Business thinker

Ray Dalio's principles and believability-weighted decisions

Updated 4 November 2026

Not affiliated with or endorsed by Ray Dalio or their companies.

Ray Dalio founded the investment firm Bridgewater Associates and has published the principles he uses to make decisions on principles.com and in his book Principles. Three ideas are about decisions: treat each case as "another one of those" and write down a principle for that type, weigh people's views by their believability on the question, and keep the reasoning visible through radical transparency. This page explains them from principles.com and his 2017 TED talk, and shows how to use them for a decision in your own team.

Most decisions are "another one of those"

In the principle "Use principles." on principles.com, Dalio writes that almost all cases at hand are just "another one of those": identify which type the case is, then apply a well-thought-out principle for dealing with it. He says the way to do this well is to slow down, note the criteria you are using, write them down as a principle, and refine them when you see the outcome, before the next case of the same type comes along. Many cases are hybrids that contain several types, so several principles have to be weighed against each other.

In the TED talk he explains where the habit came from. He treated his painful mistakes as puzzles, asked what he would do differently next time, and wrote the answers down as principles so he would remember them. A related principle on principles.com describes observing himself making an investment decision, thinking about the criteria he used, and writing down how he would handle another one of those situations.

A small example: a software company argues every discount request from scratch. Named as a type, such as a discount request from an existing customer, it can get one written principle: when to say yes, how much, and what the customer gives in return. The next request starts from that principle and refines it.

Believability-weighted decisions

principles.com defines believable people as those who have repeatedly and successfully done the thing in question, with a track record of at least three successes, and who explain their approach well when probed. Someone with neither is treated as not believable on that question, someone with one as somewhat believable, and someone with both as the most believable.

Other principles on the site add how to use this: find the most believable people who disagree with you and try to understand their reasoning; pay more attention to the reasoning than to the conclusion; still test a logical theory from someone without the track record; and build up track records over time instead of judging each day afresh.

In the TED talk Dalio describes the aim as an idea meritocracy, which he contrasts with an autocracy, where one leader decides, and a democracy, where every view counts equally: one "in which the best ideas would win out." He shows a vote where the majority went one way and, when views were weighed by believability, the answer was completely different.

The weighting doesn't make the decision on its own. principles.com says believability weighting supplements and challenges the decisions of the responsible party rather than overruling them. A responsible person who goes against the weighted view should be able to say exactly what they disagree with, understand the risk of being wrong, and explain their reasoning; if they can't, they should probably go with the weighted view.

Radical transparency, as it bears on decisions

Dalio connects the idea meritocracy to radical truthfulness and radical transparency: in the TED talk he says people need to say what they really believe and see everything. On principles.com he explains that this brings problems, and how people are handling them, to the surface so that the whole organisation can help solve them. He also sets limits: "Radical transparency isn't the same as total transparency." Private health matters and deeply personal problems are among the things kept confidential, and in the talk he says he means transparency about the important things.

For a decision, the practical part is that the views, the reasons and the way they were weighed are visible to the people the decision affects.

How to apply it to a decision in your team

1. Write the decision as one question and name who is responsible for it.
2. Name the type of decision, and apply any principle your team already wrote for it.
3. Collect each person's view, their reasoning and how confident they are; include at least one believable person who disagrees.
4. For each person, note their track record on this type of question and whether they can explain the cause and effect.
5. Compare the plain majority with the believability-weighted view, and look hard at where they differ.
6. The responsible person decides; if they go against the weighted view, they write exactly why.
7. Write the criteria down as a principle for the next case of this type, and check it against the outcome.

What the sources say, and what they don't

Everything above comes from principles.com, where the principles are published under Dalio's name, and from the transcript of his TED2017 talk. Bridgewater's own culture page describes the firm operating as an idea meritocracy and says that, when the founder transitioned the company in 2022, it re-underwrote several of his principles and evolved others. The sources describe Bridgewater's own tools for recording views and track records; the written, manual version of the method in the skill, and the weights it uses, are our adaptation. This page covers only the decision-making principles, not Dalio's investment or economic views.