Comments on "Principles by Ray Dalio"

Contents
* Cover letter to Comments on "Principles by Ray Dalio" (Version 8)
* General remarks on the Principles
* Broad conceptual issue
* Page 2:
* Page 5:
* Page 11:
* Page 12:
* Page 13:
* Page 14
* Page 15
* Page 16
* Page 17
* Page 18
* Page 19
* Page 20
* Page 20-21
* Page 21
* Page 22
* Page 23
* Page 23-24
* Page 24
* Page 25
* Page 26
* Page 43
* Page 52
* Flipping through the pages some more
* Winding down
* About me
* Standard coverletter

This is something I sent them back around July 2011 when I was actively looking for work (I'm happy enough doing what I do now for income, especially as I can do it mostly from home). Obviously, this must not be the way to get a high paying job programming in the financial industry. :-) But this may be of interest to others looking at Ray Dalio's "Principles" or in Bridgewater Associates as a place of employment.
http://en.wikipedia.org/wiki/Bridgewater_Associates
http://www.bwater.com/Uploads/FileManager/Principles/Bridgewater-Associates-Ray-Dalio-Principles.pdf

I was inspired to put it up related to this comment I made on Slashdot today:
http://slashdot.org/comments.pl?sid=3861353&cid=44002865

Cover letter to Comments on "Principles by Ray Dalio" (Version 8)

Bridgewater Associates probably gets one of these essays once a week. Here is one more. :-)

This is based on having read through to about page 26, and having read and viewed other stuff on the Bridgewater website and other comments on Bridgewater in a couple articles. For some pages, I take quotes from the page and comment on them.

The key points here are that:
* "Evolution" does not mean "progress" as humans normally think of it (this from someone who was in a PhD program in Ecology and Evolution for a time),
* All reasoning depends on emotions (which give us reason to reason),
* Bridgewater has reached the size where it has a significant effect on the exchange economy that supports it and needs to consider the broader issues in its modeling and responsibilities to stakeholders;
* There can be many overlapping senses of "self" (body, family, philosophy, company, state, etc.) and models (including financial models) may need to take that in account, but that is not reflected in "Principles";
* There is a pressing need for sensemaking tools and I feel I can help create them (and have helped create some in the past);
* such tools might, through the FOSS gift economy, even be a way to take aspects of Bridgewater's self-improvement culture (like through structured arguments) and make that available to the general public, as if things like openness and rationality are true for Bridgewater, they must be true for the rest of the world, and maybe Bridgewater try to help the rest of the world achieve those things too (while also increasing its potential employee pool of people learning such tools);
* Bridgewater can probably better promote health among its community in terms of vitamin D, eating more vegetables, understanding the "Pleasure Trap", and having treadmill workstations;
* At the very end is a standard cover letter that shows technically how great a fit I could be for hedge fund nuts-and-bolts work, with a lot of analytical, quantitative, and programming skills.

Obviously, a cover letter this long would be summarily rejected by just about every firm out there. Pulling numbers out of the air, I can guess there is maybe a 5% chance this may be interesting enough as it gets going to get passed around Bridgewater. I hope so, and indeed, feel free to pass it around inhouse if you want. Of course, it has a 95% chance of not getting read. But, that small chance times the potential value seemed to make it worth writing. Plus it was an interesting thing to do, in either case, essentially procrastinating on my job search. :-)

Still, even if we don't work together, maybe this note will at least inspire someone inhouse at Bridgewater to create a structured argument system for discussing the "Principles"?

Here are some ideas for that (we did not work on coding these, but my wife did contribute to discussions about designing Angler):
http://www.ai.sri.com/~angler/
"Angler is a tool that helps intelligence/policy professionals explore, understand, and overcome cognitive biases, and collaboratively expand their joint cognitive vision through use of divergent & convergent thinking techniques (such as brainstorming and clustering). Humans tend to bias the analysis of situations based on their previous experiences and back-ground. Angler is a tool to help analysts explore, understand, and overcome such biases and to collaborate in expanding their joint cognitive vision. Angler utilizes divergent and convergent techniques, such as brainstorming and clustering or voting, to guide a diverse set of intelligence professionals in completing a complex knowledge task. The tool helps the group through the process of forming consensus, while preserving and quantifying differing ways of thinking. Angler provides a Web-based collaborative environment that al-lows users distributed by both time and geography to assemble in teams, with the help of a facilitator."

And:
http://www.ai.sri.com/~seas/
"SEAS is a software tool developed for intelligence analysts that records analytic reasoning and methods that supports collaborative analysis across contemporary and historical situations and analysts and has broad applicability beyond intelligence analysis. ... The survival of an enterprise often rests upon its ability to make correct and timely decisions, despite the complexity and uncertainty of the environment. Because of the difficulty of employing formal methods in this context, decision makers typically resort to informal methods, sacrificing structure and rigor. We have developed a new methodology that retains the ease-of-use, familiarity, and (some of) the free-form nature of informal methods, while benefiting from the rigor, structure, and potential for automation characteristic of formal methods. Our approach aims to foster thoughtful and timely analysis through the introduction of structure, and collaboration through access to the corporate memory of current and past analytic results. "

I'm not saying how well they work. But that is at least a dream I have, to be able to bring such ideas and tools to other domains, including the general public. And those tools overlap with many of the Principles as far as transparency, attribution, and egoless discussions.

But others have that dream too, in various ways, like Robert Steele:
http://www.phibetaiota.net/2009/10/1988-2009-osint-m4is2-techint-chronology/
"$75 billion a year for secret intelligence, and we still do not have an analytic desktop toolkit, all-source geospatially and historically and cultural astute back office processing, or global reach to all humans, all minds, all the time. Sucks for us. Let’s see what the Smart Mob can do... (Robert Steele, ex-CIA)"

Or David Thomas:
http://www.bedarra.com/bedarra_themes.html
"There is an acute need for better facilities to seamlessly and efficiently collect, analyze, annotate, filter and store semi-structured information from multiple sources, such as documents, presentations, diagrams, numerical data, images, and maps. (David Thomas, Bedarra Research)"

If I worked at Bridgewater, that is what I'd probably most like to work on, beyond other things related to research about socioeconomic changes.

Or alternatively, and preferably to me, maybe the Bridgewater-related foundation would be interested in funding such a thing for everyone on the planet to use, spreading some of the Bridgewater ideals about transparency and ego-less discussions? While also making tools that Bridgewater could build on uniquely in-house, the same as for everyone else in the world? I guess that would be my dream job in that sense, making a free and open source core of such an integrated sensemaking system, funded charitably, with me living frugally, and with the public putting lots of useful content into it, as a platform about structured arguments about policy alternatives, politics, economic trends, sustainable design, various principles of operations, models and theories about reality, wikipedia pages, and so on -- essentially as a globally accessible sensemaking tool for individuals and small workgroups.

--Paul Fernhout
http://www.pdfernhout.net/
---- The biggest challenge of the 21st century is the irony of technologies of abundance in the hands of those thinking in terms of scarcity.

General remarks on the Principles

I guess one might say that from the outside, with this cover letter I'm trying to upgrade Bridgewater in my own way, even as Bridgewater would probably upgrade me in some sense if I worked there. :-) I'm supplying some of the results of my having read widely for many years on a variety of topics related to evolution, technology, psychology, and social change. Maybe someone at Bridgewater will read this, maybe not, but it was also interesting to write it and try to get a message through the filters all organizations have. It's a first draft, andit could be a lot better, a lot shorter, and so on were I to spend a lot more time on it, or were I to have better tools with which to communicate it (which I can aspire to create someday, like supplying a semantic web to your inbox).

Related on filters and why Ray may never see this depending on what kind of place Bridgewater is:
http://www.chomsky.info/articles/199710--.htm
"The universities, for example, are not independent institutions. There may be independent people scattered around in them but that is true of the media as well. And it’s generally true of corporations. It’s true of Fascist states, for that matter. But the institution itself is parasitic. It’s dependent on outside sources of support and those sources of support, such as private wealth, big corporations with grants, and the government (which is so closely interlinked with corporate power you can barely distinguish them), they are essentially what the universities are in the middle of. People within them, who don’t adjust to that structure, who don’t accept it and internalize it (you can’t really work with it unless you internalize it, and believe it); people who don’t do that are likely to be weeded out along the way, starting from kindergarten, all the way up. There are all sorts of filtering devices to get rid of people who are a pain in the neck and think independently. Those of you who have been through college know that the educational system is very highly geared to rewarding conformity and obedience; if you don’t do that, you are a troublemaker. So, it is kind of a filtering device which ends up with people who really honestly (they aren’t lying) internalize the framework of belief and attitudes of the surrounding power system in the society. The elite institutions like, say, Harvard and Princeton and the small upscale colleges, for example, are very much geared to socialization. If you go through a place like Harvard, most of what goes on there is teaching manners; how to behave like a member of the upper classes, how to think the right thoughts, and so on. "

Still, all living systems we know of have some form of filtration. I agree with a lot of the points about Bridgewater's internal openness and emphasis in self-improvement. I think there is some tension between the two though, having to do with ingroup/outgroup dynamics.
http://en.wikipedia.org/wiki/Ingroups_and_outgroups

Some ideas in the Principals echo Doug Englebart's ideas on improvement communities, which I like.
http://www.dougengelbart.org/about/vision-highlights.html

Others echo David Brin's and Marshall Brain's (in Manna) suggestions on a "transparent society".
http://www.marshallbrain.com/manna1.htm

From what I read about anthropology, humans are not actually used to that much privacy in some ways historically within small kinship-organized villages, even if the archiving of past events is very new (which is a sort of different problem from privacy). Many US companies extensively monitor employees but kind of skirt the issue by hiding it; at least Bridgewater is up front about it and tries in other ways to make it into an improvement asset. Also, with the miniaturization of cameras and audio devices and the increase in computer memory (following Moore's Law trends), within a decade or two big parts of the industrialized world may be under that kind of surveillance, including from things like "smart dust". All companies and all people may have to assume everything they do is public in that sense. See also this sci-fi story about related cultural change for different technical reasons:
http://en.wikipedia.org/wiki/The_Light_of_Other_Days

On the other hand, historically, humans have had a lot more autonomy than in the mainstream workplace (although Bridgewater seems to promote autonomy too):
http://idlenest.freehostia.com/mirror/www.whywork.org/rethinking/whywork/abolition.html

Aspects of Bridgewater remind me of what I've read in general about "The Forum" and "EST" (but not quite the same). One caveat: a clarifying process to remove mental parasites can lead to new forms of parasites that game the clarifications process. Fix that hyper-parasite issue, and you may get a hyper-hyper-parasite, etc. That is evolution in action -- populations may evolve into open niches.

The below points out in some cases some amplified agreement and in some cotter assess some disagreement. Obviously, like anything, probably at least 20% of what I write is BS because I don't realize it is BS. Maybe 80%, if like most of what is in the world. Or even 98% if one is really pessimistic about the world. :-) But, maybe there will be a nugget in that 2% that is not BS that you can use though. Whether it is worth it to filter for that is up to you.

On truthfulness and speaking our mind, Principles echoes "How to be Rich" by J. Paul Getty, and a scene where he fires everybody but the junior person who said something about a (test) proposal he made to a company's board that would have been ruinous to the company (he owned) but everyone else agreed with it.

I well need to recheck at end after reading the whole document: Are many "values" really articulated in this document in the sense of specific human patterns to preserve? Not many by page 15. Stuff like a baby's laughter, or a pretty landscape, or species diversity, or having time for friends and family? There is a bit in the footnotes like on backpacking etc. on page 12: "That’s because, for me, the best things in life--meaningful work, meaningful relationships, interesting experiences, good food, sleep, music, ideas, sex, and other basic needs and pleasures-- are not, past a certain point, materially improved upon by having a lot of money." So, there are values there, even thought surprisingly little of the document is actually about values, which are often encoded in stories. But the logically, one may ask, how can our society ensure everyone in it has reasonable and appropriate access to those experiences?

If something is "true" then it probably should be true for everyone, not just at Bridgewater (even as specific preferences might differ).

Here is a long list of virtues, which connect to values and principles:
http://en.wikipedia.org/wiki/Virtues

See also on a general issue about "rationality", which I will requote a couple of times later:
http://en.wikipedia.org/wiki/Descartes_Error
"Descartes' Error: Emotion, Reason, and the Human Brain is a book by neurologist Antonio R. Damasio presenting the author's "somatic marker hypothesis", a proposed mechanism by which emotions guide (or bias) behavior and decision-making, and positing that rationality requires emotional input. In part a treatment of the mind/body dualism question, the book argues that René Descartes' "error" was the dualist separation of mind and body, rationality and emotion."

Also, what about free and open source tools for global society to have some of this Bridgewater ethos? Like to have better conversations or "structured arguments"? To see multiple perspectives? Like my wife and helped with in Genoa II or Singapore's RAHS for intelligence services? Bridgewater is closed in on itself in that sense through pursuing proprietary advantage (including non-disclosure stuff). Does that "closing in" within Bridgewater deny the truth of intrinsic security and mutual security and the possible fact that you can't truly be healthy unless you are surrounded by health globally? Something to think about if Ray diminishes his holdings and wants new frontiers.

As far as being inward-focused for global sensemaking, what good does it do Bridgewater, which, beyond its people, has as its main asset a few bits in some banking computer flipped a certain way, if the world descends into chaos and social consensus (which underpins property rights) breaks down? Or worse, what good are the bits flipped a certain way if the military ironically unleashes weapons built using the tools of abundance (nuclear, biological, robotics, nanotech, informational) out of scarcity fears? Like the rest of the world it interacts with, Bridgewater faces those existential risks, but unlike the rest of the world, Bridgewater may have some really powerful processes and advantages (including people) to better manage those existential risks.

On openness and transparency: If you look at books like "Honest Business" and "the Seven Laws of Money" by Michael Phillips (one of the creators of Mastercard) or stuff on Chaordic organizations by Dee Hock (a creator of Visa), or stuff about some some open technology companies (HP years ago?), there is an aspect to which an open and honest business has a unique presence and has no real competitors, and overall benefits more from its openness and sharing and relationship building then it loses to competitors (since it tends to aggregate new ideas whereas competitors just get a crumb here and there). In particular, if you look at a model like "The Chaordic Commons" that is a very scalable (almost fractal) model of organization, just showing how it is possible to have principles that do not require so much ingroup/outgroup competition:
http://www.chaordic.org/
http://www.chaordic.org/who_we_are.html
"Owning members observe the following principles when participating in activities of the Commons: Principles of Practice
1. Work to ensure that all people, by right of birth, have adequate necessities of life, including clean air, water, food and shelter; an equitable share of wealth and resources; and opportunity to develop their full physical, mental and spiritual potential. Work to ensure that human capacities, technologies and organizations protect and support, not systemically alter, degrade or destroy, the Earth, its diversity of life and its life support systems. Work to ensure interdependent health and diversity of individuals, communities, institutions and cultures. Resolve conflict creatively and cooperatively without resort to physical, economic, psychological, social or ecological violence.
2. Freely and fully exchange information relevant to the Purpose and Principles unless it violates confidentiality or materially diminishes competitive position.
Principles of Organization
1. Be open to owning membership by any Individual or Institution subscribing to the Purpose and Principles in conducting activities of the Chaordic Commons and Terra Civitas Initiative. Have the right to self-organize at any time, on any scale, in any form or around any activity consistent with the Purpose and Principles. Conduct deliberations and make decisions by bodies and methods that reasonably represent all relevant and affected parties and are dominated by none. Vest authority, perform functions and use resources in the smallest or most local part that includes all relevant and affected parties.
2. Educe rather than compel behavior to the maximum possible degree.
The principles are the "organizational DNA" found in each and every "cell" of the Commons, no matter how it grows and evolves. Participation in the Commons provides owning members an opportunity for experiential learning about new ways to organize in a self-organizing, self-governing, self-evolving community!"

I was a member of that in the past, and still like those Principles.

I'm not saying that level of openness might completely work in Bridgewater's finance business (there are also levels of financial reflections once people know what Bridgewater is planning that make modeling harder), but the value of openness is something to think about. Essentially, Bridgewater is internally open, not externally open. It's true that most organisms have cell membranes that are electively permeable, so I'm not saying there is not precedent or logic to that. And often identity is preserved by establishing and maintaining boundaries; but then one gets into what identity is being preserved and why. "Ego" is in a sense about a boundary, and Bridgewater wants to build a strong community internally. But if that is a great idea, what does it say about Bridgewater and how it connects with the rest of the world? If there can only be one Bridgewater in the world (fighting against everyone else), what does that saw about how true it is as a concept for organizing a human society?

Thinking well depends on being well. Here are some physical health ideas (the people in the videos don't look that healthy to me, sorry, based on things like skin complexion and hair luster, but I'm not a doctor so I may be biased there):
* Vitamin D deficiency is an occupational hazard for people who work indoors a lot and travel in enclosed vehicles (but there are disagreements on optimal level) with many serious health consequences.
http://www.drfuhrman.com/library/vitamin_D_recommendations.aspx
http://grassrootshealth.net/
http://www.vitamindcouncil.org
* Most people in the USA eat too few vegetables, fruits, and beans, and too little omega-3s and iodine and so will succumb to heart disease, cancer, diabetes, stroke, infection, arthritis, and dementia before their time. (See Dr. Joel Fuhrman's writings like "Eat to Live", why not ask him to come by and give some talks, maybe donating to his research foundation on nutrition?)
http://www.drfuhrman.com/library/foodpyramid.aspx
http://drfuhrman.com/library/article16.aspx
* Treadmill workstations and other movement promoting strategies in the workplace may increase overall health and productivity (see Mayo Clinic research by Dr. James Levine).
http://www.squidoo.com/walkingwhileworking
(The bit of a Bridgewater office seen in the videos in the background seemed to be desk-based. What's with the white van in a couple videos, too? Less walking? But, those may not be representative so maybe Bridgewater has treadmill workstations?)

I guess if there was one "perk" I'd want working it Bridgewater it would be a nice treadmill workstation like I have at home. :-)

These are all health recommendations I've tried to follow myself (discovered from years of reading on this for my own health issues and that of my family), and, along with same fasting, have helped me lose 50 pounds of excess weight and keep it off and feel better. It is also possible that an aspect of the Lyme disease epidemic (a big CT issue) is really just a symptom of vitamin D deficiency and vegetable deficiency. Dr. Fuhrman has an article about that in one of his newsletter. (I have no financial connection to any of the people at these health links; I am a paying member of Dr. Fuhrman's online health forum, but not an "affiliate" with kickbacks etc.. -- just a person who has benefitted from his advice.)

Exploring these three ideas may boost Bridgewater productivity by 10%. Speaking hypothetically, if I got 1% of that boost for even just one year's worth of improvements such health advice would make to Bridgewater, I could work on those global sensemaking tools for the rest of my life, to bring some Bridgewater ideals to our global society. :-) And give 1% each to those researches and advocates to help everyone else, too. :-) I wrote to IBM about vitamin D a while back, and how deficiency of it was an occupational hazard from working indoors (I like IBMers too), but they just said they did not interfere in doctor-patient relationships. Again, reason can be how we justify what we want to do, or don't want to do, anyway. :-)

Also, as understanding of these health issues spread, including ideas like most heart disease and type II diabetes is reversible by aggressive nutritional therapy, it may seriously alter the health economics of the globe. Is Bridgewater ready for that? And, from a meta point of view could a Bridgewater investment in spreading that information give it comparative advantage on related macro positions (like assuming health insurance companies will be more profitable with lower claims)?

Anyway, I'd suggest Bridgewater bring in people like Dr. Joel Fuhrman, Dr. James Levine, Dr. John Cannell, Doug Lisle, and similar people if they have not come by already, and have them give talks about these issues, both for helping employees be maximally productive and for thinking about macro trends in health care.

Broad conceptual issue

Preferences, habits, and inclinations can be strengths for weaknesses depending on the setting. Be careful what you label a weakness, as it may be a strength in other circumstances.

The metaphor of the rock tumbler for Bridgewater -- rough stones polishing each other. A big rock tumble (or several) might be an interesting thing to have in Bridgewater's main lobby (if there is one) as a metaphorical culture-affirming device. And each new employee could add a rough semi-precious stone to the tumbler on joining. But they might be noisy.

I wrote my 1985 undergraduate senior thesis on "Why Intelligence: Object, Stability, Evolution, and Model". A key issue is that, as William Kent says in "Data & Reality": "The Map is not the territory". The universe is so big, no human model will ever be detailed enough to accurately model it all. Still, we can sometimes make useful simulations. The point is, there are limits to truth-seeking on a practical basis. I know the below may be pushing it, as far as something people at Bridgewater would have time to look at.

But, another related idea is that a lot of reality is "arbitrary" in a sense. As Alan Kay says, "The best way to predict the future is to invent it." What sort of future is Bridgewater trying to invent? Well, that is why I am reading the rest of the Principles document, to see a bit of that. But there is a point at which, through Bridgewater's success in the market, that Bridgewater begins to become the market, or at least segments of it. Or could, in various ways, change the nature of the market by its actions. Is it thinking through those things, and what the long term global consequences will be if mainstream economic models have potential divide-by-zero errors if profits go to zero through competition, or the value of human labor goes to zero through automation, better design, and voluntary social networks, or the rise in demand for most exchange-involved goods goes to zero through humanity progressing up Maslow's Hierarchy of Needs and also embraces "Reduce, Reuse, Recycle", and the kind of voluntary simplicity many at Bridgewater may show when they drive a good car but not the most expensive car?

Page 2:

"I wish I could read and compare the principles of all the people I’m interested in – Steve Jobs, Albert Einstein, people running for political office, people I share my life with, etc."

http://www.sacred-texts.com/aor/einstein/einsci.htm
"For the scientific method can teach us nothing else beyond how facts are related to, and conditioned by, each other. The aspiration toward such objective knowledge belongs to the highest of which man is capabIe, and you will certainly not suspect me of wishing to belittle the achievements and the heroic efforts of man in this sphere. Yet it is equally clear that knowledge of what is does not open the door directly to what should be. One can have the clearest and most complete knowledge of what is, and yet not be able to deduct from that what should be the goal of our human aspirations. Objective knowledge provides us with powerful instruments for the achievements of certain ends, but the ultimate goal itself and the longing to reach it must come from another source. And it is hardly necessary to argue for the view that our existence and our activity acquire meaning only by the setting up of such a goal and of corresponding values. The knowledge of truth as such is wonderful, but it is so little capable of acting as a guide that it cannot prove even the justification and the value of the aspiration toward that very knowledge of truth. Here we face, therefore, the limits of the purely rational conception of our existence.
But it must not be assumed that intelligent thinking can play no part in the formation of the goal and of ethical judgments. When someone realizes that for the achievement of an end certain means would be useful, the means itself becomes thereby an end. Intelligence makes clear to us the interrelation of means and ends. But mere thinking cannot give us a sense of the ultimate and fundamental ends. To make clear these fundamental ends and valuations, and to set them fast in the emotional life of the individual, seems to me precisely the most important function which religion has to perform in the social life of man. And if one asks whence derives the authority of such fundamental ends, since they cannot be stated and justified merely by reason, one can only answer: they exist in a healthy society as powerful traditions, which act upon the conduct and aspirations and judgments of the individuals; they are there, that is, as something living, without its being necessary to find justification for their existence. They come into being not through demonstration but through revelation, through the medium of powerful personalities. One must not attempt to justify them, but rather to sense their nature simply and clearly. "

Page 5:

"When considering each principle, please ask yourself, “Is it true?”"

Aren't fiat dollars essentially just a figment of our collective imagination? See also:
"The Mythology of Wealth"
http://www.conceptualguerilla.com/?q=node/402

Still, a dream or myth can have a powerful affect on someone (good or bad).

Money is a tool, like a shovel. What is the point of a pile of shovels? What do we intend to do with our money (principles, values, patterns to preserve)?

Is "financial obesity" a healthy state to strive for? (A term from James P. Hogan.) And there is the later point on page 12 on the limits of the value of personal wealth.

Still, because personal wealth in our society is mixed with control of companies, there can be reasons to aspire to wealth that relate to realizing or stewarding some vision of a social microcosm. However, that then still has to be a microcosm where wealth matter.But what if you goal is to help a society deal with the fact that, as Iain Banks says, "Money is a sign of poverty"?

Page 11:

"I learned that the popular picture of success--which is like a glossy photo of an ideal man or woman out of a Ralph Lauren catalog, with a bio attached listing all of their accomplishments like going to the best prep schools and an Ivy League college, and getting all the answers right on tests--is an inaccurate picture of the typical successful person."

See my online book (the long version) "Post-Scarcity Princeton" that probes quality problems with the Ivy League.

"I believe that our society's “mistakephobia” is crippling, a problem that begins in most elementary schools, where we learn to learn what we are taught rather than to form our own goals and to figure out how to achieve them. We are fed with facts and tested and those who make the fewest mistakes are considered to be the smart ones, so we learn that it is embarrassing to not know and to make mistakes. Our education system spends virtually no time on how to learn from mistakes, yet this is critical to real learning. As a result, school typically doesn’t prepare young people for real life--unless their lives are spent following instructions and pleasing others. In my opinion, that’s why so many students who succeed in school fail in life."

That's why we homeschool / unschool. See the writings of John Holt and John Taylor Gatto.

Such as:
http://www.johntaylorgatto.com/chapters/16a.htm
"I’ll bring this down to earth. Try to see that an intricately subordinated industrial/commercial system has only limited use for hundreds of millions of self-reliant, resourceful readers and critical thinkers. In an egalitarian, entrepreneurially based economy of confederated families like the one the Amish have or the Mondragon folk in the Basque region of Spain, any number of self-reliant people can be accommodated usefully, but not in a concentrated command-type economy like our own. Where on earth would they fit? In a great fanfare of moral fervor some years back, the Ford Motor Company opened the world’s most productive auto engine plant in Chihuahua, Mexico. It insisted on hiring employees with 50 percent more school training than the Mexican norm of six years, but as time passed Ford removed its requirements and began to hire school dropouts, training them quite well in four to twelve weeks. The hype that education is essential to robot-like work was quietly abandoned. Our economy has no adequate outlet of expression for its artists, dancers, poets, painters, farmers, filmmakers, wildcat business people, handcraft workers, whiskey makers, intellectuals, or a thousand other useful human enterprises—no outlet except corporate work or fringe slots on the periphery of things. Unless you do "creative" work the company way, you run afoul of a host of laws and regulations put on the books to control the dangerous products of imagination which can never be safely tolerated by a centralized command system. ... A huge price had to be paid for business and government efficiency, a price we still pay in the quality of our existence. Part of what kids gave up was the prospect of being able to read very well, a historic part of the American genius. Instead, school had to train them for their role in the new overarching social system. But spare yourself the agony of thinking of this as a conspiracy. It was and is a fully rational transaction, the very epitome of rationalization engendered by a group of honorable men, all honorable men—but with decisive help from ordinary citizens, from almost all of us as we gradually lost touch with the fact that being followers instead of leaders, becoming consumers in place of producers, rendered us incompletely human. It was a naturally occurring conspiracy, one which required no criminal genius. The real conspirators were ourselves. When we sold our liberty for the promise of automatic security, we became like children in a conspiracy against growing up, sad children who conspire against their own children, consigning them over and over to the denaturing vats of compulsory state factory schooling."

"After all, isn’t the point of learning to help you get what you want? So don’t you have to start with what you want and figure out what you have to learn in order to get it?"

Stories which we learn from can communicate values and important patterns to preserve. Learning in that sense can change what we want.

Page 12:

"That’s because, for me, the best things in life … are not, past a certain point, materially improved upon by having a lot of money. "

See:
"Researchers Say Happiness Costs $75K"
http://science.slashdot.org/story/10/09/07/1519221/Researchers-Say-Happiness-Costs-75k

"For me, money has always been very important to the point that I could have these basics covered and never very important beyond that. That doesn’t mean that I don’t think that having more is good–it’s just that I don’t think it’s a big deal. So, while I spend money on some very expensive things that cost multiples relative to the more fundamental things, these expensive things have never brought me much enjoyment relative to the much cheaper, more fundamental things. They were just like cherries on the cake. For my tastes, if I had to choose, I’d rather be a backpacker who is exploring the world with little money than a big income earner who is in a job I don’t enjoy. "

See also:
http://www.smallisbeautiful.org/buddhist_economics/english.html
"While the materialist is mainly interested in goods, the Buddhist is mainly interested in liberation. But Buddhism is "The Middle Way" and therefore in no way antagonistic to physical well-being. It is not wealth that stands in the way of liberation but the attachment to wealth; not the enjoyment of pleasurable things but the craving for them. The keynote of Buddhist economics, therefore, is simplicity and non-violence. From an economist’s point of view, the marvel of the Buddhist way of life is the utter rationality of its pattern—amazingly small means leading to extraordinarily satisfactory results."

And, to challenge the performance-based compensation structure of the entire US financial sector based on (claimed) research by the Federal Reserve as diminishing creativity:
"RSA Animate - Drive: The surprising truth about what motivates us "
http://www.youtube.com/watch?v=u6XAPnuFjJc&feature=channel

"Also, from having come from having next-to-nothing to having a lot, I have developed a strong belief that, all things being equal, offering equal opportunity is fundamental to being good, while handing out money to capable people that weakens their need to get stronger and contribute to society is bad."

See my writings on "Five Interwoven Economies: subsistence, gift, exchange, planned, and theft".
http://www.pdfernhout.net/media/FiveInterwovenEconomies.pdf
http://www.youtube.com/watch?v=4vK-M_e0JoY

Essentially, the gift economy exists alongside the exchange economy and the others. Historically, the gift economy is how it seems big parts of human society have been organized at times in the past (example, Native American history and the Potlach).
http://en.wikipedia.org/wiki/Potlatch
"At potlatch gatherings, a family or hereditary leader hosts guests in their family's house and holds a feast for their guests. The main purpose of the potlatch is the re-distribution and reciprocity of wealth. … Potlatching was made illegal in Canada in 1884 in an amendment to the Indian Act[ and the United States in the late 19th century, largely at the urging of missionaries and government agents who considered it "a worse than useless custom" that was seen as wasteful, unproductive, and contrary to "civilized" [exchange-oriented?] values." [my comment]

In general, this five economies essay points to challenges Bridgewater will face if the exchange economy shrinks relative to the other four economies (or, one can see them as five types of economic transactions that are always present or potentially present to some degree or other).

Page 13:

"Whether it is knowing how people really think and behave when dealing with them, or how things really work on a material level--so that if we do X then Y will happen – understanding reality gives us the power to get what we want out of life, or at least to dramatically improve our odds of success. In other words I have become a “hyperrealist.”"

"In fact, I believe that without pursuing dreams life is mundane."

For most people, most of the time, the mundane is that which gives us "roots". We need both "roots and wings": "There are but two lasting bequests we can give our children. One is roots, the other, wings."

"I believe that dreamers who simply imagine things that would be nice but are not possible don’t sufficiently appreciate the laws of the universe to understand the true implications of their desires, much less how to achieve them."

Possibly. But luck can play a big part too, as can things like maternal effect (the resources one starts with), as can the context (including the actions of others).

"I believe there are an infinite number of laws of the universe and that all progress or dreams achieved come from operating in a way that’s consistent with them.'

Francis Bacon quote: "We cannot command Nature except by obeying her."

"For example, communism was a system created by people with good intentions who failed to recognize that their idealistic system was inconsistent with human nature. As a result, they caused more harm than good."

There is some truth there, but that what the USSR practiced was not really "socialism" as much as authoritarianism clocking it self as communism (Chomsky talks about that, same as a lot of what goes on in the USA is authoritarianism but cloaks itself as democracy, while railing against the (then) USSR as "socialism"). What is happening at Bridgewater is very much a form of "socialism" in a truer sense. From Wikipedia:
http://en.wikipedia.org/wiki/Socialism
"Socialism is an economic system in which the means of production are publicly or commonly owned and controlled co-operatively, or a political philosophy advocating such a system. As a form of social organization, socialism is based on co-operative social relations and self-management; relatively equal power-relations and the reduction or elimination of hierarchy in the management of economic and political affairs."

Which is one thing I like about Bridgewater. :-)

Still, consider this, by Manuel De Landa:
"Meshworks, Hierarchies, and Interfaces"
http://www.t0.or.at/delanda/meshwork.htm
"To make things worse, the solution to this is not simply to begin adding meshwork components to the mix. Indeed, one must resist the temptation to make hierarchies into villains and meshworks into heroes, not only because, as I said, they are constantly turning into one another, but because in real life we find only mixtures and hybrids, and the properties of these cannot be established through theory alone but demand concrete experimentation. Certain standardizations, say, of electric outlet designs or of data-structures traveling through the Internet, may actually turn out to promote heterogenization at another level, in terms of the appliances that may be designed around the standard outlet, or of the services that a common data-structure may make possible. On the other hand, the mere presence of increased heterogeneity is no guarantee that a better state for society has been achieved. After all, the territory occupied by former Yugoslavia is more heterogeneous now than it was ten years ago, but the lack of uniformity at one level simply hides an increase of homogeneity at the level of the warring ethnic communities. But even if we managed to promote not only heterogeneity, but diversity articulated into a meshwork, that still would not be a perfect solution. After all, meshworks grow by drift and they may drift to places where we do not want to go. The goal-directedness of hierarchies is the kind of property that we may desire to keep at least for certain institutions. Hence, demonizing centralization and glorifying decentralization as the solution to all our problems would be wrong. An open and experimental attitude towards the question of different hybrids and mixtures is what the complexity of reality itself seems to call for. To paraphrase Deleuze and Guattari, never believe that a meshwork will suffice to save us. "

"I recognize that sometimes a discovery is made by accident, but the discovery is of some basic underlying principle that creates understanding of a cause-effect relationship that leads to a desired result."

THere is often a ping-pong effect between discovery by tinkers/engineers and refinement by scientists leading to more discoveries by tinkers/engineers. However, it is also, see Langdon Winner, in our choice of what area to innovate in that we make choices about how we want the future to be (within limits of uncertainty).

Page 14

"While I spend the most time studying how the realities that affect me most work--i.e., those that drive the markets and the people I deal with--I also love to study nature to try to figure out how it works because, to me, nature is both beautiful, and it is practical."

I like the sentiment. There also can be an aspect to which studying something in nature changes it and the observer (who is part of nature). So, study is itself a part of a larger process of change.

Ah, I see later aspects of that come up: "Though how nature works is way beyond man’s ability to comprehend, I have found that observing how nature works offers innumerable lessons that can help us understand the realities that affect us. That is because, though man is unique, he is part of nature and subject to most of the same laws of nature that affect other species."

"Its [Nature's] perfection and brilliance staggers me."

Well, as someone who was in an Ecology and Evolution PhD program for a time (I only got a Masters though, as well as met my wife there), I can quite heartily agree that nature is amazing. But "perfection" is problematical term to apply to nature. "Perfection" is also something that applies relative to goals. It's not clear what the "goals" of nature are. One can talk of adaptive survival value, but even labeling that as a "goal" is problematical. This is fuzzy thinking in that sense.

"When I think about all the flying machines, swimming machines and billions of other systems that nature created, from the microscopic level to cosmic level, and how they interact with each other to make a workable whole that evolves through time and through multi-dimensions, my breath is taken away. It seems to me that, in relation to nature, man has the intelligence of a mold growing on an apple--man can’t even make a mosquito, let alone scratch the surface of understanding the universe."

I agree. :-)

See also my:
http://www.pdfernhout.net/a-rant-on-financial-obesity-and-Project-Virgle.html
"... I agree with the sentiment of the Einstein quote [That we should approach the universe with compassion], but that sentiment itself is only part of a larger difficult-to-easily-resolve situation. It become more the Yin/Yang or Meshwork/Hierarchy situation I see when I look out my home office window into a forest. On the surface it is a lovely scene of trees as part of a forest. Still, I try to see *both* the peaceful majesty of the trees and how these large trees are brutally shading out of existence saplings which are would-be competitors (even shading out their own children). Yet, even as big trees shade out some of their own children, they also put massive resources into creating a next generation, one of which will indeed likely someday replace them when they fall. I try to remember there is both an unseen silent chemical war going on out there where plants produce defense compounds they secrete in the soil to inhibit the growth of other plant species (or insects or fungi) as a vile act of territoriality and often expansionism, and yet also the result is a good spacing of biomass to near optimally convert sunlight to living matter and resist and recover from wind and ice damage. I try to recall that there is the most brutal of competition between species of plants and animals and fungi and so on over water, nutrients (including from eating other creatures), sunlight, and space, while at the same time each bacterial colony or multicellular organism (like a large Pine tree) is a marvel of cooperation towards some implicitly shared purpose. I see the awesome result of both simplicity and complexity in the organizational structure of all these organisms and their DNA, RNA, and so on, adapted so well in most cases to the current state of such a complex web of being. Yet I can only guess the tiniest fraction of what suffering that selective shaping through variation and selection must have entailed for untold numbers of creatures over billions of years. To be truthful, I can actually *really* see none of that right now as it is dark outside this early near Winter Solstice time (and an icy rain is falling) beyond perhaps a silhouette outline, so I must remember and imagine it, perhaps as Einstein suggests as an "optical delusion of [my] consciousness". :-) "

"For example, I have found that by looking at what is rewarded and punished, and why, universally–i.e., in nature as well as in humanity--that I have been able to learn more about what is “good” and “bad” than by listening to most people’s views about good and bad. It seems to me that what most people call “good” and “bad” typically reflects their particular group’s preferences: the Taliban’s definitions are different than Americans’, which are different than others’--and within each group there are differences and they are intended to paint a picture of the world the way they’d like it to be rather than the way it really is. So there are many different takes on what is good and bad that each group uses to call others “bad” and themselves “good”, some of which are practical and others of which are impractical. Yet they all, and everything else, are subject to the same laws of nature–i.e., I believe that we all get rewarded and punished according to whether we operate in harmony or in conflict with nature’s laws, and that all societies will succeed or fail in the degrees that they operate consistently with these laws."

Yes, this is a key insight. Still, there is, as above, a sense in which we can make choices and construct our social systems, including from a moral point of view, given human aspects of humans. As Larry Slobodkin, an ecologist who started one of the world's first integrated ecology and evolution programs at SUNY SB, and a mentor for a time told me, even if nature showed something in every organism, people still have moral choices to make. As humans, we can still decide, within limits, how we want the world to be based on things like moral reasoning or aesthetics or other principal, values, and virtues.

"In other words, for something to be “good” it must be grounded in reality. And if something is in conflict with reality—for example, if morality is in conflict with reality—it is “bad,” i.e., it will not produce good outcomes."

I want to point out that despite the above, I am not really disagreeing with this point. I think it is true, too. Morality can reflect reality, but it is also affected by the patterns and processes we choose to preserve which are, like Einstein said quoted above, more like living things themselves. See also "memetics" for one take on that from another direction, crossing ideas from ecology and evolution with ideas from psychology and sociology about the evolution of ideas.

Page 15

"For example, when a pack of hyenas takes down a young wildebeest, is this good or bad? At face value, this seems terrible; the poor wildebeest suffers and dies. Some people might even say that the hyenas are evil. Yet this type of apparently evil behavior exists throughout nature through all species and was created by nature, which is much smarter than I am, so before I jump to pronouncing it evil, I need to try to see if it might be good."

See my earlier point about moral choices about what society we want to create as humans involved with other humans, like has been made at Bridgewater as a form of socialism (even with a filtering component at Bridgewater that discards people who don't fit in much more easily than a country might be able to do that unless it locked up or killed a large amount of its population, which some countries have done).

In so many things in life, when you look at a cost-benefit analysis, those who pay the costs are not the same ones who get the benefits.

But the deeper issue here is that good and bad are relative to perspective and what goals we are talking about. It can be valid to say, what happened to the wildebeest is bad for it, but it is also good for the hyena's children, and overall there is a co-evolutionary process going on. But, as with what Larry Slobodkin said, one has to be careful from generalizing from examples in nature to moral statements about Social Darwinism and so on, since humans are thinking moral creatures working in collectives, which has its own dynamic. Humans are wired a certain way in part because it works. So, things like empathy are in there in most people.
"RSA Animate - The Empathic Civilisation "
http://www.youtube.com/watch?v=l7AWnfFRc7g

But so are status drives (especially in young people trying to find a mate). So, one issues is, how do we take competitive impulses and redirect them into healthier ways for society? James P. Hogan talks about that in "Voyage From Yesteryear". Alfie Kohn talks about it too:
http://www.share-international.org/archives/cooperation/co_nocontest.htm

And Bridgewater realizes some of that inside itself.

"When I think about it, like death itself, this behavior is integral to the enormously complex and efficient system that has worked for as long as there has been life. And when I think of the 2nd and 3rd order consequences, it becomes obvious that this behavior is good for both the hyenas who are operating in their self-interest and in the interests of the greater system, which includes the wildebeest, because killing and eating the wildebeest fosters evolution, i.e., the natural process of improvement. In fact, if I changed anything about the way that dynamic works, the overall outcome would be worse."

There is some truth there, but, "worse" is again from a goal-oriented perspective that one has to be careful in applying to the universe or "evolution". This is the kind of issue though it may take a long time for many people to see, and the way "evolution" is used in our society to mean "progress", and "progress" itself is also used without reference to "direction" and "values". So, there is some fuzzy thinking there. But, there is also a reason for that fuzzy thinking. Thinking deeply about all this rapidly becomes a religious issue and also puts one at risk of psychological destabilization as far as things like confronting "the meaning of life" and so on.

There is an adaptive value in many mainstream religions in that sense, including the religion of the market, because a life lived in existential angst and social strife is generally not good for one's fecundity.

See:
"Biologist looks at religion's evolutionary value. - Darwin's Cathedral: Evolution, Religion, and the Nature of Society by David Sloan Wilson - book review"
http://findarticles.com/p/articles/mi_m1141/is_42_38/ai_92805318/
"In the adaptation process, symbolic thought is every bit as important as rational thought. Symbolic thought is central to human evolution and mentality and as such lies at the centre of "all human social life." When the power of the sacred is linked with symbol, respect is commanded and this helps to organize behavior. A good example of this is found in the writing of the gospels when "historical veracity was subordinated to the symbolic use of narratives about people and events to motivate action." Skeptics who focus on and scorn religious "hocus-pocus" are missing the point. Religious belief is not detached from reality: It is about motivating behavior and should be studied as such. Wilson calls attention to two forms of realism: factual and practical. To focus on the factual only is too one-sided, and it then becomes too easy to dismiss people who stray from the factual as mentally weak. But with religion as an organism organizing human behavior we are not dealing with mental weakness, but rather "the healthy functioning of the biologically and culturally well-adapted human mind.""

And:
"The Market as God"
http://www.theatlantic.com/magazine/archive/1999/03/the-market-as-god/6397/
"A few years ago a friend advised me that if I wanted to know what was going on in the real world, I should read the business pages. Although my lifelong interest has been in the study of religion, I am always willing to expand my horizons; so I took the advice, vaguely fearful that I would have to cope with a new and baffling vocabulary. Instead I was surprised to discover that most of the concepts I ran across were quite familiar. Expecting a terra incognita, I found myself instead in the land of déjà vu. The lexicon of The Wall Street Journal and the business sections of Time and Newsweek turned out to bear a striking resemblance to Genesis, the Epistle to the Romans, and Saint Augustine's City of God. ..."

And:
http://evolution-of-religion.com/

"I believe that evolution, which is the natural movement toward better adaptation, is the greatest single force for change in the universe and that it is good."

Well, that is essentially a religious statement. That does not mean I agree or disagree.

Here is a somewhat different perspective on reality with a lot of truth. Bacteria are the most successful species on the planet, and they form essentially one global supercomputer, where a genetic innovation in one place in the world is potentially available everywhere in a few weeks. Bacteria are collectively tougher than humans and more numerous than humans. Your body is roughly 90% bacteria by numbers and between 1% to 10% bacteria by weight. You think you are "human" but you are essentially a vehicle for a bacterial colony. If the USA launches nukes and plagues and killer robots if social consensus breaks down with an increasing rich/poor divide and widespread joblessness from automation combined with limited demand, and the banking computers all stop running, do you think the bacteria will really care? Nope. I doubt most of them will even notice. Some bacteria might be a lot better off for a time. Even the radiation might lead to more new forms of bacteria. Bacteria are so hardy they may be spread throughout the galaxy and universe already (bacteria may have fallen to an early earth from space). Bacteria is where it is at, from one point of view. All hail our "underlords". :-) So, now let's talk again about the pinnacle of evolution and progress, and what it means to believe in self-improvement? :-)

"It is good because evolution is the process of adaptation that leads to improvement."

Again, a religious statement. And also a fuzzy one, as what is "improvement"? Improvement relative to what value?

"So, based on how I observe both nature and humanity working, I believe that what is bad and most punished are those things that don’t work because they are at odds with the laws of the universe and they impede evolution."

You can't impede evolution any more than you can impede gravity. It just is a defining aspect of this universe (as far as we can tell). For example, a human impulse to help a person in need, or to root for the underdog, may have its own adaptive value at some other level of organization.

"I believe that the desire to evolve, i.e., to get better is probably humanity’s most pervasive driving force."

A problematical statement. I could probably spend hours discussing this sort of Ecology and Evolution thing, and would be happy to. What seems to be more true is possibly that the only reason to change is to better stay the same, although that needs to be weighed against that fact that sometimes what we are preserving (or trying to keep the same) is a dynamic process that fundamentally changes things.

These are much deeper issues that outlined here, with more levels of analysis needed (some of George Soros's comments come to mind about multiple reactive levels of information processing). Exploring this issues about goals and evolution may lead to the implementation of different trading systems at Bridgewater.

Unless this part of the Principles is purposeful misinformation to mislead Bridgewater competitors. :-)

"Enjoying your job, a craft, or your favorite sport comes from the innate satisfaction of getting better. Though most people typically think that they are striving to get things (e.g., toys, better houses, money, status, etc.) that will make them happy, that is not usually the case. Instead, when we get the things we are striving for, we rarely remain satisfied."

Yes, I agree. As is said here (previously linked), but worth linking again:
"RSA Animate - Drive: The surprising truth about what motivates us"
http://www.youtube.com/watch?v=u6XAPnuFjJc

Or see other writings by Alfie Kohn:
http://www.alfiekohn.org/books/pbr.htm

Though there are other things to consider there in disagreement with Alfie Kohn, and the truth may be in the middle:
http://en.wikipedia.org/wiki/Motivation#Intrinsic_motivation_and_the_16_basic_desires_theory

"It is natural for us to seek other things or to seek to make the things we have better. In the process of this seeking, we continue to evolve and we contribute to the evolution of all that we have contact with."

To be technically clear, "populations" evolve as far as gene frequency shifts. Individuals live and die. One could make similar analogies to mememtics perhaps, that minds evolve a frequency of ideas, even as individual ideas may come and go.

"The things we are striving for are just the bait to get us to chase after them in order to make us evolve, and it is the evolution and not the reward itself that matters to us and those around us."

While there is some truth to all of this, I can see I would have a lot of work to do at Bridgewater. :-)

You ever hire anyone before who has been in an Ecology and Evolution program and has any interest in philosophy?

"It is natural that it should be this way–i.e., that our lives are not satisfied by obtaining our goals rather than by striving for them–because of the law of diminishing returns."

True up to a point. But see also the Pleasure Trap by Doug Lisle and Alan Goldhamer, especially the idea of neuroadaptation to unhealthy levels of stimulus and ways to move beyond that:
http://drfuhrman.com/library/article16.aspx
http://www.amazon.com/Pleasure-Trap-Mastering-Undermines-Happiness/dp/1570671508
http://www.amazon.com/The-Pleasure-Trap/dp/B00166PRIM

Page 16

"For example, suppose making a lot of money is your goal and suppose you make enough so that making more has no marginal utility. Then it would be foolish to continue to have making money be your goal."

And thus:
"Researchers Say Happiness Costs $75K"
http://science.slashdot.org/story/10/09/07/1519221/Researchers-Say-Happiness-Costs-75k

"So, because of the law of diminishing returns, it is only natural that seeking something new, or seeking new depths of something old, is required to bring us satisfaction."

Novelty is one thing humans seem wired to crave in different amounts, true. Along with many other things.

The mind is a very complex assemblage of hundreds of adaptive systems that have piled up over time (as well as being maybe something more as a whole).

"In other words, the sequence of 1) seeking new things (goals), 2) working and learning in the process of pursuing these goals, 3) obtaining these goals, and 4) then doing this over and over again is the personal evolutionary process that fulfills most of us and moves society forward."

This is problematical because of the vague idea of "progress" (in which direction?) which is in here. There is a lot to be said for having a clear vision of what a healthy, joyful, and secure society would look like and working towards that, including through the exchange economy and Bridgewater's investment patterns.

"I believe that pursuing self-interest in harmony with the laws of the universe and contributing to evolution is universally rewarded, and what I call “good.”"

A religious statement, though maybe reflecting the notion that "no good deed goes unpunished". :-)

But here is the deeper issue with that statement. What is "self"? The individual body? Ideas in the mind? The family? The company (Bridgewater)? The country? The globe? There are many different overlapping senses of self. So, even if we work from a "self-interest" model, what "self" are we talking about here? A one minute presentation by a wombat on that:
http://www.global-mindshift.org/memes/wombat.swf

Consider, for example, Bridgewater's duty to clients. If Bridgewater was a bagel shop, it would have to think globally, act locally, and plan modestly, making good bagels. But, Bridgewater effects economic transactions on the scale of a small country, acting globally in that sense. So, what are the obligations of a small country towards its subjects or related parties, including other nations? What value is it to clients if they get a lot of money but the world collapses economically or into war? Bridgewater, in that sense, is at a size where worrying about existential risk becomes something to consider.

"Look at all species in action: they are constantly pursuing their own interests and helping evolution in a symbiotic way. Like the hyenas attacking the wildebeest, successful people might not even know if or how their pursuit of self-interest helps evolution, but it typically does."

Again, what sense of "self"? Other cultures might emphasize the family self, or the religious self, or the country self. In some sense, evolution selects for all possible assemblages at all levels simultaneously. That is one thing that makes it a bit tricky. If Bridgewater's financial models do not reflect that, well, what happens to those with financial models progressively out of touch with reality? :-)

"Self-interest and society’s interests are generally symbiotic: more than anything else, it is pursuit of self-interest that motivates people to push themselves to do the difficult things that benefit them and that contribute to society. In return, society rewards those who give it what it wants."

What I am saying is different than "symbiosis" even if that concept is related. I am saying the very definition of "self" is a complex multi-leveled thing.

"That is why how much money people have earned is a rough measure of how much they gave society what it wanted--NOT how much they desired to make money."

But the amount of money is not necessarily a measure of how much someone contributed to society's overall health, longevity, joyfulness, or security. Especially given that a society heading to too much complexity may collapse precisely because every step to health seems too expensive in the short term.
http://en.wikipedia.org/wiki/Societal_collapse#An_example_of_Tainter.27s_Critique_of_Simplistic_Models
"Tainter's position is that social complexity is a recent and comparatively anomalous occurrence requiring constant support. He asserts that collapse is best understood by grasping four axioms. In his own words (p. 194):
1. human societies are problem-solving organizations;
2. sociopolitical systems require energy for their maintenance;
3. increased complexity carries with it increased costs per capita; and
4. investment in sociopolitical complexity as a problem-solving response reaches a point of declining marginal returns."

The same can go for companies like Bridgewater, although, in Bridgewater's defense, there are aspects of the culture precisely that can combat this tendency to ossification.

Success at gaining money as also a factor of giving people with money what they wanted. If you give people without money what they want, then you generally don't get money for it. There are billions of people in the world without much money. Should their needs be considered?

Still, as with Julian Simon, one can also make an argument for exchange-oriented market-driven solutions.
http://www.juliansimon.com/writings/Ultimate_Resource/

Still, the market does not hear the voices of those without money. And those with money can use their money to create an unequal playing field. That is the reason for governments using taxes, subsidies, and regulations, and even a basic income, to adjust for externalities (including wealth centralization) of the market to reflect social values at a larger sense of "self".

"I know that this is true for me – i.e., I never worked to make a lot of money and if I had I would have stopped ages ago because of the law of diminishing returns. I know that the same is true for the all the successful, healthy (i.e., non-obsessed) people I know."

I'll agree. Money as also just a tool, like any other. And fiat dollars themselves are essentially just a figment of our imagination, even though imagination can indeed cause a lot to happen.

"Of course, there are many people who give society what it wants but are paid poorly. This is explained by the law of supply and demand."

True up to a point. There are other factors as well, as pointed to above.

Page 17

"That is why some of the most successful people are typically those who see the changing landscape and identify how to best adapt to it."

Yet: "The reasonable man adapts himself to the world; the unreasonable man persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man (George Bernard Shaw)"

See, I am trying to adapt Bridgewater to myself and the beliefs I've formed over decades of reading on a variety of subjects from motivation to history to alternative economics through post-scarcity issue. So, I am unreasonable. Have I made some progress? :-)

"Most of us are born with attributes that both help us and hurt us, depending on their applications, and the more extreme the attribute, the more extreme the potential good and bad outcomes these attributes are likely to produce."

It also depends on the *context* we find ourselves in. A big beak like a Toucan's is great when you have a lot of nuts to crack, but it is not good when you have a lot of insects to catch in rotten wood.

See also:
http://www.theatlantic.com/magazine/archive/2009/12/the-science-of-success/7761/
"Most of us have genes that make us as hardy as dandelions: able to take root and survive almost anywhere. A few of us, however, are more like the orchid: fragile and fickle, but capable of blooming spectacularly if given greenhouse care. So holds a provocative new theory of genetics, which asserts that the very genes that give us the most trouble as a species, causing behaviors that are self-destructive and antisocial, also underlie humankind’s phenomenal adaptability and evolutionary success. With a bad environment and poor parenting, orchid children can end up depressed, drug-addicted, or in jail—but with the right environment and good parenting, they can grow up to be society’s most creative, successful, and happy people."

But, how much of that is really up to the individual, as opposed to parents or society?

"For example, highly-creative, goal-oriented people who are good at imagining the big picture often can easily get tripped up on the details of daily life, while highly-pragmatic, task-oriented people who are great with the details might not be creative."

Yes, see:
"What If Einstein Had Taken Ritalin?: ADHD's Impact on Creativity"
http://groups.google.com/group/alt.support.attn-deficit/browse_frm/thread/98586af62a143fe7/69ae672e4addc1fa?tvc=1&q=healozone&hl=en#69ae672e4addc1fa
"In American schools these days, countless class clowns are sitting down and shutting up. In chemistry labs, students who used to mix chemicals haphazardly, out of an insatiable curiosity, now focus on their textbooks. In English classes, kids who once stared out the windows, concocting crazy life stories about passersby, now face the blackboard.

"Discovering the Virtues of a Wandering Mind"
http://www.nytimes.com/2010/06/29/science/29tier.html?pagewanted=all
"But now that researchers have been analyzing those stray thoughts, they’ve found daydreaming to be remarkably common — and often quite useful. A wandering mind can protect you from immediate perils and keep you on course toward long-term goals. Sometimes daydreaming is counterproductive, but sometimes it fosters creativity and helps you solve problems. "

A village community is generally a population of genes and skills and experiences. A village is a machine with many parts with different roles in that sense. For example, why are some people night owls? They might have been better at keeping the campfire burning and keeping watch late at night and villages with night owls might have survived better, even though it is generally better for highly visually oriented humans to be alert during the day time. Likewise, sickle cell anemia persists because there is a value in having only one allele for slightly deformed blood cells that better resist malaria (which itself probably came from agriculture...)

"In nature everything was made for a purpose, and so too were these different ways of thinking. They just have different purposes."

This is a major conceptual understanding of evolutionary theory. It may be true for all I know, but it is not really what evolution tells us. What evolution tells us is that adaptations can persist if they are not too detrimental to survival. Adaptations can flourish if they promote survival. Sometimes a mutation that may be harmful in one situation may suddenly be helpful in another (for example, having a beak that is smaller may make it harder to crack nuts, but easier to eat insects if the nut trees stop producing).

"I believe that we all have weaknesses that are the other sides of our strengths and that what differentiates successful people from unsuccessful people, even more than our strengths, is our capacity to learn how to adapt and compensate for our weaknesses."

See "positive psychology" for the idea of building on strengths. Again though, preferences, habits, inclinations, and even skills can be strengths or weaknesses depending on the context. Someone who is slightly paranoid may be a very good person at debugging programs (trusting nothing, not even his or her own assumptions), but terrible with projecting a warm accepting sales-oriented persona. :-)
http://en.wikipedia.org/wiki/Positive_psychology

Page 18

"so the quality of our lives depends on the quality of the decisions we make."

Very often true, although their remain aspects of luck, parents, social context, and fit.

It's also been said "Show me your friends, and I'll show you your future. (Edward Hearn)"

In general, as the document moves from talking about a popular (but misleading) notion of "evolution as progress" to talking about effective decision making, positive thinking about making good choices, and so on, I am probably going to just more generally be agreeing. Sometimes people, even billionaires, can be very successful but not really know why, if success flows from values, habits, preferences, inclinations, and good principles learned as a child. Clearly, there is a lot of success here to appreciate, even if some of the evolutionary theory behind it (or used to justify a certain mythology of wealth) may be problematical. Practice may be effective and adaptive, even when underlying theory may be problematical.

I wrote years ago to Ray Kurzweil, who talks a lot about human evolution to become transhuman, and a lot about the evolution of AI, begging him to go talk to someone in a place like the SUNY Stony Brook Ecology and Evolution department, to get past this naive notion of "evolution as progress" but I don't think he did. I can urge Ray Dalio to do the same.

Someone else put up copies of those letters:
http://heybryan.org/fernhout/

"I believe that the way we make our dreams into realities is by constantly engaging with reality in pursuit of our dreams and by using these encounters to learn more about reality itself and how to interact with it in order to get what we want--and that if we do this with determination, we almost certainly be successful."

Yes, I agree.

"So what is success? I believe that it is nothing more than getting what you want--and that it is up to you to decide what that is for you."

This is inconsistent with the earlier advocated view the relates to evolution, where essentially fecundity or survival and persistence often seems the key measure. Native American Leon Shenandoah was a success at passing his culture to a next generation, but he was not a materially wealthy man.
http://www.peace4turtleisland.org/pages/tributetoshenandoah.htm
http://www.amazon.com/Become-Human-Being-Tadodaho-Shenandoah/dp/1571743413

But valuing passing on values is *not* the same as defining your own success. Especially when the values are also hundreds of thousands of years old and relate to things like community, friendship, family, admiration for nature, and so on. There really are core human values one can point to, which many in the USA have lost touch with, and which the US physical infrastructure has lost touch with (like lack of walkability in many towns). Related:
http://www.bluezones.com/

See also my list of aspects of a "high-quality life" I list here:
http://www.pdfernhout.net/reading-between-the-lines.html#On_quality_in_a_university_setting_and_a_sketchy_map_of_the_landscape_of_this_essay

"This basic principle suggests that you can follow one of two paths to happiness: 1) have high expectations and strive to exceed them; or 2) lower your expectations so that they are at or below your conditions. Most of us choose the first path, which means that to be happy we have to keep evolving."

See also Marshall Sahlins on "The Original Affluent Society":
http://www.primitivism.com/original-affluent.htm
"Hunter-gatherers consume less energy per capita per year than any other group of human beings. Yet when you come to examine it the original affluent society was none other than the hunter's - in which all the people's material wants were easily satisfied. To accept that hunters are affluent is therefore to recognise that the present human condition of man slaving to bridge the gap between his unlimited wants and his insufficient means is a tragedy of modern times. ... The world's most primitive people have few possessions. but they are not poor. Poverty is not a certain small amount of goods, nor is it just a relation between means and ends; above all it is a relation between people. Poverty is a social status. As such it is the invention of civilisation. It has grown with civilisation, at once as an invidious distinction between classes and more importantly as a tributary relation that can render agrarian peasants more susceptible to natural catastrophes than any winter camp of Alaskan Eskimo."

"Another principle to keep in mind is that people need meaningful work and meaningful relationships in order to be fulfilled. I have observed this to be true for virtually everyone and I know that it’s true for me."

So true, as from EF Schumacher:
http://www.smallisbeautiful.org/buddhist_economics/english.html
"The Buddhist point of view takes the function of work to be at least threefold: to give man a chance to utilise and develop his faculties; to enable him to overcome his ego-centredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence. Again, the consequences that flow from this view are endless. To organise work in such a manner that it becomes meaningless, boring, stultifying, or nerve-racking for the worker would be little short of criminal; it would indicate a greater concern with goods than with people, an evil lack of compassion and a soul-destroying degree of attachment to the most primitive side of this worldly existence. Equally, to strive for leisure as an alternative to work would be considered a complete misunderstanding of one of the basic truths of human existence, namely that work and leisure are complementary parts of the same living process and cannot be separated without destroying the joy of work and the bliss of leisure."

"Regardless of others’ principles, you will need to decide for yourself what you want and go after it in the best way for you."

This is misleading. There are, as above, core human values that tend to make people happy. People can be misled into forgetting these. They can be distracted. They can fall into Pleasure Traps (see Doug Lisle's book).

Page 19

"However, there are a few common things that most people want."

Let's see if we agree.

But then there is not much on that again?

"The work doesn’t necessarily have to be a job, though I believe it’s generally better if it is a job. It can be any kind of long-term challenge that leads to personal improvement."

See G. William Domhoff also on some differences between different types of personalities:
http://sociology.ucsc.edu/whorulesamerica/change/science.html
"Third, the change agents have to understand a key difference between themselves and other people. Most people are focused on the joys, pleasures, and necessities of their everyday lives, and will not leave these routines unless those routines are disrupted, whereas change agents sacrifice their everyday lives -- family, schooling, career -- to work on social change every waking minute. This means that change agents must be patient for unexpected social circumstances to create disruption, or else find effective ways to disrupt everyday life without alienating those they wish to become supporters of their cause."

A focus on self-improvement is a lifestyle. But it is no a lifestyle everyone pursues to a big degree or might even be happy with as far as never being able to enjoy the moment (even if for every human, as we do things, we tend to get better at them).

See this work by Philip Zimbardo on time perspective:
http://www.youtube.com/watch?v=A3oIiH7BLmg

Focusing on self-improvement is often about being "future oriented". But not everyone is that way. And, as with the village point above, our villages (and companies) may be healthier and last longer with a mix of perspectives.

Page 20

"It is a fundamental law of nature that to evolve one has to push one’s limits, which is painful, in order to gain strength--whether it’s in the form of lifting weights, facing problems head-on, or in any other way."

Again, technically, individual can't "evolve" (except maybe memetically, but the Principles does not develop that theme explicitly). Populations evolve as gene frequencies change in response to selective pressures, random drift, and differential reproduction.

"Nature gave us pain as a messaging device to tell us that we are approaching, or that we have exceeded, our limits in some way."

Another flawed use of evolutionary language. What would be more true is to say "Pain has had adaptive value as a messaging device to tell us that we are approaching, or that we have exceeded, our limits in some way, so people with an appropriately-tuned pain response tend to have higher fecundity."

See also:
"The boy who could feel no pain"
http://www.unexplained-mysteries.com/viewnews.php?id=84239
"A young Pakistani street performer and members of three related families have enabled scientists to make a genetic breakthrough that could lead to more effective painkillers. During his short life, the unnamed boy never felt pain. He was a local celebrity in northern Pakistan where he astonished crowds by plunging knives through his arms and walking on burning coals. He died on his 14th birthday after jumping from a roof. "

"Most people react to pain badly. They have “fight or flight” reactions to it: they either strike out at whatever brought them the pain or they try run away from it. As a result, they don’t learn to find ways around their barriers, so they encounter them over and over again and make little or no progress toward what they want."

Note that again, this depends on context. In an older world, hundreds of thousands of years ago, this strategy may have worked well. In a modern bureaucracy, this behavior may be problematical, and those who can suppress through with more activity in the frontal lobes (or wherever) may be more successful in that context.

However, it can also be a balance. Again, too little emotion, and a person has no reason to act. Again, all reason is based on emotion, just as all action is based on emotion:
http://en.wikipedia.org/wiki/Descartes%27_Error

At best, we can be clear about what our emotions are. Although even that probably has different risks. :-)

"This is because most learning comes from making mistakes, reflecting on the causes of the mistakes, and learning what to do differently in the future. Believe it or not, you are lucky to feel the pain if you approach it correctly, because it will signal that you need to find solutions and to progress."

I'll agree this is an important insight. It is perhaps most at the core of Ray Dalio's and Bridgewater's success?

Page 20-21

"Since the only way you are going to find solutions to painful problems is by thinking deeply about them--i.e., reflecting--if you can develop a knee-jerk reaction to pain that is to reflect rather than to fight or flee, it will lead to your rapid learning/evolving."

See also on the adaptive value of depression to focus on problems as well as to withdraw from status conflicts that could lead to injury:
"Depression’s Upside?"
http://www.nytimes.com/2010/02/28/magazine/28depression-t.html
And:
http://permut.wordpress.com/2010/03/02/depressions-upside/

Basically, is Bridgewater unconsciously trying to create the focus a group of depressed people have? :-)

Page 21

"And because their decisions are not based in reality, they can’t anticipate the consequences of their decisions."

Well, often we are guessing about reality. We place our bets and take our chances... Just like with this essay, cobbling together some bit of theory and some imaginative speculation about Bridgewater and people there.

"So remember… Ask yourself, “Is it true?”"

But also, ask yourself, it is beautiful? Is it compassionate? Is it joyful? Is it healthy? because there are truths in all those things in various contexts. And truth itself can be a slippery topic, when all our models are just approximations, and there can be generally useful models that may conflict about some views of the world and predictions about it (like multiple weather forecasting models that are used by experienced weather people to create local forecasts).

"Asking other believable people about the root causes of your pain in order to enhance your reflections is also typically very helpful—especially others who have opposing views and who share your interest in finding the truth rather than being proven right."

This is good advice. See also:
"Researcher Responds to Arguments Over His Theory of Arguing"
http://artsbeat.blogs.nytimes.com/2011/06/15/researcher-responds-to-arguments-over-his-theory-of-arguing/
"The main idea of the “argumentative theory of reasoning,” put forward by Dan Sperber and myself is that the function of human reasoning — why it evolved — is to improve communication by allowing people to debate with each other: to produce and evaluate arguments during a discussion. This contrasts with the standard view of reasoning — apparently shared by quite a few of the readers — that reasoning evolved in order to further individual reasoning: to make better decisions, to plan ahead, to get better beliefs, etc. We have gathered a lot of evidence in support of our theory. The interested reader may enjoy a short summary, and the bravest may read the main academic article (use the “One-Click Download” link on the summary Web page). For those who don’t have the time or the inclination, let me simply try to correct an important but common misconception. We do not claim that reasoning has nothing to do with the truth. We claim that reasoning did not evolve to allow the lone reasoner to find the truth. We think it evolved to argue. But arguing is not only about trying to convince other people; it’s also about listening to their arguments. So reasoning is two-sided. On the one hand, it is used to produce arguments. Here its goal is to convince people. Accordingly, it displays a strong confirmation bias — what people see as the “rhetoric” side of reasoning. On the other hand, reasoning is also used to evaluate arguments. Here its goal is to tease out good arguments from bad ones so as to accept warranted conclusions and, if things go well, get better beliefs and make better decisions in the end."

"An example of this is what discussed earlier: wanting to save the wildebeest from the hyenas. When you don’t want to face what’s really happening, you can’t make sound decisions."

What if the wildebeest is your pet raised from birth and is a creature that gives you joy to watch in motion? :-) Or, see also (not saying I agree):
http://en.wikipedia.org/wiki/David_Pearce_%28philosopher%29
"David Pearce is a British philosopher of the negative utilitarian school of ethics. He is most famous for his advocation of the idea that there exists a strong ethical imperative for humans to work towards the abolition of suffering in all sentient beings."

Page 22

"Third: BAD …Worry about appearing good. GOOD: …Worry about achieving the goal. People who worry about looking good typically hide what they don’t know and hide their weaknesses, so they never learn how to properly deal with them, so these weaknesses remain impediments in the future."

See work by Carol Dweckk:
http://nymag.com/news/features/27840/index3.html
"Dweck’s research on overpraised kids strongly suggests that image maintenance becomes their primary concern—they are more competitive and more interested in tearing others down. A raft of very alarming studies illustrate this. "

And:
http://nymag.com/news/features/27840/index2.html
"It didn’t take long. The teachers—who hadn’t known which students had been assigned to which workshop—could pick out the students who had been taught that intelligence can be developed. They improved their study habits and grades. In a single semester, Blackwell reversed the students’ longtime trend of decreasing math grades. The only difference between the control group and the test group were two lessons, a total of 50 minutes spent teaching not math but a single idea: that the brain is a muscle. Giving it a harder workout makes you smarter. That alone improved their math scores."

"This explains why people who are interested in making the best possible decisions rarely are confident they have the best possible answers."

Yes. And maybe there is something to be said for adding one person with stay-at-home alternative homeschooling experience to the Bridgewater team? :-)

"So, what are your biggest weaknesses? Think honestly about them because, if you can identify them, you are on the first step toward accelerating your movement forward. So think about them, write them down and look at them frequently."

Again, the issues is, the same characteristic about a person can be a strength or a weakness in different contexts and relative to different goals. If your goal is to win an Olympic gold medal, you had better be willing to train every day for years. If your goal is to build amazing reliable software, laziness (software reuse, simplifying the system, working more abstractly) might be a better characteristic oftentimes that spitting out reams of code that can all have bugs and need to be tested. :-) Of course, lots of energy in pursuit of laziness might be the best combination for such a programmer. :-)

"For example, if you are dumb or ugly, you are unlikely to acknowledge it, even though doing so would help you better deal with that reality. Recognizing such “harsh realities” is both very painful and very productive."

Except, beauty is in the eye of the beholder, and depends on culture, and clothing, and context, and also behavior (inner beauty).

Also, different thinking pattern, as well as different practiced skills, may be more or less useful in different contexts. See:
http://en.wikipedia.org/wiki/Theory_of_multiple_intelligences

So, there is something implicit in this statement that is problematical.

Page 23

"One of my biggest weaknesses is my poor rote memory: I have trouble remembering things that don’t have reasons for being what they are, such as names, phone numbers, spelling and addresses. ... But I do know that I have created compensating approaches so that what I am bad at doesn’t hurt me much, e.g., I surround myself with people who have good rote memories who do the things that I am bad at, and I carry around tools like my Blackberry."

And you went into a role (context) where that weakness was not such a big deal as it might have been in other roles. In fact, forgetting some details might be a strength in a way, as it lets you focus on logical structures which are useful for your role.

Although for a humorous take on that (by me), see:
http://groups.google.com/group/openvirgle/msg/6df633a31fec50ad
http://groups.google.com/group/openvirgle/msg/4729c9dc0ace6afd
http://groups.google.com/group/openvirgle/msg/f7cd843a6ad0e38a
"Which gets back to the model of:
* "cow"/facts,
* "bull"/thinking,
* "pasture"/infrastructure, and
* "certification"/licensing (or perhaps also validation)."

So, it really takes a lot to have fertile thinking. And you have managed to make Bridgewater into such a place to some extent. Could it be even better though, considering some of these ideas I've spent years learning about? Ideas that may contravene a lot of conventional wisdom in the investment community?

While finding that, I saw something else I wrote a couple years ago:
http://groups.google.com/group/openvirgle/browse_thread/thread/7e07beba08619e48#
Let me refine my corollary to Iain Banks' statement:
"Money is a sign of poverty"
into a living proportionality so you AP Calculus fans can differentiate and integrate it over time, just for fun. :-)
Fernhout's Law of Money: "The degree to which money (or ration units) needs
to be handled in an organization (or a society) is inversely proportional to the degree of imagination, skill, freedom, and community present."
Or in mathematical notation: :-)
M = 1 / I * S * F * C "

I forgot I wrote that. :-) I seem to have about a six month memory for stuff I put together. :-)

"People who overweigh the 1st order consequences of their decisions and ignore the effects that the 2nd and subsequent order consequences will have on their goals rarely reach their goals."

I have a feeling from here on in I'm just going to generally be agreeing. :-) Even though I may point out that Bridgewater might want to consider possible value to its clients from helping our society move to a post-scarcity paradigm through strategic investments that outweighs purely numerical financial returns (which ultimately are just some bits flipped in a computer, even if those bits are deemed by our society to be really important and to have social consequences).

"Similarly, food that tastes good is often bad for you and vice versa, etc."

See the "Pleasure Trap" book for a way beyond this difficulty, through better understanding of neuroadaptation and the value of either a week of fasting or a few weeks of willpower to reset taste preferences.

Page 23-24

"Quite often the 1st order consequences are the temptations that cost us what we really want and sometimes they are barriers that stand in our way of getting what we want. It's almost as though the natural selection process sorts us by throwing us trick choices that have both types of consequences and penalizing the dummies who make their decisions just on the basis of the 1st order consequences alone. By contrast, people who choose what they really want, and avoid the temptations and get over the pains that drive them away from what they really want, are much more likely to have successful lives."

Another aspect of the Pleasure Trap is pointing out that human naturally conserve energy and also seek out most energy return from food for the least effort. This was an adaptation to a world of scarce calories. But, with the infrastructure we have built for ourselves (in part as it was profitable for a few to do so), there is a hamburger store at every street corner it seems. So, our natural preferences are no longer so adaptive. So, we can either use a lot of willpower, alter our preferences (genetically? with drugs?) or we can alter our infrastructure, or use a little willpower and a lot of knowledge. The problem with using a lot of willpower all the time is that we basically get worn out if we live our lives that way, which is why calories counting diets don't work for about 97% of people (according to Dr. Joel Fuhrman).

So, I would suggest that this analysis is missing some context (including evolutionary context), or needs a much better example.

Page 24

"People who blame bad outcomes on anyone or anything other than themselves are behaving in a way that is at variance with reality, and subversive to their progress. Blaming bad outcomes on anyone or anything other than one’s self is essentially wishing that reality is different than it is, which is silly."

Or such behavior is an adaptation to a social context where "blame" can lead to changes? :-) Maybe for sibling rivalry in some families? Or in politics? :-)

Still, yes, I can agree that in most situations, the easiest thing to change is your own attitudes and behavior. For example, if someone does something you find annoying (dirty dishes in the sink), you can change your attitude to one of that thing (dirty dishes) being a reminder to be thankful that person is in your life for all their other positive characteristics.

"Successful people understand that bad things come at everyone and that it is their responsibility to make their lives what they want them to be by successfully dealing with whatever challenges they face."

Positive thinking, and probably generally true. However, some people are just "successful" for reasons of birth or luck or context.

Again, this is not to deny the value of self-improvement. And, it's true, there is a problem with writing something inspirational that has mixed messages. A fundamental aspect of US capitalism is to suggest that success is mainly up to the individual, because then if someone is poor, it is their own fault, not say, that they are, say, someone who puts others first and might do better socially in a gift economy than an exchange economy. Again, context.

"Successful people know that nature is testing them, and that it is not sympathetic."

What if our lives are simply a test to see who is sympathetic, even when the world seems to punish that? :-)

These become in part religious arguments full of assumptions. It's OK to make assumptions, we all need to do so, but you may want to be more clear about some of them.

Page 25

"In a nutshell, what I am saying is that you can probably get what you want out of life if you can suspend your ego and take a no-excuses approach to achieving your goals with open-mindedness, determination and courage."

What if your goal in life is to be a friendly, helpful person with a rooted sense of identity in a family and a community? :-)

From:
http://en.wikipedia.org/wiki/Id,_ego_and_super-ego
"Id, ego and super-ego are the three parts of the psychic apparatus defined in Sigmund Freud's structural model of the psyche; they are the three theoretical constructs in terms of whose activity and interaction mental life is described. According to this model of the psyche, the id is the set of uncoordinated instinctual trends; the ego is the organised, realistic part; and the super-ego plays the critical and moralising role.[1]"

What is an "ego"? What does that mean? What does it mean to suspend one?

Maybe what is really being gotten here is to accept a different view of social status? Which may not be suspending the ego in that sense, but just saying the rules of the community in Bridgewater are different that the ones that have emerged in many other companies?

Page 26

"If I had to pick just one quality that those who make the right choices have it is character. Character is the ability to get one’s self to do the difficult things that produce the desired results."

Knowledge is knowing how to do something. Wisdom is knowing what is worth doing. Virtue (or character) is actually doing it. Excellence and effectiveness is doing it well and in a way that really achieves a worthwhile purpose.

However, humans have evolved so laziness, or energy conservation, is a virtue. :-) So, things get complicated pretty fast.

"In other words, I believe that for the most part achieving success--whatever that is for you--is mostly a matter of personal choice and that, initially, making the right choices can be difficult."

Yes, that fits with this:
"The Mythology of Wealth"
http://www.conceptualguerilla.com/?q=node/402
"According to the new mythology, human beings are economic competitors. The “marketplace” is the new “Valhalla”, where “economic man” frolics. The “market” we are told, contains its own “rationality”. It rewards the efficient. It rewards that list of virtues George Will cites, like “thrift”, “delayed gratification” and of course, “hard work”. Free competition in the market place “rationally” selects the more “worthy” competitor. Thus, the wealthy are the superior competitors who have “earned” their elite status. If you haven’t succeeded it can only be because of your “inferiority”.
Before debunking this whole ideology, a few observations are in order. First of all, notice that the hierarchical social order is back. It has a new veneer of “rationality”, but it is the same old ugly reality. Elites are “better” than you. The non-elites who do the work have “earned” their position, and are proper objects of scorn. Thus, we have a handful of haves, worthy of admiration and respect, and a large class of industrial serfs who own nothing but their bellies. The theory has changed, but the reality is just the same. Not surprisingly, cheap-labor believers in the “rational” hierarchy are hostile to democracy. In fact, they have decided that democratic government is an enemy to “market efficiency”. What Thomas Jefferson won through debunking the old forms of social hierarchy, today’s cheap-labor conservative is busy taking back through his new “rational” form of the same old shit.
And it is the same old sh*t. First of all, “hard work” is only a small piece of the equation. In reality, success in the market is about market position. It isn’t about what you do, but about what you control. The hardest work is actually done by people whose market position makes their daily wage minimal. The person who profits most from their labor is the person who owns the factory they work in. While there are certainly examples of factory owners who started with nothing and rose to be “captains of industry”, for the most part our captains of industry started out a lot further ahead of the game.
This is the difference between say, George W. Bush and you. Dubya went to prep school. You went to the public high school. Dubya went to Yale – ahead of someone with better credentials because he had family connections. Dubya had wealthy friends, through family, “skull and bones”, etc, who bankrolled his oil drilling business. Ask some of his friends to bankroll your oil business. Let me know if they stop laughing before their bodyguards throw you out. Even if you managed to persuade an investor to bankroll some enterprise, you’re going to have exactly one shot. If you lose, you won’t be getting a second chance. Dubya, on the other hand, went broke, and then his friends bankrolled him again, before finally getting him a one percent share of the Texas Rangers. [And curried favor with his father, the President.]
See how it works? People with money help each other out. They don’t help out people who don’t have any. Many cheap-labor conservatives don’t want to help out the destitute at all. They say government assistance to people will make them “dependent”. They say it breeds “inefficiency” and “laziness”. They say that a harsh “got mine, get yours” social environment breeds “market discipline” by rewarding the most resourceful and competitive. Some extreme cheap-labor conservatives don’t even believe in public education. They say it is the family’s responsibility. If your family can’t afford to send you to school, well, that’s not their problem.
Of course, wealthy elites shower their own with benefits – and enjoy a plethora of government benefits and services. They know the value of education, that’s why they keep expensive private schools like Andover in business. In fact, they do everything they can to give their own children every advantage money can buy, because they absolutely understand the value of a “head start” in the fiercely competitive social jungle they have created. They talk about “competition”, but they actually fear it, and do what they can to make the playing field as unequal as they can. Then they tell the wage earner that his position is “his fault”, and that he just needs to work harder – in their factory. He needs to more “disciplined” and “thrifty” if we wants to “get ahead”."

With that said, the truth is somewhere in the middle. Where you start from matters (wealth, parenting, education, genes, and culture). But how hard and how smart you work matters too.

Why point out the distinction? What if you are interested in social change? What is the point of creating all this wealth, anyway, from a societal perspective? Presumably, we want a better society. What does that mean? More infrastructure? Higher real estate prices? More cars? Longer-lived people? More joyful signing? More charity? If you are interested in social change, then there are a lot of things about context you need to think about. Encouragement is obviously one of them, but only one of them. Environment, including reward structures and operational constraints, can influence behaviors. Bridgewater itself is an example of trying to create an environment to elicit a certain type of behavior directed towards certain goals.

"As always, it is up to you to ask yourself if what I am saying is true. As the next part delves into this concept more, you might want to reserve your judgment until after you have read it."

I've been trying. :-) I guess I've kind of run out of energy and time right now for more of this at the moment. I need to stop procrastinating by trying to upgrade Bridgewater and redirect Ray's fortune into broader social ends than simply maximizing exchange economy "efficiency" relative to some narrow metrics, and move on to other prospects for work. :-) But it was fun.

Just skimming through the rest for now, I can think I'm going to agree with much about it as far as effective self-management, openness, and so on. Also, I can accept that all cultures evolve their own way of getting things done, and sometimes compromises have to be made to be part of that. Collectives can often do some things much better than individuals.

Page 43

"At Bridgewater people have to value getting at truth so badly that they are willing to humiliate themselves to get it."

I guess you could see this long email as part of that process. :-) It would be interesting to build on this dialog and see what pushback there was on the points I raised (especially misunderstandings about evolution as progress) and see where that went.

From page 49-50: "…Success and excellent management requires following the 5 Steps: 1) Knowing what you want; i.e., having clear standards/visions/goals. 2) Finding the problems and mistakes that stand in the way of getting to them. Remember these five words: 1) goals, 2) problems, 3) diagnoses, 4) designs and 5) doing, as these five key words represent the five key things that you have to do well in order to be a great manager. Chapter 3 explores these five steps in greater detail. I promise that following this 5-step process well and continuously will lead to rapid improvement in whatever you are managing. 3) Accurately diagnosing the problems and the mistakes. 4) Designing plans that are explicitly laid out, specifying the tasks and timeline. 5) Implementing the plans – i.e., doing the tasks and continuing to assess everything in light of the goals."

But what is a good process by which to come up with good goals, like to achieve a healthy, joyful, secure, prosperous world for everyone? :-)

What good is it for humans to make a shark smarter?

I write on that theme here:
http://www.pdfernhout.net/reading-between-the-lines.html#A_digression_on_some_aspects_of_my_relationship_to_the_Princeton_University_community_and_trade_skill
"I'd suggest, the quest for "excellence" (whether in mathematics or even, say, ethics :-) done apart from service to other human values (even just curiosity), and done through competition with others, is a big part of the current Princeton mythology. It's part of that whole "smarter shark" thing, too. :-) Perhaps things like joy in service to others, or work/life balance might be better things for PU to promote more than academic or athletic excellence (however important those may be in the right context)? Similarly, considering people as "resources" to be used (or even used up) perhaps sets a bad tone for a campus. How about simply relating to people as "people"?"

Page 52

"Increasingly, logical, unemotional discussions in pursuit of truth will no longer be viewed as attacks, and increasingly they will be viewed as explorations of potential problems that will help us learn to improve."

Again:
http://en.wikipedia.org/wiki/Descartes%27_Error
"Descartes' Error: Emotion, Reason, and the Human Brain is a book by neurologist Antonio R. Damasio presenting the author's "somatic marker hypothesis", a proposed mechanism by which emotions guide (or bias) behavior and decision-making, and positing that rationality requires emotional input. In part a treatment of the mind/body dualism question, the book argues that René Descartes' "error" was the dualist separation of mind and body, rationality and emotion."

You can not have an "unemotional discussion" if you are a human being. Even curiosity is an emotion. Greed is an emotion. A desire to be accepted as part of a community is a desire. The desire to excel is a "desire". You can have a civil discussion though. And you can try to put your social status aside if you believe social status depends on being right all the time as opposed to being seen to take part in a social process of truth seeking for various emotional reasons. The issues is priority of emotions, not lack of emotions.

The question is, what emotions does Bridgewater prize? What ones does it reward? The emotional desire to belong and take part in a stigmergic process for the joy of flow in building structured arguments? :-)
"4. Collaboration in large groups (roughly 25-n) is dependent upon stigmergy"
http://collaboration.wikia.com/wiki/Stigmergic_collaboration#4._Collaboration_in_large_groups_.28roughly_25-n.29_is_dependent_upon_stigmergy.
"Although social mediation is an inherent part of collaboration, when applied in traditional face-to-face collaboration social mediation can provide a barrier to the rapid and seamless integration of contributions that characterises projects such as Wikipedia.org and the Open Source software movement. It may be that there is simply so much complex information to be negotiated when people communicate directly that the negotiations of the many collapse under their own weight without the mediation of an administrative/stigmergic system. "

So, is that just sloppy wording or a fundamental conceptual error?

Flipping through the pages some more

"Hierarchy of Merit".

See also:
http://en.wikipedia.org/wiki/Rankism
"Rankism is a term coined by physicist, educator, and citizen diplomat Robert W. Fuller. Fuller has defined rankism as: "abusive, discriminatory, or exploitative behavior towards people because of their rank in a particular hierarchy".[1] Fuller claims that rankism also describes the abuse of the power inherent in superior rank, with the view that rank-based abuse underlies many other phenomena such as bullying, racism, sexism, and homophobia."

He is not against "Earned rank" but against the use of earned rank in one are to be abusive in another.

See also Izzy Kalman on anti-bullying.
http://www.psychologytoday.com/blog/bloggers/izzy-kalman

Winding down

Well, boosting Bridgewater's productivity by 10% possible with vitamin D, vegetables, and treadmill workstations is probably enough for one night. And then another evening after attending with my family the tail end of a Native American festival an hour drive away. I might provide more comments later if I knew where to send them (or not). I get the feeling I'd probably just generally agree with much of the rest as good practical advice about running an internally open company; it is going to be at the beginning that I might find the biggest conceptual issues.

Bertrand Russell said (essentially) that every philosopher makes at least one unrecognized assumption somewhere and then proceeds from there. Still, we all need to make assumptions. And we all need values. And we all need to choose reasoning tools. And to some extent, values, assumptions, and reasoning tools are outside of rationality. We can reflect on them and reason about them, but we have already committed to them to some degree as we begin the (potentially iterative) reasoning process.

About me

What's my flaws? Too polite? Backs away from confrontations and regroups? Writes too many wacky things about post-scarcity issues? Speculates too much? Often too ambitious? Overgeneralizes sometimes? A tendency to laziness? Tends to write long ramble emails (often about creating information tools to handle long rambly emails through creating a social semantic desktop with a suite of sensemaking tools beyond what the CIA probably has. :-) Sometimes willingness to embrace too much risk? Bad posture? I'm sure there are many more. I've mentioned some of them in my writings. A bit of paranoia? Again, whether some things are strengths or weaknesses depends on context (a touch of paranoia is good for debugging, but it is not so good for people skills to be double checking so much).

As another problem, I write some edgy stuff at the edge of my understanding, probably not making too many friends, like with this essay about upgrading the CIA into a post-scarcity institution (potentially annoying both the Peace Movement and the CIA):
"On dealing with social hurricanes (like the US CIA) "
http://www.pdfernhout.net/on-dealing-with-social-hurricanes.html
"This approximately 60 page document is a ramble about ways to ensure the CIA (as well as other big organizations) remains (or becomes) accountable to human needs and the needs of healthy, prosperous, joyful, secure, educated communities. The primarily suggestion is to encourage a paradigm shift away from scarcity thinking & competition thinking towards abundance thinking & cooperation thinking within the CIA and other organizations. I suggest that shift could be encouraged in part by providing publicly accessible free "intelligence" tools and other publicly accessible free information that all people (including in the CIA and elsewhere) can, if they want, use to better connect the dots about global issues and see those issues from multiple perspectives, to provide a better context for providing broad policy advice. It links that effort to bigger efforts to transform our global society into a place that works well for (almost) everyone that millions of people are engaged in. A central Haudenosaunee story-related theme is the transformation of Tadodaho through the efforts of the Peacemaker from someone who was evil and hurtful to someone who was good and helpful. Another theme is exploring the meaning, if true, of a allegation by Wayne Madsen about President Obama's deeper connection to the CIA than was otherwise known. "

Or this basically saying the USA is spending a trillion dollars a year (or whatever) to make itself more insecure:
http://www.pdfernhout.net/recognizing-irony-is-a-key-to-transcending-militarism.html
"There is a fundamental mismatch between 21st century reality and 20th century security thinking. Those "security" agencies are using those tools of abundance, cooperation, and sharing mainly from a mindset of scarcity, competition, and secrecy. Given the power of 21st century technology as an amplifier (including as weapons of mass destruction), a scarcity-based approach to using such technology ultimately is just making us all insecure. Such powerful technologies of abundance, designed, organized, and used from a mindset of scarcity could well ironically doom us all whether through military robots, nukes, plagues, propaganda, or whatever else... Or alternatively, as Bucky Fuller and others have suggested, we could use such technologies to build a world that is abundant and secure for all."

As a friend used to say, a countess who had survived WWII, if you think, don't talk; if you talk, don't write; if you write, don't publish; if you publish, don't sign. Well, I have not followed her advice. And that creates a potential risk, including unemployability in lots of roles. Actually, that's why I've been thinking some more of a finance role, because no one wants much controversial opinions in in a programmer, but some investment places may like someone who is creative and a bit wacky and contrarian (with limits, obviously, and it's a judgement call if I'm just at the edge or over it).

In the 1990s, my wife and I put every spare resource we has once into building a garden simulator for the world (a six person year effort) and two other projects. We ended up owing about $150K on our credit cards for living expenses that we spent many years working to pay back in full on-time with interest (maybe one late payment when we moved due to confusion), working at IBM Research and later other places. While we strove to accurately state our income, credit card companies back then would ask for joint income, which obviously lets a couple get twice as much credit. But that was a time back when my Smalltalk skills were in demand (ranging from US$75 an hour on up). But, rather than make a pile of money, I worked as little for others as possible, and we made our free garden simulator.
http://www.gardenwithinsight.com/

We were so worried about being "scooped". But that was silly. It would have been better to have worked more for pay then.

Now, we've spent our spare resources homeschooling/unschooling our kid (another gift to the world and also our kid in that sense) and writing free software and free essays to help the world make sense of itself (like in supplied links to my writings). And for all that, even having built up some home equity for a time, since gone, we are running up our credit cards again ($45K-ish so far?) [June 2013 note: through lots of hard work, I managed to pay all that credit card debt back...], haven't had health insurance for twelve years (one reason why I know so much about health :-), have a leaky porch roof, and our lawnmower we paid to have serviced last year won't keep running (despite my wife taking apart and cleaning the carburetor), although thankfully we live on about 15 forested acres so mowing our tiny bit of lawn near the house is somewhat optional.

And while we've gotten some applauding comments about our writing, for the most part, there is so much out there, who listens to what we are saying? And it does not translate into much money (ration units) to use in the exchange economy we are still so dependent on (maybe in twenty years 3D printers and cheap solar panels and gardening robots will change that). I recently wrote to two key people interested in broad sensemaking tools for the public or governments, but it seems there is just not much public dollars for really good stuff. Most people don't even understand what the problem is anyway related to lack of sensemaking tools, except they are overloaded with email (one symptom). Maybe I don't fully understand the problem. In any case, I'm all tooled up mentally for doing that kind of stuff, but nowhere to go. In theory, with another year or two of capital we might be able to make a go of that, or even find other support. But we don't have that time/capital anymore. Maybe I could have had it in the past, but I spent the time writing and thinking instead. And I closed most of my credit lines years ago, never wanting to rack up that much debt again. So, we are a couple months away from running out of cash. That's not much to show for a Princeton diploma in many ways. Although, I guess, some might say that was a lot to show for one, as far as personal growth. :-)

Meanwhile a classmate (same year) from Princeton is First Lady. But, she missed emphasizing vitamin D deficiency in "Let's Move", can only make timid attempts to promote vegetables due to vested interests, and her husband jokes about using drones to kill US citizens. Related:
http://www.seriouseats.com/2007/11/the-subsidized-food-pyramid.html
http://www.rawstory.com/rs/2010/05/04/olbermann-obama-predator-drone-joke-bounds/

Who is better off? Like so often in life, there are tradeoffs.

I can say what I like more or less, but hardly anyone listens.

She can't say that much about what she may want to say, but many listen to what she does say.

Always tradeoffs as in this Malcolm Gladwell essay on innovation:
http://www.newyorker.com/reporting/2011/05/16/110516fa_fact_gladwell

Except for rare brilliant inventions that transcend tradeoffs, such as can be explored through things like TRIZ:
http://en.wikipedia.org/wiki/TRIZ

So, I can readily ask, what can I learn from all those experiences? :-)

Why am I "poor" relative to my other classmates, ignoring 6000 or so books with little resale value, and a wife and a homeschooled child, and a roof over our head still for now, and three chickens, two dogs, and a cat (eight dependents if you look at it that way, or instead, that is what I am thankful for every night when I go to sleep).

And with my wife, who for the most part has been paying all our bills for about eight years working half-time (even as her work has been drying up), more than a bit resentful about that (for some good reasons, and some bad ones)? In our culture, it is socially acceptable and even applauded for a husband to work in the exchange economy, and the wife to work in the gift economy, but the reverse is, for the most part, not socially acceptable in our culture.

Where did I go wrong? Or did I?

I guess I don't entirely know. Maybe my wife and I are both schmucks, maybe even in different ways? :-) And not even very effective schmucks at that too? :-) But, I can still hope we've made a little difference here and there, as no doubt my classmate has in her own way.

It might be interesting to learn more in that sense through Bridgewater about being more effective or understanding myself and others better.

But, I can't say I really believe in the value of the market-related primarily zero-sum competitive Bridgewater work itself -- even if the community sounds great, and the challenges are no doubt interesting as entertaining intellectual puzzles, and tools needed by Bridgewater for collective sensemaking are not doubt tools needed globally (although it's likely Bridgewater might never make them free and open source software if developed there). So, while I have (I think) little problem with not taking personally criticism of points I advance (as far as ego), I do have issues in general with the broader industry. Of course, Jains, who cover their mouths with gauze to not even risk eating a fly, will often going into finance because they think it is somehow some occupation that avoids issues of being destructive. It's been said "Reason is the way we justify things we want to do anyway." :-) I'm not sure how all that squares with Bridgewater's philosophy or business. Yet, I can still hope there is some opportunity to do something better at Bridgewater, to find some parallel paths of mutual value, such as global sensemaking tools, or helping Bridgewater upgrade the world to a post-scarcity society while it makes lots of money until money ceases to matter much, or something like that. Yet, I still need to feed my family, and frankly, I'm guessing I'm not that good a match for, say, local assistant manager jobs in a supermarket which requires a broader set of skills and a high tolerance for the routine (though I think that work worthwhile). Maybe I've become a bit too specialized as a researcher and programmer in that sense. So, if I am essentially forced by current circumstance to take some kind of work in the exchange economy, potentially avoidable in the past had I made different decisions, but probably not now, why not Bridgewater given other interesting things about it?

Anyway, I hope something here may be useful in Bridgewater become a more joyful, healthier, secure, and more effective place as far as promoting the same for the world. Ultimately, there are limits to what can be done to help the world through the casino economy of flipping banking computer bits. This site has related films that attempt (maybe not always successfully) to explore what is true about money in our society:
http://www.moneyasdebt.net/

On my treadmill workstation (it just shorted out a couple days ago it seems, after five years or so of service), I have a MUTTS cartoon by Patrick McDonnell with a dog on a chain patting a bird, and the phrase "You cannot always have happiness, but you can always give happiness."

Certainly those banking computers and bits are "true" (and sometimes "false" :-) in a sense. But maybe for weak values of "true" relative to other things? :-)

Or in other words:
http://en.wikiquote.org/wiki/The_Hitchhiker%27s_Guide_to_the_Galaxy
"This planet has — or rather had — a problem, which was this: most of the people living on it were unhappy for pretty much all of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movement of small green pieces of paper, which was odd because on the whole it wasn't the small green pieces of paper that were unhappy."

Money is a tool. How can one truly use it for some useful purpose?

I sent an email a while back about being a "Post-Scarcity Investment Strategist" to a PU alum running Prospect Capital, but I never heard back. [Note from 2013: I actually found a reply from Prospect Capital in my spam, but only noticed it many months later, after taking on other work. C'est la vie. ] I still think I might be good at that, eventually. :-) I mentioned to him the upcoming potential helium cries, which is largely ignored and really needs investment.

It would be kind of sad to be creating great tools for sensemaking but only have them used by a few people inside Bridgewater. But I guess it is probably better for my family than being homeless. Still, I guess I would hope that better sensemaking tools even if proprietary, would get translated into significant strategic investments that were seriously addressing global needs through the exchange economy as our society grows beyond a need for direct exchange and an income-through-jobs link). But I'd still feel it was a shame the whole world did not have access to them to reduce the broad existential risks Bridgewater may face align with everyone else related to various 21st century cultural and technological trends as the tools of abundance get wielded by people with artificial scarcity on their minds.

Thanks for sharing your principles. I'll keep reading through them as time permits.

I found Bridgewater when wondering about who the company might be that another job I sent an email about through an intermediate firm listing something in craigslist (but that position was supposedly in Western Massachusetts, and if it is Bridgewater, I apologize for any confusion -- they have not replied back to me yet). I included that more standard cover letter below. You can compare the two for amusement, to see two faces of the same person. :-) That other one is the side that so far has been rewarded at places like IBM Research, the Principal Financial Group, and so on. But both sides are "me" in that sense. And one thing in the Principles that did resonate was a point about integrating yourself. It's a good point. But I guess it also can be seen as a point about environment, too.

Anyway, I would not have written this long note if I did not think Bridgewater (or spinoffs, including the related foundation) had the potential for being something even more than what it is, especially if it takes these ideas about community and transparency and collective sensemaking and thinks about how they might apple to the world. I can hope maybe I could do some good at Bridegwater, as above, questioning on the idea of context, supplying a deeper understanding of evolution, and probing about how Bridgewater effects the infrastructure of the very environment it makes its decisions in now that it has grown so much, and so on.

Anyway, below is a more standard cover letter. :-)

Standard coverletter

Dear ...

I would like to apply for the position of a Senior Software Engineer for a hedge fund ...

I have experience translating requirements into working code in a variety of settings (corporate, academic, small business, and volunteer).

I have developed software in multiple quantitative statistical areas from speech recognition (at IBM Research) to ecological modeling (for Applied Biomathematics) to evolutionary algorithms (independently).

Beyond my extensive practical hands-on programming experience, I have an undergraduate degree from Princeton University in Cognitive Psychology (with George Miller, creator of WordNet), which has proven useful in gathering requirements and use case stories needed to develop quality software that meets people's actual needs. I also have a masters degree in Quantitative Applied Ecology from SUNY Stony Brook (as part of studies in Ecology and Evolution which included a strong mathematical component as that department included Robert Sokal as a leading biostatistian, and my advisor, Lev Ginzburg, was a mathematician turned ecologist). Many financial techniques being used now reflect biological themes like networks and evolutionary algorithms, so that background is potentially useful at a hedge fund. I also attended a PhD program in Operations Research and Statistics at Princeton University, but I did not receive a degree from there (that program was a bit too theoretical for me, as they mainly focus on proofs of mathematical techniques and I was more interested in applied work, even though I can see the value in such theoretical work). My GRE scores are Analytical 800, Verbal 790, and Quantitative 780, which are a good match for the needs of hedge funds.

I have worked with a variety of database systems in the past including SQL databases. My most recent database work has been with CouchDB, which is part of an up and coming field of NoSQL databases useful for storing and indexing vast amounts of semi-structured data.

I have worked as a consultant in several roles, including at a major insurance company (the Principal Financial Group), where I mentored other programmers. I also developed the original core code of that company's successful TeleApp system for real-time telephone interviews.

I am familiar with various design patterns, including from my work with Smalltalk, where a lot of that pattern thinking originated.

I was involved with Q&A for a project at IBM Research involving regression testing for code that generated images related to developing the XML/XSL-FO standard. The resulting code became part of IBM's Infoprint print-related offerings.

I am a tenacious debugger and enjoy solving complex problems other people have given up on. I have worked both individually (on my own projects such as EvoJazz, and musical toy based on evolutionary algorithms), with my wife on several collaborative team-programming software projects (a real test of long-term politeness), and with teams in corporate settings like at IBM Research, the IBM Internet Media division, and the Principal Financial Group. I have also managed two small technology-related labs in academia (one for robotics, one for general user computing).

While I am not an economist, I have thought and written some about long-term economic trends based on changes in culture and technology (both from Moore's Law as we see it in practice with falling computing costs and also as our society follows Julian Simon's predictions in "The Ultimate Resource" and transitions towards a post-scarcity paradigm, even with various bumps along the way). Here is a presentation I recently created on such themes:
"Five Interwoven Economies"
http://www.youtube.com/watch?v=4vK-M_e0JoY

I would enjoy learning more about economics from a hedge fund's perspective.

I would like to draw special attention to my work in the IBM Research Speech Group where I was working with software that was heavily based on statistical pattern recognition with Hidden Markov Models (HMM) and other techniques. I did not implement any of that core software there though; I just used libraries supplied by others to build a device that used them (and which IBM's chairman requested a copy of for his office to demo to others). But even that level of use required some basic understanding of what was going on with such systems. Some financial firms use (or have used, given how fast the field can change) similar techniques for making predictions related to trading patterns.

I am a US citizen, and I am able to start work immediately. My family would be willing to relocate with suitable relocation assistance.

...

--Paul Fernhout
http://www.pdfernhout.net/
---- The biggest challenge of the 21st century is the irony of technologies of abundance in the hands of those thinking in terms of scarcity.