When You Need to Make the Best Decision

Ray Dalio's principle: radical open-mindedness

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Heuton Daddy
Jan 22, 2025
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I've been reading "Principles" by Ray Dalio recently. Today, I'd like to share a part of this book with you.

Our lives are made up of countless decisions. This makes me think that life is ultimately about shaping what you can control within the given circumstances.

Some choices can be made pretty easily. I don't want to spend my time on deciding whether to have a hamburger or salad for lunch today.

On the other hand, there are choices that need to be made carefully, one by one. Sometimes, you even have to make the best possible decisions. It could be decisions in your daily work, choices about your future career, about your spouse, or judgments on political issues.

That’s why we must constantly think about how to make the best decisions. We’ve already discussed this a few times in past Heuton Letters. For example, thinking whether the potential gain from a choice is greater than what you’d lose (asymmetric opportunity), or whether the decision is easily reversible or not (two-way door vs. one-way door), etc.


Radical Open-mindedness

There’s a global hedge fund called Bridgewater Associates. Even if you’re not in the investment industry, you’ve probably heard of it if you're interested in investing just a bit. If not, I'm still sure you must have heard the name of its founder, Ray Dalio. (If not… okay.)

In his book "Principles," Ray Dalio talks about the need for each person to have their own ‘principles’ to achieve success by repeatedly making the best decisions. He lists the many principles he’s developed, and today, I’d like to introduce one that he particularly emphasizes: "radical open-mindedness."

What Ray Dalio means by radical open-mindedness is being very transparent in recognizing and admitting that I could be wrong at any time. Sounds obvious, right? But we struggle with being open-minded for two reasons:

1. Pride (Ego): The book refers to this as the 'ego.' We have a defense mechanism that kicks in immediately when we make a mistake or expose a weakness. In that moment, instead of acting logically and calmly, we become defensive and react emotionally. This shuts down our thinking.

2. Blind Spots: Ray Dalio says that no matter how great someone is, there are always things they can’t see. By acknowledging this fact, we can think more openly and ultimately make the best judgments.

Ray Dalio says,

“Radical open-mindedness is motivated by the genuine worry that you might not be seeing your choices optimally.

So, if we truly want to make the best decisions, we have no choice but to adopt radical open-mindedness. Otherwise, the anxiety that we won’t be able to make truly good decisions is just too grave.

If we genuinely want to make the best choices, we’ll evaluate problems from as many perspectives as possible and consider all the great ideas we can take from other people.

But many people get stuck trying to think and judge only within their own heads due to the two obstacles of ego and blind spots. Ray Dalio continues,

“It is the ability to effectively explore different points of view and different possibilities without letting your ego or your blind spots get in your way.”

In order to see what we can’t see ourselves, we need to seek help and advice from outside, and actively listen to people who have different (and trustworthy) opinions. We also need to constantly check whether we’re acting emotionally or being stubborn for no reason.


At Societal Level

Radical open-mindedness is not only crucial on a personal level but also on a societal level. This is especially true for societies that operate on cooperation and consensus based on collective intelligence.

However, in our society today, where many things are becoming polarized, this doesn’t seem to work as effectively as it should.

Politics is a prime example. The reason it’s hard to adopt the mindset of “I may be wrong, so I should listen to the other side’s logic” in politics is because various "X-ism"s trap people into their own views.

When trapped in such ideologies, people demonize and unconditionally reject those who think differently. This is further amplified by the media and public opinion, turning into more and more emotional battles.

Instead of reaching the best consensus, it becomes distorted into fights to prove the other side wrong. It becomes impossible to calmly communicate your own points and genuinely listen to the other side’s arguments.

Another reason we shut out the other side’s words is intellectual laziness. You’ve worked hard to believe this is right, but when the other side presents a different argument, you have to re-examine your own (albeit limited) logic. Then if you’re even persuaded, you have to abandon your logic and follow theirs.

In fact, this is a process that should naturally occur if you truly want to make the best judgments, but it doesn’t seem to work that way in many cases. It’s much easier to just close your eyes and ears rather than reassess your shaky thoughts.

This leads to increasing polarization. The goal of “making the best decisions” is forgotten, and everyone is busy comforting themselves by insisting they’re right.

In relation to this, "Principles" introduces a very important term: “judgment suspension.” Ray Dalio says,

“Open-mindedness doesn't mean going along with what you don't believe in; it means considering the reasoning of others instead of stubbornly and illogically holding on to your own point of view.

To be radically open-minded, you need to be so open to the possibility that you could be wrong.

On a personal note, I basically don’t trust public opinion. This is because I completely agree with what Gustave Le Bon said in "The Crowd: A Study of the Popular Mind.":

“The crowd is always intellectually inferior to an individual.”

Whether in a physical space or online, when we’re part of a specific group, we act emotionally as part of the “crowd” rather than as independent individuals.

That’s why when public opinion loudly declares A, I tend to start thinking from the opposite extreme, Z. This isn’t because I fully disagree with A and fully believe in Z, but because I want to have a balanced perspective. I want to suspend premature judgement and think independently.


Being believable

Ray Dalio encourages actively listening to others’ opinions with an open mind, but of course, you shouldn’t listen to just any opinion. Here, “others” must refer to believable people.

A believable person, according to Ray Dalio, is “those who have repeatedly and successfully accomplished the thing in question and have great explanations of their approach when probed.” Who do you have around you that you can believe? Are you a believable person?

Finally, I’ll wrap up today’s letter with a sentence I liked from the book:

“[The radically open-minded people] understand that you can't make a great decision without swimming for a while in a state of "not knowing."”

See you next week.

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