I worked with Ferrucci in BW. The internals of the employee rating system that preceded him were hilarious. In short:
Everyone is encouraged to rate anyone else in a variety of categories, as often as possible. Every rating is public. You know who is rating you, and how they did it. Those ratings are put together to get a score in every category, and can be seen by anyone. It's your Baseball Card.
The problem is that not everyone is equally 'credible' in their rating. If I am bad at underwater basketweaving, my opinions on the matter are useless. But if I become good, suddenly my opinion is very important. You can imagine how, as one accumulates ratings, the system becomes unstable: My high credibility makes someone else have bad credibility, which changes the rankings again. How many iterations do we run before we consider the results stable? Maybe there's two groups of people that massively disagree in a topic. One will be high credibility, and the other bad, and that determines final scores. Maybe the opinion of one other random employee just changes everyone else's scores massively.
So the first thing is that the way we know an iteration is good involves whether certain key people are rated highly or not, because anything that, say, said that Ray is bad at critical thinking is obviously faulty. So ultimately winners and losers on anything contentious are determined by fiat.
So then we have someone who is highly rated, and is 100% aware of who is rating them badly. Do you really think it's safe to do that? I don't. Therefore, if you don't have very significant clout, your rating of people should be simple: Go look at that person's baseball card, and rate something very similar in that category. Anything else is asking for trouble. You are supposed to be honest... but honestly, its better to just agree with those that are credible.
So what you get is a system where, if you are smart, you mostly agree with the bosses... but not too much, as to show that you are an independent thinker. But you better disagree in places that don't matter too much.
If there's anything surprising, is that more people involved into the initiative stayed on board that long, because it's clear that the stated goals and the actual goals are completely detached from each other. It's unsurprising that it's not a great place to work, although the pay is very good.
Also in the Vanity Fair there’s an extract from the new book about the time the future FBI director was snooping for employees’ dirty laundry at Dalio’s hedge fund and conducting year-long show trials:
“Inside James Comey’s Bizarre $7M Job as a Top Hedge Fund’s In-House Inquisitor” https://www.vanityfair.com/news/2023/11/james-comey-dalio-br...
It’s every bit as strange as it sounds.
Very funny. If it's true that all the talk of computers and statistical modelling at Bridgewater is bullshit, and it's just a vanilla hedge fund, then it reminds me of the story from The Man Who Solved the Market that Renaissance was founded as a quant fund but none of the algorithms actually worked, so Simons just traded on hunches until D.E Shaw started competing with them years later.
Patrick Boyle posted an interview on this topic with the author of the article just an hour ago - https://www.youtube.com/watch?v=bb5kngSrrsw
I wonder when they actually do their work. I mean, if you're constantly evaluating your colleagues and their work, when do you find the time to get your own work done? Or are you just making up numbers for these evaluations?
I've heard a lot about Bridgewater and frankly don't understand how they hire anyone. If you're smart enough to get offers at top-tier funds surely you'd rank BW last because of this (very public) insanity.
Have they just resigned themselves to the uphill battle?
I interviewed at Bridgewater a few years ago. I ended up passing on the job but it was tempting.
I love the idea of strong feedback. I've always wanted work to feel like I'm lifting weights with my buddies: We constantly critique each other. We all want to get better and any advice or critique is welcome.
In general, withholding criticism is a sign that either:
1. The person needing advice is more concerned with their ego than actually getting better. They get mad about criticism or find it hurtful.
2. The person who is withholding advice either has nefarious purposes, has a low option of you (they assume you fall into category 1), or simply doesn't care about helping you.
Criticism is the respectful, professional thing to do. It assumes the best in people - that they're trying their best and want to get better.
You shouldn't be an asshole by the way. If you phrase your criticism in a way where someone is likely to get defensive then it's less likely to be effective. Empathy is an important skill in teaching.
After years spent working with companies in SF - where criticism is generally avoided at all costs - Bridgewater piqued my interest.
I tried to discern if Bridgewater shared my outlook but, ultimately, I just couldn't tell. I asked extremely pointed questions - uncomfortable things I wouldn't normally ask in an interview. But I figured they wanted radical candor, right?
I asked every interviewer things like "How important is making sure people actually hear this criticism?", or "Couldn't people just use this as an excuse to be a jerk?". All the answers were wishy-washy.
Plus, they force constant feedback. More feedback is good. But constant? It felt like it'd be, at best, distracting. And at worst, like it would lead to a lot of false criticism. If you _have_ to criticize, even if you don't have an opinion, then are you really making people better?
In the end I got the impression that they value criticism for the sake of criticism. And it generally seemed like giving criticism was more highly valued than ensuring people actually heard what you were saying (communication skills and empathy weren't emphasized). They'd confused the forest for the trees.
I mellowed out when I realized crystal energy chasers and systems peddled by MBAs were equally unsubstantiated and unfalsifiable, seeking answers to the same things: fulfillment and productivity
I love the pee story here.
A long time ago I was friends with a facilities person at Apple. She told of a peculiar case where she was called in to take care of a problem in one of the conference rooms. Apparently someone had not thought a meeting had gone well. That evening they had returned to the conference room and taken a dump on the table. Message received.
Maybe someone was trying to send a Ray a message with a puddle of pee:)
Wait until you hear about "dot collector". Any Bridgewater veterans care to comment?
There was a NYT article about Bridgewater and Dalio last week: https://www.nytimes.com/2023/11/01/business/how-does-the-wor...
If these articles are right, the picture I'm coming away with is that Dalio had some good strategies that gave him an edge decades ago but now his competitors have caught up and pulled ahead. Apparently Bridgewater no longer has any quantitative edge and it's really just Dalio and a few close advisors making calls from the gut. Plus all this weird nonsense about "principles".
Ugh, I had a recruiter approach me a couple of years ago to work for some company that had a "radical openness" culture or something like that. The idea was supposedly that everyones ideas were valid and hierarchy didn't matter and that everyone should challenge anything no matter who they were in the organisation.
The way they sold it sounded a bit culty to me, and the potential for abusive behaviour seemed high. Didn't make me want to work for them.
> The truth is that at Bridgewater, some are more equal than others. And Ray Dalio is the most equal one of all.
Major Animal Farm vibes.
The fact that Ferrucci didn’t immediately see through this insanity makes me question his supposed genius. Like the job was never to make some ultra-intelligent system, the job was to stroke the CEO’s ego by saying “Look, hard math proves that you’re the smartest guy in the room.”
Who is doing the trading? It seems like making money is almost an afterthought and other traders can't seem to find these Bridgewater whale trades.
Is it all a front or a Madoff situation?
With enough money and power, a crazy asshole can get people to work towards any premise, whether they believe in it or not.
We want meritocracy, and in theory we reward merit with capital and power. But merit can change quickly - and power tends to corrupt and reduce merit - while power and capital remain.
From the article's description, CEOs like to flaunt their corruption and lack of merit these days.
I had an ex-Bridgewater colleague a couple jobs ago, who brought “Radical Transparency “ with him.
One on one he was a nice enough guy, and he was super smart. In meetings or as a manager he was a nightmare and left a dumpster fire of problems in his wake including driving off nearly his whole team.
I feel like 75% of the CEOs I've met have essentially been this high on their own supply, they just been the tyrants of smaller kingdoms than Bridgewater.
Most of these hedge funds CEOs are psychopaths and completely unfit to be in the society if it wasn’t for the wealth they have, a lot of people used to put up with that but since COVID, a lot have been changed, that’s why they hate the remote work, it doesn’t feed their narcissistic egos.
This may have been just a stupid delusion by Dalio but some day one of these sociopaths is gonna get their hands on the wrong AI model and end us all.
The necessary precondition of private individuals side stepping democratic control via their unchecked powerful organizations is already established. Gotta hope for the whistleblowers...
> His main interest, as he wrote in his best-selling autobiography-cum–self-help book, Principles: Life and Work, is to lead others toward “meaningful lives” and “meaningful relationships.”
…
> Staffers were given iPads and directed to rank one another on a one-to-ten scale on their performance dozens of times per day in categories derived from Dalio’s Principles
…
> The goal of all the data, Dalio would say, was to sort everyone at Bridgewater on a single scale.
———
Truly they’ve stumbled on the heart of human connection and meaning.
"Dalio would often review the results in his office ... chewing on Scotch tape, as was his habit when he was concentrating..."
This article really buried the lede here
I stopped listening to Ray Dalio when he trotted out the meme about out of control crime in big cities at the beginning of one interview or another. I don't know if he's lazy, or out of touch, but I don't like it when people are fast and loose with extremely verifiable information. Like, maybe you have expert intuition the future of inflation, that's great; but if you're going to talk about extremely verifiable information, like per-capita crime rates in American cities, then you should have your facts straight.
"Scientology, but for hedge funds!"
Man, this feels like something out of Severance. Creating an AI model of Dalio to properly rank employees according to tenants? What the hell?
It’s sad to see so many person/hours wasted spinning their wheels to please a narcissist.
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It's interesting. I have seen rating systems work – in the military. They're harsh to some, but in some situations, you have to filter out B and C players to keep the A players alive. I do think transparent systems w/360º peer reviews are better than many others. I wonder what else is out there that might work.
Related ongoing thread:
Bridgewater Had Believability Issues - https://news.ycombinator.com/item?id=38181360 - Nov 2023 (2 comments)