You're allowed to change your mind
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Changing your mind isn’t the problem. It’s that most people don’t trust themselves enough to do it out loud.
In 1982, Ray Dalio went on television, wrote newspaper columns, and testified before the United States Congress to declare that a depression was coming. He was 33 years old and running a small hedge fund called Bridgewater Associates, and he was absolutely certain he was right.
His research checked out. The Fed was tightening, debt was stacking up everywhere, and when Mexico defaulted that August, it looked like the dominoes were starting to fall exactly the way he’d predicted. He told anyone who would listen.
Then the Fed cut rates. Markets rallied. The depression never came. Instead, the U.S. entered the greatest noninflationary growth period in its history. Dalio hadn’t just been wrong. He’d been wrong on television, in major newspapers, and on the Congressional record. The kind of wrong you can’t walk back over coffee.
He lost his clients’ money and then his own. He had to let go of everyone at Bridgewater until it was just him, alone in his office, with a desk and a phone that had stopped ringing. He borrowed $4,000 from his dad to pay his family’s bills. He was 33 with a wife and two young kids, and he later said it was the most painful experience of his life.
That part of the story gets told a lot. Rags to riches via rock bottom. What doesn’t get told enough is what Dalio did next, because it’s the part that matters for the rest of us.
