40
  Speaker 3: interest rate, I will reduce my desire to hold that bond.
• 3:45
  Speaker 3: And in my opinion, when if you do that too much,
• 3:50
  Speaker 3: you will lose the demand for those bonds you Unlike
• 3:56
  Speaker 3: if you do create something closer to the four per
• 4:00
  Speaker 3: cut in the expenditures, four percent increase in the tax revenue,
• 4:06
  Speaker 3: improve the balance, then you'll have a benefit. If you
• 4:09
  Speaker 3: try to force interest rates down, you were hurting those
• 4:12
  Speaker 3: who were holding the bonds, and you will lose the
• 4:15
  Speaker 3: demand for the bonds and you can create that spiral.
• 4:17
  Speaker 1: Before we finish this discussion, I want you to just
• 4:20
  Speaker 1: inter erupt it of for a moment and say, look,
• 4:23
  Speaker 1: you've scared me a bit, but I need to make money.
• 4:27
  Speaker 1: I'm an investor. What should I do to take advantage
• 4:30
  Speaker 1: of what you just described and scared me. Should I
• 4:32
  Speaker 1: go buy gold? Should I go buy dollars? Buy euros?
• 4:36
  Speaker 1: What should I do?
• 4:37
  Speaker 3: Look at the value of your portfolio in inflation adjusted terms,
• 4:42
  Speaker 3: not in nominal terms. Okay, And the safest investment that
• 4:47
  Speaker 3: you can get right now is an inflation index bond.
• 4:51
  Speaker 3: Because what you'll get is it'll be indexed and you'll
• 4:55
  Speaker 3: get a bit over two percent real return above inflation
• 4:59
  Speaker 3: and whatever happen. So you start with what is a
• 5:02
  Speaker 3: safe investment. The next thing I think you have to
• 5:06
  Speaker 3: do is diversify your portfolio. We've talked about the powers
• 5:11
  Speaker 3: of diversification. So I don't want to get anybody into
• 5:15
  Speaker 3: one bet because I'm going to be wrong. But do
• 5:18
  Speaker 3: consider that gold is a form of money and gold
• 5:23
  Speaker 3: is that central banks are acquiring gold now as a diversifier,
• 5:30
  Speaker 3: and so in your it also is negatively correlated with
• 5:34
  Speaker 3: most of the things that you have. In a time
• 5:36
  Speaker 3: of great stress, what you'll find is that the gold
• 5:39
  Speaker 3: will do well and when the assets don't. The world
• 5:43
  Speaker 3: used to have gold as money. That was the way,
• 5:46
  Speaker 3: and so the world would look at things differently. They
• 5:49
  Speaker 3: would look at the prices of things in gold terms. Now,
• 5:54
  Speaker 3: because we have fiat money and we've become used to it,
• 5:57
  Speaker 3: we look at the prices of things in money terms,
• 6:01
  Speaker 3: and we look at gold that way. I think if
• 6:03
  Speaker 3: you started to say it's money, it's a source of money,
• 6:06
  Speaker 3: and you have that that's part of the diversify. So
• 6:09
  Speaker 3: it would diversify your portfolio. It's a prudent thing to
• 6:13
  Speaker 3: have somewhere between ten or fifteen percent of your portfolio
• 6:16
  Speaker 3: and gold.
• 6:17
  Speaker 1: For thousands of years, people have liked gold, and people
• 6:20
  Speaker 1: still seem to like gold. Price of gold are going up.
• 6:22
  Speaker 1: Why are people so interested in owning gold in a
• 6:25
  Speaker 1: time like this?
• 6:27
  Speaker 3: Since seventeen fifty eighty percent of the world's moneies have
• 6:32
  Speaker 3: disappeared and all of those that existed have been greatly devalued.
• 6:38
  Speaker 3: That's one of the reasons that gold is a storehold
• 6:42
  Speaker 3: of wealth and has been for a long time. And
• 6:45
  Speaker 3: there's a saying that gold is the only asset that
• 6:48
  Speaker 3: you can have that's not somebody else's liability, And what
• 6:50
  Speaker 3: they mean by that is that you don't have to
• 6:53
  Speaker 3: receive money from somebody else. In the world that we're
• 6:57
  Speaker 3: now in and we're seeing it internationally, worry about sanctions,
• 7:01
  Speaker 3: there's a worry about taking gold. Those holders central banks
• 7:05
  Speaker 3: around the world are concerned about the possibility that let's say,
• 7:10
  Speaker 3: what happened to Russia could happen to them, and so on.
• 7:13
  Speaker 3: So there's a diversification of that, and it creates a
• 7:17
  Speaker 3: dynamic in and of itself because what happens is if
• 7:20
  Speaker 3: they are switching, and they are switching to gold away
• 7:25
  Speaker 3: from bonds and so on, then that has the effect
• 7:29
  Speaker 3: of not only making our supply demand balance that we're
• 7:32
  Speaker 3: talking about about the new deficit, it means that you
• 7:36
  Speaker 3: can have the selling of gold, which makes that supply
• 7:38
  Speaker 3: demand balance worse.
• 7:40
  Speaker 2: Now.
• 7:40
  Speaker 1: It used to be the case that the US dollar
• 7:42
  Speaker 1: was backed by gold, and the US government said, if
• 7:45
  Speaker 1: you don't like these pieces of paper, we'll give you gold,
• 7:48
  Speaker 1: and ultimately we ended that we're never going to go
• 7:51
  Speaker 1: back to that.
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  Speaker 3: Presumably right, probably, presumably that's right, but not if you
• 7:55
  Speaker 3: watch these gold site these cycles, because you have the
• 7:59
  Speaker 3: deval euasion, then people feel don't have confidence in the
• 8:04
  Speaker 3: fiat system. Over a period of time and through history,
• 8:08
  Speaker 3: they've at that point. The way that works is you
• 8:11
  Speaker 3: print all this money, then you pray the debt with
• 8:13
  Speaker 3: the cheap money, but nobody wants to hold it, so
• 8:17
  Speaker 3: then they go back and link it again. It is
• 8:19
  Speaker 3: conceivable that you can see a relinking of gold to money,
• 8:25
  Speaker 3: but that's way in the future.
• 8:27
  Speaker 1: Since the beginning of this year, the dollar against the
• 8:30
  Speaker 1: basket of currencies is down about ten percent. Many people
• 8:33
  Speaker 1: are worried that they might continue that way devalued. Some
• 8:37
  Speaker 1: people say it's not a bad thing because we can
• 8:38
  Speaker 1: sell things more cheaply overseas and increase our exports. But
• 8:42
  Speaker 1: if people are worried about the dollar going down in value,
• 8:45
  Speaker 1: what would you suggest they do buy other currencies or
• 8:48
  Speaker 1: go buy things that are not dollar denominated.
• 8:50
  Speaker 3: I think their concern would be some version very similar
• 8:54
  Speaker 3: to the seventies you just talked about. I remember I
• 8:57
  Speaker 3: was clerking on the floor of the New York Stock
• 8:59
  Speaker 3: Exchange John August fifteenth, nineteen seventy one, and that is
• 9:03
  Speaker 3: when Richard Nixon got on the television and he said,
• 9:07
  Speaker 3: in his polite way, this was a wonderful move. But
• 9:11
  Speaker 3: the money that you thought you had, the gold was money,
• 9:16
  Speaker 3: and what at the time people thought were real, the
• 9:19
  Speaker 3: money that we're used to, they would say, or like
• 9:21
  Speaker 3: checks in the checkbook. They said, you're not going to
• 9:23
  Speaker 3: get your money, you can keep the checks. At that point,
• 9:27
  Speaker 3: then we began the seventies, and the seventies was a
• 9:30
  Speaker 3: period in which there was both stagflation. The thing that
• 9:34
  Speaker 3: we have to worry about is a stagflationary environment because
• 9:38
  Speaker 3: all the currencies went down. So when you were looking
• 9:41
  Speaker 3: at diversification. The problems that we're talking about are not
• 9:45
  Speaker 3: just American problems. We have a significant problem. But if
• 9:49
  Speaker 3: they're European problems, they're Japanese problems. There's Chinese problems. No,
• 9:56
  Speaker 3: we've lived on promises to be able to take that
• 10:00
  Speaker 3: dead asset and converted into money, and now there's not
• 10:03
  Speaker 3: enough money to go around. So I would say that
• 10:07
  Speaker 3: when you ask the question, would I value in relationship
• 10:11
  Speaker 3: to other currencies? Probably, but the other currencies won't want
• 10:15
  Speaker 3: much of an appreciation, and so that's why I'm saying
• 10:18
  Speaker 3: that something like gold will be the better performing currency.
• 10:21
  Speaker 1: Some people worry about this and can tell us whether
• 10:24
  Speaker 1: this is realistic or not. In nineteen eighty five, there
• 10:26
  Speaker 1: was something called Applause Accords where the United States government
• 10:31
  Speaker 1: agreed with other governments that we were going to devalue
• 10:34
  Speaker 1: the dollar illegally officially, and it was done in secret.
• 10:37
  Speaker 1: Nobody knew it was coming. Is that possibly that the
• 10:40
  Speaker 1: government of the United States could again agree with other
• 10:42
  Speaker 1: governments we're going to devalue the dollar further. You think
• 10:44
  Speaker 1: that's unlikely these days?
• 10:47
  Speaker 2: No, I think it's a possibility. Yes.
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  Speaker 3: It's so interesting in history when you look at what
• 10:54
  Speaker 3: happens when governments are in certain positions through history, they
• 11:01
  Speaker 3: do the same things, okay, And that means that a
• 11:05
  Speaker 3: move like that, or even there could be foreign exchange controls,
• 11:09
  Speaker 3: there can be different ways.
• 11:12
  Speaker 2: That that that happens.
• 11:15
  Speaker 1: Now, my perception is that people in Washington always say, well,
• 11:19
  Speaker 1: if a situation was that bad, the bond market would collapse.
• 11:22
  Speaker 1: And then the bond market people say, well, the situation
• 11:24
  Speaker 1: that bad, Congress wouldn't do this, and they both kind
• 11:26
  Speaker 1: of blame each other for not doing anything. Why hasn't
• 11:29
  Speaker 1: the bond market collapsed? Ever, the fact that we have
• 11:32
  Speaker 1: all this debt over all these years.
• 11:34
  Speaker 3: You don't like to say I've experienced this many times.
• 11:40
  Speaker 3: I did this analysis in two thousand and seven and eight,
• 11:44
  Speaker 3: I went to Congress and everybody said they asked me
• 11:47
  Speaker 3: the same question, but we had the problem. Same thing
• 11:50
  Speaker 3: happened in Europe. So there's a supply demand, there's a saying.
• 11:54
  Speaker 3: You know that everything goes slowly until it happens all
• 12:00
  Speaker 3: at once when the problem happens. You know, these things
• 12:04
  Speaker 3: happen like that.
• 12:06
  Speaker 1: How long did it take you to write this book?
• 12:08
  Speaker 1: This is how many books have you now written? For four, Okay,
• 12:13
  Speaker 1: And how long did it take to write a book
• 12:14
  Speaker 1: like this?
• 12:15
  Speaker 3: This is research that I've done over a long period
• 12:18
  Speaker 3: of time, So putting it together and getting it out,
• 12:21
  Speaker 3: you know, I would say at part time basis, maybe
• 12:25
  Speaker 3: over a year.
• 12:26
  Speaker 1: Hey, so you built the biggest hedge fund in the world.
• 12:29
  Speaker 1: What's the relative pleasure of building the biggest hedge fund
• 12:31
  Speaker 1: in the world versus writing a book that's a bestseller?
• 12:35
  Speaker 3: As you would know, probably it's a stage in life thing.
• 12:38
  Speaker 3: You know, there's a stage in life where you know,
• 12:41
  Speaker 3: you compete and you build something, and then there's a
• 12:43
  Speaker 3: stage in life where you're passing things along.
• 12:46
  Speaker 2: You know.
• 12:47
  Speaker 3: So at this stage in life, you and your way,
• 12:49
  Speaker 3: me and my way. It's a great, great joy to
• 12:53
  Speaker 3: be able to pass along what I've learned. So I'm
• 12:56
  Speaker 3: loving it.
• 12:57
  Speaker 1: This book is designed to make people feel good or
• 13:00
  Speaker 1: to scare.
• 13:00
  Speaker 2: People, neither.
• 13:04
  Speaker 3: I wanted to convey the mechanics the cause effect relationships
• 13:09
  Speaker 3: so that people can understand what's going on and then
• 13:11
  Speaker 3: navigating it. I think it's a book that will make
• 13:16
  Speaker 3: people worry. But I have a principle which is, if
• 13:19
  Speaker 3: you worry, you don't have to worry. And if you
• 13:21
  Speaker 3: don't worry. You need to worry, because if you worry
• 13:25
  Speaker 3: about something, then maybe you'll prevent what you're worrying about.
• 13:29
  Speaker 1: When did you decide to become a writer as opposed
• 13:33
  Speaker 1: to just an investor? I mean a lot of great
• 13:35
  Speaker 1: hedge funt investors just keep sitting in front of screens
• 13:38
  Speaker 1: and so forth. When did you say I want to
• 13:40
  Speaker 1: do more than sitting in front of screens. Was that
• 13:43
  Speaker 1: a couple of years before you decided to exit Bridgewater?
• 13:48
  Speaker 3: No, it was maybe thirty five forty years ago. What
• 13:51
  Speaker 3: I learned was that if I was whenever I was
• 13:55
  Speaker 3: making decisions, if I would pause and reflect and write
• 13:59
  Speaker 3: down the cry that I would use to make that decision,
• 14:03
  Speaker 3: it would make me think more deeply about it. And
• 14:05
  Speaker 3: then I learned that I could put those into code
• 14:09
  Speaker 3: and then back test them so I would know how
• 14:11
  Speaker 3: my decision making would work. And so right from then
• 14:14
  Speaker 3: thirty five years ago, that's how really I built Bridgewater
• 14:18
  Speaker 3: was what are the criteria? Test the criteria over a
• 14:22
  Speaker 3: period of time, and then form a game plan. So
• 14:25
  Speaker 3: I'd say, thirty five years ago, I've written down I
• 14:27
  Speaker 3: call these things principles.
• 14:29
  Speaker 2: I've written down. Probably you know, I don't know a
• 14:33
  Speaker 2: thousand of them or something.
• 14:34
  Speaker 1: For those who haven't followed the hedge fund world. You're
• 14:38
  Speaker 1: from Long Island, you went to Long Island University. You
• 14:42
  Speaker 1: would say you were not a superstar in high school.
• 14:44
  Speaker 1: On the contrary, but you did very well at Long
• 14:47
  Speaker 1: Island University, and eventually you got in the Harvard Business
• 14:50
  Speaker 1: Goal and you started your career, and your career almost
• 14:53
  Speaker 1: went south when you punched your boss in the mouth, right, No,
• 14:57
  Speaker 1: that was.
• 14:57
  Speaker 3: My opportunities began, and I got fired when I got fired,
• 15:03
  Speaker 3: then I got fired.
• 15:04
  Speaker 1: You started your own firm, and you borrowed some money
• 15:07
  Speaker 1: at some point from your father because the firm hadn't
• 15:10
  Speaker 1: done that well. And what did you ever think that
• 15:12
  Speaker 1: maybe you weren't going to make it? And at the
• 15:14
  Speaker 1: point did you were?
• 15:15
  Speaker 3: So yeah, let me tell you about that incident because
• 15:18
  Speaker 3: it was one of the worst cases and one of
• 15:22
  Speaker 3: the best cases for me. So this is nineteen eighty
• 15:27
  Speaker 3: eighty one, and I had calculated that the United States
• 15:30
  Speaker 3: lent more money to countries than they're going to be
• 15:32
  Speaker 3: able to pay back, and that there would be a
• 15:35
  Speaker 3: big debt crisis, and then in that happened Volker type money.
• 15:42
  Speaker 3: Nineteen eighty two, Mexico defaults on its dead and I
• 15:48
  Speaker 3: got a lot of attention because I anticipated this and
• 15:52
  Speaker 3: I thought I was right and I couldn't have been
• 15:55
  Speaker 3: more wrong.
• 15:55
  Speaker 2: I thought we were going to have a.
• 15:56
  Speaker 3: Big economic crisis because of this, and what happened in
• 15:59
  Speaker 3: stead was the stock market went up, they eased monetary policy,
• 16:05
  Speaker 3: and I have a terrible.
• 16:07
  Speaker 2: Mistake and it cost me money.
• 16:09
  Speaker 3: I was so broke that I had to borrow four
• 16:11
  Speaker 3: thousand dollars from my dad in order to pay for
• 16:14
  Speaker 3: family bills. And this was painful, and that changed my
• 16:18
  Speaker 3: approach to everything two ways.
• 16:20
  Speaker 2: Two ways.
• 16:21
  Speaker 3: First, it made me think, how do I know I'm right?
• 16:25
  Speaker 3: It gave me the humility I needed to balance with
• 16:28
  Speaker 3: my audacity, and it let me understand how do I
• 16:31
  Speaker 3: play this game going forward? And I understood the power
• 16:35
  Speaker 3: of diversification and how diversification could reduce risk by up
• 16:40
  Speaker 3: to eighty percent without reducing returns. And that was then
• 16:44
  Speaker 3: the bottom of Bridgewater, and then from then on it
• 16:47
  Speaker 3: was straight because of the lesson I learned. Writing down
• 16:50
  Speaker 3: these things and these experiencing and making the most out
• 16:52
  Speaker 3: of mistakes as learning experiences has been sir an investor.
• 16:56
  Speaker 1: You always have ups and downs. Nobody does everything perfectly,
• 16:59
  Speaker 1: not even buffet right.
• 17:00
  Speaker 3: But you know what changed that from that point the
• 17:04
  Speaker 3: returns were in my thirty some one years since of
• 17:10
  Speaker 3: doing that, since that point, it was I think about
• 17:13
  Speaker 3: eleven point eight percent return with no year down significantly
• 17:20
  Speaker 3: other than two thousand, twenty twenty during COVID and that
• 17:26
  Speaker 3: was down thirteen percent, but the other years were down
• 17:28
  Speaker 3: like two percent. Because I learned the power of diversification.
• 17:33
  Speaker 3: You know, one of the things about diversification is that
• 17:37
  Speaker 3: you can reduce the returns the risks without reducing the
• 17:42
  Speaker 3: turn My mantra is fifteen good uncorrelated return streams because
• 17:49
  Speaker 3: if you if they engineered to have about the same
• 17:53
  Speaker 3: expect the return and you have that kind of diversification,
• 17:57
  Speaker 3: you will lower the risk by about eighty percent, which
• 18:00
  Speaker 3: raises the return to risk ratio by a factor of five.
• 18:04
  Speaker 2: So that's the power of the game plan. That's what
• 18:09
  Speaker 2: helped me.
• 18:09
  Speaker 1: You want to get the deficit down the three percent
• 18:11
  Speaker 1: of GDP? Yeah, you want to do it three ways.
• 18:14
  Speaker 1: Cut the interest rates, cut spending, and increase.
• 18:19
  Speaker 2: Taxes each bi mondus amounts right, and do it.
• 18:22
  Speaker 1: Over three years, yes, three, three to three. Okay, what's
• 18:26
  Speaker 1: the chance of that happening?
• 18:30
  Speaker 2: Okay, five percent?
• 18:32
  Speaker 1: Right, you've been in Washington.
• 18:34
  Speaker 2: I was in Washington the other day.
• 18:36
  Speaker 1: Okay, and members of Congress tell you this is a
• 18:38
  Speaker 1: brilliant idea. We wish we had thought of it, and
• 18:40
  Speaker 1: we're going to do this.
• 18:41
  Speaker 3: I'll tell you what members of Congress tell me, which
• 18:44
  Speaker 3: is very interesting both sides. Nobody agree. Nobody disagrees with
• 18:49
  Speaker 3: what I just said. It's very interesting. They all agree
• 18:53
  Speaker 3: that has to go to three percent. They all agree
• 18:55
  Speaker 3: it has to come from those three things and so on.
• 18:58
  Speaker 3: And then they say, but I can't say that because
• 19:01
  Speaker 3: we're now in an absolutist political environment in which if
• 19:08
  Speaker 3: I say they want the public, my electorate wants me
• 19:12
  Speaker 3: to say, I will take a pledge of no new taxes.
• 19:15
  Speaker 3: So because of that absolute if you don't take a pledge,
• 19:19
  Speaker 3: then it's like this with the constituents. The constituents say
• 19:22
  Speaker 3: something like, are you telling me that you're going to
• 19:26
  Speaker 3: compromise with those people and you're going to raise my taxes? Okay,
• 19:30
  Speaker 3: no way, I don't want you in government. And so
• 19:33
  Speaker 3: they won't convey what they truly believe.
• 19:36
  Speaker 1: What about yourself? Why don't you go into government? Why
• 19:39
  Speaker 1: have you thought about you're being secretary Treasury, chairman of
• 19:42
  Speaker 1: the Federal Reserve, run for the Senate or something, and
• 19:44
  Speaker 1: solve those problems while you're in government. Have you ever
• 19:46
  Speaker 1: thought of that scares.
• 19:47
  Speaker 2: The Daylight's Adam.
• 19:51
  Speaker 3: Let me say, I have the greatest appreciation and respect
• 19:55
  Speaker 3: for those who go into public service and serve in
• 19:58
  Speaker 3: this kind of an environment. And I think there's a
• 20:02
  Speaker 3: question of whether with the population. It's not just a
• 20:06
  Speaker 3: leadership question, it's a can you lead question? You can
• 20:10
  Speaker 3: bring capable people into that job. But we're in a
• 20:14
  Speaker 3: situation where everybody's fighting over every decision all the time
• 20:18
  Speaker 3: and will tear everybody down if they're so it's a
• 20:22
  Speaker 3: very difficult situation.
• 20:23
  Speaker 1: Now somebody is watching, they say, I want to be
• 20:25
  Speaker 1: the next Ray Dalio who builds a gigantic hedge fund,
• 20:28
  Speaker 1: does well financially, well respected by people, writes best selling books.
• 20:33
  Speaker 1: What's the secret to that? What do you do?
• 20:35
  Speaker 3: Make your work and your passion the same thing, and
• 20:38
  Speaker 3: don't forget about the money part. In other words, I
• 20:41
  Speaker 3: didn't work for money, but I had a passion. I
• 20:43
  Speaker 3: fell in love with the game of investing, and I
• 20:46
  Speaker 3: think you have to make your work and your passion
• 20:49
  Speaker 3: the same thing. But you do have to pay attention
• 20:51
  Speaker 3: to the money part, because if you're not earning an
• 20:54
  Speaker 3: adequate amount of money, then that's a problem. So and
• 20:57
  Speaker 3: I don't think the best life is for them those
• 21:00
  Speaker 3: who will make the most amount of money. There's a
• 21:02
  Speaker 3: very low correlation between the level of happiness or well
• 21:06
  Speaker 3: being past the basic level of income.
• 21:10
  Speaker 1: The highest Really, you're just telling me that, now, wow, well.
• 21:15
  Speaker 3: We know that which has the highest level of happiness
• 21:20
  Speaker 3: and well being generally is a sense of community. Do
• 21:23
  Speaker 3: you have a sense of community your friends in that community.
• 21:26
  Speaker 3: But anyway, I would say, don't over exaggerate the power
• 21:29
  Speaker 3: of money. You need to have enough and you have
• 21:31
  Speaker 3: to pursue your passion. And you know, have enough money
• 21:36
  Speaker 3: and if if it's if it's it's never work. If
• 21:40
  Speaker 3: you're pursuing your passion.
• 21:41
  Speaker 1: What do you think is the best investment vehicle for
• 21:44
  Speaker 1: a middle class American? That is risk adverse and inflation
• 21:49
  Speaker 1: index bond, which is index fund tips.
• 21:53
  Speaker 3: Treasury inflation protected securities, because it will guarantee you a
• 21:59
  Speaker 3: real return. And I don't think that you should be
• 22:04
  Speaker 3: speculating in the markets because there's a zero sum game
• 22:07
  Speaker 3: and you'll probably be the loser.
• 22:09
  Speaker 1: So, as we get ready to celebrate next year the
• 22:11
  Speaker 1: two hundred and fiftieth anniversary of this country, are you
• 22:14
  Speaker 1: optimistic about our future or is the debt problem so
• 22:17
  Speaker 1: concerning to you? You're not optimistic about our future.
• 22:19
  Speaker 3: I think it's a time horizon we're going to go.
• 22:22
  Speaker 3: I think we can deal with this. I think it
• 22:27
  Speaker 3: comes down to how we are with each other. But
• 22:29
  Speaker 3: we will go through this and we will get to
• 22:33
  Speaker 3: the other side.
• 22:35
  Speaker 1: And when you go meet with members of Congress or
• 22:37
  Speaker 1: other people in government and you talk about these serious
• 22:40
  Speaker 1: issues of debt and depicts and so forth, do they
• 22:42
  Speaker 1: listen and then they say, by the way, what should
• 22:44
  Speaker 1: I do with my own money? They ever ask you
• 22:45
  Speaker 1: how they should invest their money, or they never ask
• 22:48
  Speaker 1: you for investment tips, not typically. Now, what about when
• 22:51
  Speaker 1: you go to a cocktail party, people ask you for
• 22:53
  Speaker 1: investment ideas all the time.
• 22:55
  Speaker 2: Here and there. I guess, let me reverse the question,
• 22:57
  Speaker 2: what do they do with you?
• 22:59
  Speaker 1: Well, I'm not as good an investor as you are.
• 23:01
  Speaker 2: So well it worked out pretty good.
• 23:04
  Speaker 1: They mostly say to me, do you know Ray Dalio. So, Ray, look,
• 23:11
  Speaker 1: I'd like to congratulate you on your incredible success. You
• 23:14
  Speaker 1: came from very modest means, worked your way up fifty
• 23:17
  Speaker 1: years as an investor, built the biggest hedge fund in
• 23:19
  Speaker 1: the world, and you've contributed a lot to endowments and
• 23:22
  Speaker 1: others who've been your investors. So you should be very
• 23:24
  Speaker 1: proud of what you've achieved. And now I hope you
• 23:26
  Speaker 1: can make some progress in Washington. I've been living there
• 23:29
  Speaker 1: for a while. It's not that easy to make progress,
• 23:31
  Speaker 1: as you know, but hopefully you'll continue and maybe some
• 23:33
  Speaker 1: people will say they don't want to get reelected, they
• 23:35
  Speaker 1: just want to do the right thing. Hopefully you'll commit them.
• 23:38
  Speaker 1: Thanks very much, Thank you. Thanks for listening to hear
• 23:44
  Speaker 1: more of my interviews. You can subscribe and download my
• 23:47
  Speaker 1: podcast on Spotify, Apple, or wherever you listen.