Ray Dalio compares poker investing and a diversified portfolio to a casino in a new interview. The billionaire investor questions the value of crypto as a store of wealth or a medium of exchange. Dalio compares life to playing a video game and lessons learned from problem solving to precious gems. Something is loading.
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Ray Dalio compared markets to poker and wallets to casinos in a recent episode of the podcast Richer, Wiser, Happier.
The billionaire investor and founder of Bridgewater Associates questioned the value of cryptocurrencies as stores of wealth and mediums of exchange, and predicted that superior coins would be released in the future. He also likened life to a video game, lessons to gems, and meditation to ninja training.
Here are Dalio’s 7 best quotes, slightly edited for length and clarity:
1. “Markets are a zero-sum game. It’s like poker – someone’s going to take someone else’s money. And it’s harder to compete than the Olympics.”
2. “If I have 15 good uncorrelated bets, I will reduce my risk by 80% without reducing my return. And that means I improve my risk/reward ratio by a factor of five. It’s like a casino, they there are so many tables and so on. This is not one of them all in one night. (Dalio was comparing a diversified portfolio to a casino, which might lose money on some games but which should make money overall, especially over time.)
3. “All digital currencies replicate next to nothing. They go up and down for everyone. It’s not a hedge against inflation, it’s not an effective store of wealth. hang your hat. And that’s tiny. Bitcoin right now probably has a total value of about a quarter of what Microsoft shares are and so on. It’s becoming a concern of people that’s disproportionate to its true reality.(Bitcoin’s market cap is around $480 billion, while Microsoft’s market cap is around $1.9 trillion.)
4. “Everyone follows what you do, so it’s not private. And as a medium of exchange, it’s not very effective. It’s not like you can easily buy things with. So it wouldn’t be my favorite store of wealth. I own a tiny chunk of it just because of the ‘Who knows?’ element, but I think over time there will be better digital currencies.”
5. “Life is more like a video game than school. You go there, you encounter these things, you learn and so on, rather than sitting around and remembering what you taught you.”
6. “Pain plus thinking equals progress. I’ve learned that every time I have an encounter, it’s like a puzzle. If I can solve the puzzle, I get a rock. precious, and the precious stone is a new principle or learning that improves my life.”
7. “The meditation process gives you an equanimity, a calm concentration. It’s kind of like in ninja movies – they fight and everything goes really fast, but then they slow it down because for the ninja protagonist , it just seems like in slow motion, it’s happening to you, and they’re dealing with it calmly.” (Dalio was emphasizing the value of transcendental meditation.)