hey believe nation its Evan my one word
is believe and I believe in you and I
want to see that thing you’ve got inside
of you come out and have a big impact on
the world I started that meant to me
serious – hang on people who’ve done
more than us and hopefully we can learn
from them the way they think their
mindsets their beliefs to help us be the
best version of ourselves so today we’re
going to learn from Ray Dalio and some
of his best investment advice mentor me
ray rule number one is my personal
favorite and I’d love to know which one
you guys like the best and as always
guys as you’re watching if you hear
something that really resonates with you
please leave it down the comments below
put quotes around it so other people can
be inspired as well and when you write
it down it’s much more likely to stick
with yourself – joy
[Music]
when I was 12 I hated school but I fell
in love with trading the markets
I carried at the time earned about five
dollars a bag and I took my catting
money and I put it in the stock market
and that was just because the stock
market was hot at the time and the first
company I bought was a company by the
name of northeast Airlines northeast
Airlines was the only company I heard of
that was selling for less than $5 a
share and I figured I could buy more
shares and if we went up I’d make more
money so there was a dumb strategy right
but I tripled my money I tripled my
money because I got lucky the company
was about to go bankrupt but some other
company acquired it and I tripled my
money and I was hooked and I thought
this game is easy with time I learned
this game is anything but easy
in order to be an effective investor one
has to bet against the consensus and be
right and it’s not easy to bet against
the consensus and be right
one has to bet against the consensus and
be right because the consensus is built
into the price and in order to be an
entrepreneur a successful entrepreneur
one has to bet against the consensus and
be right I had to be an entrepreneur and
an investor and what goes along with
that is making a lot of painful mistakes
so I made a lot of painful mistakes and
with time my attitude about those
mistakes began to change I began to
think of them as puzzles that if I could
solve the puzzles they would give me
gems and the puzzles were what would I
do differently in the future so I
wouldn’t make that painful mistake and
the gems were principles that I would
then write down so I would remember them
that would help me in the future you
know from a very early age the whole
idea of being right is so rewarded
whereas learning from mistakes doesn’t
have its place
right.you so a kid studies they’re all
you’re smart smart smart you take the
examination and okay you do badly and
but life’s not like that life is mostly
a matter of making your mistakes and
knowing how to evolve past those
mistakes and learn
you guys have an extraordinary track
record of winning yeah is it harder to
compete in the markets today than it has
been since you found her Bridgewater no
I don’t think so really not the way we
do it and the reason I’m saying not the
way we do it is we don’t take systematic
biases I think for a lot of people
they’re systematically long everything
you know and so we have a world in which
there when the world gets bad it’s bad
for them
in 2008 it was great for us I don’t know
we had nearly 10 percent return in 2008
so we have the opportunity to go either
way we just may be wrong if we’re wrong
so so I’m so scared about being wrong
that it has helped reduce my chances of
being wrong because I’m so scared I
won’t take debts that on you know that I
don’t feel good about and we diversify
our portfolio and that’s how we we we
got the track record I was just
commenting in terms of I see let’s say
so um you asked me about investors so
I’m trying to go back what animal should
do well absolutely and what you think is
appropriate so here’s what you guys are
doing well I want to just convey to
investors I think in the average
investor most everybody don’t compete
against pros like ourselves or other
people don’t making tactical asset
allocation bets or moving around in the
markets because you’re probably going to
lose it’s difficult for us points no you
have to have a devout a balanced
portfolio in other words think about how
you how you’re going to have a balanced
portfolio what you know is that asset
class as a whole over a period of time
we’re going to outperform cash mm-hmm
okay that’s the most thing that you
could be most comfortable with if they
don’t you have a depression the only
times that hasn’t happened but to know
how to achieve a balanced portfolio and
that’s a whole other subject I don’t
know that you want to go through if
you’re talking about tactical bets in
other words I can come on this show on I
could say I think this is good but then
what happens is if I come a month later
and I then change my mind because
something has happened
now I’m gonna leave some I’m gonna
mislead people so that the tactical bets
I don’t think are gonna be helpful I
would say that we’re in an environment
in which it’s very important to have a
well diversified and that’ll include
assets like to some extent maybe a
little bit of gold in your portfolio in
other words what could I tell investors
try to achieve balance in various ways
that’s a whole subject about how to do
it and also I think that the you know a
gold you know at five percent of your
portfolio five or ten percent of your
portfolio under the circumstances would
be also a prudent thing to do
prudence is the important thing to do
the reason I’m also referring to that is
we have a situation where a debt is
money in other words we have a Fiat
monetary system too and so we’re having
problems as these central banks operate
and so that it’s a think of it as
another form of cash and when cash now
has zero or zero percent interest rates
or less think of it as one of those
possibilities in terms of how do you how
do you create diversification well we
break it into two parts we have two
basic portfolios there is the strategic
asset allocation mix which we call
all-weather and that just has nothing to
do with bets it has to do with how to
make all the assets the same risk parity
on the core risk parity the problem is
when people try to diversify and they
own some equities and equities has a
volatility right that’s large or they
own assets that do well when the economy
does well and do badly when the economy
does badly they have a concentration of
their risk in some assets right they
need to have they need to change the
portfolio they need to buy longer
duration bonds or leverage the bonds or
bring up so that bonds and commodities
and pieces have comparable impacts so
that whatever happens in the economy
will then have a balancing effect
because the one thing you could be most
confident is that asset class is on
average will outperform cash okay so if
you have that’s a strategic asset
allocation that’s what the all-weather
piece is then there’s the bets the bets
are zero-sum right
in order for you to beat me in the game
you’re going to you it’s like poker it’s
a zero-sum game I have we have 1500
people at work at Bridgewater we spend
hundreds of millions of dollars on
research and so on we’ve been doing this
for 37 years and we don’t know that
we’re going to win in other words we
work that we have to have diversified
bets we have a lot of diversified bets
and so on so it’s very important for
most people to know when not to make a
bet because if you’re gonna come to the
poker table you’re gonna have to beat me
and you’re gonna have to beat those who
take money so the nature of investing is
that a very small percentage of the
people take money essentially in that
poker game away from other people who
don’t know when prices go up whether
that means it’s a good investment or if
it’s a more expensive and desperate i
sat down with the famous Ray Dalio right
right and I prepared for 18 hours for
that interview because he’s a genius
there’s not that much on him I wanted to
absorb it all so I got every little bit
of it sat down well then it turned out
ray was a fan of my work which I was
touched by 20 years ago I guess he
listened to my programs he was very
generous with his time and we spent
these three hours and in the three hours
when I got to the end I said to Ray and
said listen I really want help the
average person so I got a question for
you I did this with everyone I said if
you couldn’t give your money to your
children any of it and all you could do
would be give them a portfolio or a set
of investment strategies or instructions
and they were gonna start over and build
it what would it be nice to Tony
I spent a decade figuring that out all
my money is already there my kids money
is there my money philanthropy when I’m
gone is there because I’m not gonna be
here and I want something little do well
in the future and I don’t know what the
future is gonna be markets are gonna
always change I need something that
could work in any mark and I call it my
all-weather fund most of us in the
business are familiar with it a little
bit and so he explained it to me and I
have a good understanding and I said I
get it so what you’re saying is the
reason why this was obsessed him why is
he defined the balanced portfolio in
2008 I got nailed on both sides why did
that happen in 2000 everybody says
portfolio theory this is supposed to
protect me and it didn’t work
but he said as soon as things get better
no one talks about it we just forget
about it happens again happened in 2000
happened in 2008 he said I figured it
out when you have a 50/50 portfolio
right that’s 50/50 of where you put your
money in assets 6040 5050 however you
look at
portfolio right but he said the problem
is that’s not balanced risk this is
where people are crazy I’ve seen people
write things up they see this in the
book and say Tony Robbins is promoting
first I’m not promoting anything every
word in this book is from the best
investors on earth anything that’s from
me is about the emotions that I know for
36 years that’s about my expertise these
are their views but I’ll tell you what’s
amazing he’s a Tony when you have stocks
and bonds half and half you’re not equal
because equities are three times more
volatile so your risk is ninety five
five he said so that’s why people get
killed in a 2008 he said I try to get
this through to people he said but all
of our people handle it you know you
manage money for countries the largest
you know pension funds on earth he said
what people don’t this and they look at
and go oh this is bond heavy the bond
days are over because inflation is going
forward he said it’s not true Tony this
fund in the 1970s it was the worst time
for bonds it was an extraordinary time
for all weather because it isn’t it
looks over balanced because we only get
the same level of risk you have to go
for more long-term bonds or you have to
use more leverage on the bond side and
so when he was all done it was you know
for the average person complex I’m
seeing financial people look at this and
write things up that are just silly
saying you know this is this is never
gonna work this we’re in the you know
interest rates go the only place to go
if you treats go up it’s a balanced fund
the other areas kick in but here’s
what’s interesting after he told the
whole thing to me I said to him I said
look I said this is wonderful
he’ll give me something that very few
people understand on the planet I think
I really got it and I played it back he
said you got it I said there’s two
probably how much person is never gonna
know what to do with this and I said I’m
trying to help somebody that needs to
know what to do I said tell me you’re
telling me to make this beautiful
chocolate cake and you’re saying Tony
you’re sod to do it use some sugar right
use some chocolate use some dairy
products I need to know the amounts you
know give me the amount see who’s Tony
that’s my secret sauce and that’s when
he told me he said well 10 years ago for
you to even get him to talk to me it was
5 billion net worth 100 million dollars
of getting in Aiko and he said and now
for 10 years I haven’t dig at anybody’s
money and she answered your own question
I said you’re not taking money anyway
it’s not gonna compete with you the
average guy he said is never gonna make
it talking to a wealth manager tell me
what to do and he is so generous you
know he’s giving up half his net worth
like many other people and and in the
end he said ok said it but it’ll be
complex I said I can make it simple he
said Wow
I don’t want leverage innocent design
without leverage because it won’t be
perfect I said I don’t care if it’s not
perfect you’re idea bun perfect will be
somebody else’s ideas the best thing
they could do and they lane up the
numbers we ran the numbers and use the
same back testing so you saw a
year-by-year how it really did over the
last 75 years of modern investing and
here’s what’s amazing like all weather
similar in 75 years it’s been right 85
percent of the time what’s even more
extraordinary is the 15 percent what it
wasn’t doing well what it knew well it’s
average losses 1.6 percent not 50 40 30
20 the last 10 years a – 50 % hits his
biggest loss in 75 years was less than
4% minus three point 95 and that was
2008 when the market exploded you know
down to 51 percent here here in the
allocations yes in the book which would
make a normal person gag conditionally
stocks only 30 percent that’s right even
though it’s their stocks on average
supposed to gain what 9% a year 9.2
long-term Treasuries 40% yeah
intermediates 15 no gold 7 to have
commodity 7 and a half yeah absolutely
counter wisdom I know it’s amazing
you know when I read interviewed David
Swensen he said he wrote a book and then
he said the whole secret to success is
to be contrary to what else believes but
the math on this is what works here’s
what’s interesting that looks like your
heavy bronze 40 and 15 55% bonds and it
looks that way visually in terms of
volume you are panned in terms of risk
you’re not you’re still you’re making us
you’re equally way to think of it this
way
what triggers things to grow is
inflation or deflation in terms of price
certain things do really well in
inflation certain to deflation growing
economy shrinking economy and he’s
figured out which quadrant you need to
put each to actually have equal risk and
that’s why it’s not well this year this
formula has done it’s one percent better
than the markets and 13 and the third
right now and but more importantly three
weeks ago in the market drop to gave up
all of its entire benefits for the
entire year and everybody’s guts were
checking there was no gut check because
they went up a quarter of a point so the
beauty of this is I’m sure you know
there’s Studies on with the last 20
years and the studies from 1993 to 2013
and spied Albar and they found that the
market the S&P 500 during that time that
9.2 percent on average
as you said but you know what the
average mutual fund men now owner got
investor 2.5 percent that’s before tax
why because we as investors always do
the wrong thing emotionally that’s right
we sell we should hang on we buy when we
shouldn’t so the greatest thing that I
think that Rey offers somebody the
opportunity to do is actually stay in
the market because if you yeah if you
got 1.6 percent as your big here then 4
percent was the biggest hit you’ve ever
seen at 75 years I think you could stay
in and you can do a job talks about will
just stay in that market through time
this means resetting each year it’s a
reset once a year after one
recalibration so 15 minutes a year and
you’re in the game ordinarily
you’re there with two ways of making
decisions pretty much there’s the boss
has control and so on and kradic
autocratic I’ll call that autocratic
takes in everything and then he makes a
decision or there’s democratic pretty
much one man one vote but really the
best decision making is believability
weighted decision-making and if you
think about it first conceptually you
would say if you’re gonna make a
decision of what you have medical
condition and you’re going how are you
going to get that you’re gonna think who
are the best doctors consult the experts
right consult the experts but this one
knows more and that one knows more less
and how do you do it and then you have
this triangulation and then you make
that that’s kind of the idea
believability decision-making we have
ways of assigning believability that we
all agree are fair that we each assess
each other and we get certain amount of
believability points so now imagine that
you had believability
you’re a believability on a subject
matter maybe it’s investing maybe it’s
accounting whatever the subject is that
you have a certain amount of
believability weighted points and you’re
together
well those believability weighted points
when you say okay what should I make is
a decision now I’m responsible to
something but I ask everybody else I and
I take a believability weighted vote I
can have a believability weighted vote
when I have that believability weight
about vote I really do believe that it’s
going to be a better decision than I
would individually make
that’s believability weighted
decision-making and it’s fantastic when
you have independent thinkers you know
in order to be successful in the markets
or as an entrepreneur one has to be an
independent thinker that makes decisions
better than the consensus decisions it’s
fair in the markets the consensus is
built into the price it’s paid it yeah
so now you have to bet against the
consensus to make money therefore you
have to be an independent thinker the
best dynamic is to have a bunch of
independent thinkers now you’ve got a
bunch of independent thinkers how we’re
going to have thoughtful disagreement
and get past those disagreement how we
have done that is the key to our success
and it’s outlined in the book so what
happens what happens with meditation as
you know it’s it’s just a simple
exercise that allows you first to clear
your head and then brings an equanimity
to everything everything it eliminates
the stress it eliminates the emotion
what how often your busy guy yeah I I’ve
been doing it for 44 years but I do it
you know twice a day probably third of
the time once a day probably a third of
the time and not only 20 minutes twice a
day yes you spend today as part of your
oh it’s such a great investment I would
say that more than any other factor
having any effect on my success it’s
been meditation because the equanimity
and also the creativity because it opens
between the literally the prefrontal
cortex and the amygdala it opens the two
sides of the brains and allows a
spontaneity a creativity and
open-mindedness and and so it’s good for
that not only the health because because
it you get with stress as a terrible
thing but it also is very good in terms
of the clarity and you don’t get the
emotional hijacking and it’s great for
creativity so it’s helped me a lot it’s
the biggest gift I can give
okay so if you didn’t understand the
economic stuff meditated thank you guys
so much for watching I hope you enjoyed
I’d love to know what did you take from
this video what was a single most
important message that you are going to
immediately apply somehow to your life
or to your business leave it down in the
comments below I look forward to hearing
what you have to say I also want to give
a quick shout out to Jay Leno’s to Ross
Scott thank you so much for picking up a
copy of my book your one word and doing
your review on your youtube channel as
well as the interview we did together I
really really really appreciate the
support and I’m so glad that you enjoyed
my book I’m super excited to bring a
book review for you about a movie that I
finished reading quite recently which is
called your one-word by Evan Carmichael
thank you guys so much for watching I
believe in you I hope you continue to
believe in yourself and whatever your
one word is much love I’ll see you soon
[Music]
the most important work ever if you had
to think of one word that’s most
important to you or that sums you Apple
that would be to like a little beacon
pay believe nation if you want to know
what the most important one word is for
Tony Robbins Gary Vaynerchuk Oprah
Winfrey will.i.am and Howard Schultz I
have a very special secret video for you
check the description for details
[Music]
is believe and I believe in you and I
want to see that thing you’ve got inside
of you come out and have a big impact on
the world I started that meant to me
serious – hang on people who’ve done
more than us and hopefully we can learn
from them the way they think their
mindsets their beliefs to help us be the
best version of ourselves so today we’re
going to learn from Ray Dalio and some
of his best investment advice mentor me
ray rule number one is my personal
favorite and I’d love to know which one
you guys like the best and as always
guys as you’re watching if you hear
something that really resonates with you
please leave it down the comments below
put quotes around it so other people can
be inspired as well and when you write
it down it’s much more likely to stick
with yourself – joy
[Music]
when I was 12 I hated school but I fell
in love with trading the markets
I carried at the time earned about five
dollars a bag and I took my catting
money and I put it in the stock market
and that was just because the stock
market was hot at the time and the first
company I bought was a company by the
name of northeast Airlines northeast
Airlines was the only company I heard of
that was selling for less than $5 a
share and I figured I could buy more
shares and if we went up I’d make more
money so there was a dumb strategy right
but I tripled my money I tripled my
money because I got lucky the company
was about to go bankrupt but some other
company acquired it and I tripled my
money and I was hooked and I thought
this game is easy with time I learned
this game is anything but easy
in order to be an effective investor one
has to bet against the consensus and be
right and it’s not easy to bet against
the consensus and be right
one has to bet against the consensus and
be right because the consensus is built
into the price and in order to be an
entrepreneur a successful entrepreneur
one has to bet against the consensus and
be right I had to be an entrepreneur and
an investor and what goes along with
that is making a lot of painful mistakes
so I made a lot of painful mistakes and
with time my attitude about those
mistakes began to change I began to
think of them as puzzles that if I could
solve the puzzles they would give me
gems and the puzzles were what would I
do differently in the future so I
wouldn’t make that painful mistake and
the gems were principles that I would
then write down so I would remember them
that would help me in the future you
know from a very early age the whole
idea of being right is so rewarded
whereas learning from mistakes doesn’t
have its place
right.you so a kid studies they’re all
you’re smart smart smart you take the
examination and okay you do badly and
but life’s not like that life is mostly
a matter of making your mistakes and
knowing how to evolve past those
mistakes and learn
you guys have an extraordinary track
record of winning yeah is it harder to
compete in the markets today than it has
been since you found her Bridgewater no
I don’t think so really not the way we
do it and the reason I’m saying not the
way we do it is we don’t take systematic
biases I think for a lot of people
they’re systematically long everything
you know and so we have a world in which
there when the world gets bad it’s bad
for them
in 2008 it was great for us I don’t know
we had nearly 10 percent return in 2008
so we have the opportunity to go either
way we just may be wrong if we’re wrong
so so I’m so scared about being wrong
that it has helped reduce my chances of
being wrong because I’m so scared I
won’t take debts that on you know that I
don’t feel good about and we diversify
our portfolio and that’s how we we we
got the track record I was just
commenting in terms of I see let’s say
so um you asked me about investors so
I’m trying to go back what animal should
do well absolutely and what you think is
appropriate so here’s what you guys are
doing well I want to just convey to
investors I think in the average
investor most everybody don’t compete
against pros like ourselves or other
people don’t making tactical asset
allocation bets or moving around in the
markets because you’re probably going to
lose it’s difficult for us points no you
have to have a devout a balanced
portfolio in other words think about how
you how you’re going to have a balanced
portfolio what you know is that asset
class as a whole over a period of time
we’re going to outperform cash mm-hmm
okay that’s the most thing that you
could be most comfortable with if they
don’t you have a depression the only
times that hasn’t happened but to know
how to achieve a balanced portfolio and
that’s a whole other subject I don’t
know that you want to go through if
you’re talking about tactical bets in
other words I can come on this show on I
could say I think this is good but then
what happens is if I come a month later
and I then change my mind because
something has happened
now I’m gonna leave some I’m gonna
mislead people so that the tactical bets
I don’t think are gonna be helpful I
would say that we’re in an environment
in which it’s very important to have a
well diversified and that’ll include
assets like to some extent maybe a
little bit of gold in your portfolio in
other words what could I tell investors
try to achieve balance in various ways
that’s a whole subject about how to do
it and also I think that the you know a
gold you know at five percent of your
portfolio five or ten percent of your
portfolio under the circumstances would
be also a prudent thing to do
prudence is the important thing to do
the reason I’m also referring to that is
we have a situation where a debt is
money in other words we have a Fiat
monetary system too and so we’re having
problems as these central banks operate
and so that it’s a think of it as
another form of cash and when cash now
has zero or zero percent interest rates
or less think of it as one of those
possibilities in terms of how do you how
do you create diversification well we
break it into two parts we have two
basic portfolios there is the strategic
asset allocation mix which we call
all-weather and that just has nothing to
do with bets it has to do with how to
make all the assets the same risk parity
on the core risk parity the problem is
when people try to diversify and they
own some equities and equities has a
volatility right that’s large or they
own assets that do well when the economy
does well and do badly when the economy
does badly they have a concentration of
their risk in some assets right they
need to have they need to change the
portfolio they need to buy longer
duration bonds or leverage the bonds or
bring up so that bonds and commodities
and pieces have comparable impacts so
that whatever happens in the economy
will then have a balancing effect
because the one thing you could be most
confident is that asset class is on
average will outperform cash okay so if
you have that’s a strategic asset
allocation that’s what the all-weather
piece is then there’s the bets the bets
are zero-sum right
in order for you to beat me in the game
you’re going to you it’s like poker it’s
a zero-sum game I have we have 1500
people at work at Bridgewater we spend
hundreds of millions of dollars on
research and so on we’ve been doing this
for 37 years and we don’t know that
we’re going to win in other words we
work that we have to have diversified
bets we have a lot of diversified bets
and so on so it’s very important for
most people to know when not to make a
bet because if you’re gonna come to the
poker table you’re gonna have to beat me
and you’re gonna have to beat those who
take money so the nature of investing is
that a very small percentage of the
people take money essentially in that
poker game away from other people who
don’t know when prices go up whether
that means it’s a good investment or if
it’s a more expensive and desperate i
sat down with the famous Ray Dalio right
right and I prepared for 18 hours for
that interview because he’s a genius
there’s not that much on him I wanted to
absorb it all so I got every little bit
of it sat down well then it turned out
ray was a fan of my work which I was
touched by 20 years ago I guess he
listened to my programs he was very
generous with his time and we spent
these three hours and in the three hours
when I got to the end I said to Ray and
said listen I really want help the
average person so I got a question for
you I did this with everyone I said if
you couldn’t give your money to your
children any of it and all you could do
would be give them a portfolio or a set
of investment strategies or instructions
and they were gonna start over and build
it what would it be nice to Tony
I spent a decade figuring that out all
my money is already there my kids money
is there my money philanthropy when I’m
gone is there because I’m not gonna be
here and I want something little do well
in the future and I don’t know what the
future is gonna be markets are gonna
always change I need something that
could work in any mark and I call it my
all-weather fund most of us in the
business are familiar with it a little
bit and so he explained it to me and I
have a good understanding and I said I
get it so what you’re saying is the
reason why this was obsessed him why is
he defined the balanced portfolio in
2008 I got nailed on both sides why did
that happen in 2000 everybody says
portfolio theory this is supposed to
protect me and it didn’t work
but he said as soon as things get better
no one talks about it we just forget
about it happens again happened in 2000
happened in 2008 he said I figured it
out when you have a 50/50 portfolio
right that’s 50/50 of where you put your
money in assets 6040 5050 however you
look at
portfolio right but he said the problem
is that’s not balanced risk this is
where people are crazy I’ve seen people
write things up they see this in the
book and say Tony Robbins is promoting
first I’m not promoting anything every
word in this book is from the best
investors on earth anything that’s from
me is about the emotions that I know for
36 years that’s about my expertise these
are their views but I’ll tell you what’s
amazing he’s a Tony when you have stocks
and bonds half and half you’re not equal
because equities are three times more
volatile so your risk is ninety five
five he said so that’s why people get
killed in a 2008 he said I try to get
this through to people he said but all
of our people handle it you know you
manage money for countries the largest
you know pension funds on earth he said
what people don’t this and they look at
and go oh this is bond heavy the bond
days are over because inflation is going
forward he said it’s not true Tony this
fund in the 1970s it was the worst time
for bonds it was an extraordinary time
for all weather because it isn’t it
looks over balanced because we only get
the same level of risk you have to go
for more long-term bonds or you have to
use more leverage on the bond side and
so when he was all done it was you know
for the average person complex I’m
seeing financial people look at this and
write things up that are just silly
saying you know this is this is never
gonna work this we’re in the you know
interest rates go the only place to go
if you treats go up it’s a balanced fund
the other areas kick in but here’s
what’s interesting after he told the
whole thing to me I said to him I said
look I said this is wonderful
he’ll give me something that very few
people understand on the planet I think
I really got it and I played it back he
said you got it I said there’s two
probably how much person is never gonna
know what to do with this and I said I’m
trying to help somebody that needs to
know what to do I said tell me you’re
telling me to make this beautiful
chocolate cake and you’re saying Tony
you’re sod to do it use some sugar right
use some chocolate use some dairy
products I need to know the amounts you
know give me the amount see who’s Tony
that’s my secret sauce and that’s when
he told me he said well 10 years ago for
you to even get him to talk to me it was
5 billion net worth 100 million dollars
of getting in Aiko and he said and now
for 10 years I haven’t dig at anybody’s
money and she answered your own question
I said you’re not taking money anyway
it’s not gonna compete with you the
average guy he said is never gonna make
it talking to a wealth manager tell me
what to do and he is so generous you
know he’s giving up half his net worth
like many other people and and in the
end he said ok said it but it’ll be
complex I said I can make it simple he
said Wow
I don’t want leverage innocent design
without leverage because it won’t be
perfect I said I don’t care if it’s not
perfect you’re idea bun perfect will be
somebody else’s ideas the best thing
they could do and they lane up the
numbers we ran the numbers and use the
same back testing so you saw a
year-by-year how it really did over the
last 75 years of modern investing and
here’s what’s amazing like all weather
similar in 75 years it’s been right 85
percent of the time what’s even more
extraordinary is the 15 percent what it
wasn’t doing well what it knew well it’s
average losses 1.6 percent not 50 40 30
20 the last 10 years a – 50 % hits his
biggest loss in 75 years was less than
4% minus three point 95 and that was
2008 when the market exploded you know
down to 51 percent here here in the
allocations yes in the book which would
make a normal person gag conditionally
stocks only 30 percent that’s right even
though it’s their stocks on average
supposed to gain what 9% a year 9.2
long-term Treasuries 40% yeah
intermediates 15 no gold 7 to have
commodity 7 and a half yeah absolutely
counter wisdom I know it’s amazing
you know when I read interviewed David
Swensen he said he wrote a book and then
he said the whole secret to success is
to be contrary to what else believes but
the math on this is what works here’s
what’s interesting that looks like your
heavy bronze 40 and 15 55% bonds and it
looks that way visually in terms of
volume you are panned in terms of risk
you’re not you’re still you’re making us
you’re equally way to think of it this
way
what triggers things to grow is
inflation or deflation in terms of price
certain things do really well in
inflation certain to deflation growing
economy shrinking economy and he’s
figured out which quadrant you need to
put each to actually have equal risk and
that’s why it’s not well this year this
formula has done it’s one percent better
than the markets and 13 and the third
right now and but more importantly three
weeks ago in the market drop to gave up
all of its entire benefits for the
entire year and everybody’s guts were
checking there was no gut check because
they went up a quarter of a point so the
beauty of this is I’m sure you know
there’s Studies on with the last 20
years and the studies from 1993 to 2013
and spied Albar and they found that the
market the S&P 500 during that time that
9.2 percent on average
as you said but you know what the
average mutual fund men now owner got
investor 2.5 percent that’s before tax
why because we as investors always do
the wrong thing emotionally that’s right
we sell we should hang on we buy when we
shouldn’t so the greatest thing that I
think that Rey offers somebody the
opportunity to do is actually stay in
the market because if you yeah if you
got 1.6 percent as your big here then 4
percent was the biggest hit you’ve ever
seen at 75 years I think you could stay
in and you can do a job talks about will
just stay in that market through time
this means resetting each year it’s a
reset once a year after one
recalibration so 15 minutes a year and
you’re in the game ordinarily
you’re there with two ways of making
decisions pretty much there’s the boss
has control and so on and kradic
autocratic I’ll call that autocratic
takes in everything and then he makes a
decision or there’s democratic pretty
much one man one vote but really the
best decision making is believability
weighted decision-making and if you
think about it first conceptually you
would say if you’re gonna make a
decision of what you have medical
condition and you’re going how are you
going to get that you’re gonna think who
are the best doctors consult the experts
right consult the experts but this one
knows more and that one knows more less
and how do you do it and then you have
this triangulation and then you make
that that’s kind of the idea
believability decision-making we have
ways of assigning believability that we
all agree are fair that we each assess
each other and we get certain amount of
believability points so now imagine that
you had believability
you’re a believability on a subject
matter maybe it’s investing maybe it’s
accounting whatever the subject is that
you have a certain amount of
believability weighted points and you’re
together
well those believability weighted points
when you say okay what should I make is
a decision now I’m responsible to
something but I ask everybody else I and
I take a believability weighted vote I
can have a believability weighted vote
when I have that believability weight
about vote I really do believe that it’s
going to be a better decision than I
would individually make
that’s believability weighted
decision-making and it’s fantastic when
you have independent thinkers you know
in order to be successful in the markets
or as an entrepreneur one has to be an
independent thinker that makes decisions
better than the consensus decisions it’s
fair in the markets the consensus is
built into the price it’s paid it yeah
so now you have to bet against the
consensus to make money therefore you
have to be an independent thinker the
best dynamic is to have a bunch of
independent thinkers now you’ve got a
bunch of independent thinkers how we’re
going to have thoughtful disagreement
and get past those disagreement how we
have done that is the key to our success
and it’s outlined in the book so what
happens what happens with meditation as
you know it’s it’s just a simple
exercise that allows you first to clear
your head and then brings an equanimity
to everything everything it eliminates
the stress it eliminates the emotion
what how often your busy guy yeah I I’ve
been doing it for 44 years but I do it
you know twice a day probably third of
the time once a day probably a third of
the time and not only 20 minutes twice a
day yes you spend today as part of your
oh it’s such a great investment I would
say that more than any other factor
having any effect on my success it’s
been meditation because the equanimity
and also the creativity because it opens
between the literally the prefrontal
cortex and the amygdala it opens the two
sides of the brains and allows a
spontaneity a creativity and
open-mindedness and and so it’s good for
that not only the health because because
it you get with stress as a terrible
thing but it also is very good in terms
of the clarity and you don’t get the
emotional hijacking and it’s great for
creativity so it’s helped me a lot it’s
the biggest gift I can give
okay so if you didn’t understand the
economic stuff meditated thank you guys
so much for watching I hope you enjoyed
I’d love to know what did you take from
this video what was a single most
important message that you are going to
immediately apply somehow to your life
or to your business leave it down in the
comments below I look forward to hearing
what you have to say I also want to give
a quick shout out to Jay Leno’s to Ross
Scott thank you so much for picking up a
copy of my book your one word and doing
your review on your youtube channel as
well as the interview we did together I
really really really appreciate the
support and I’m so glad that you enjoyed
my book I’m super excited to bring a
book review for you about a movie that I
finished reading quite recently which is
called your one-word by Evan Carmichael
thank you guys so much for watching I
believe in you I hope you continue to
believe in yourself and whatever your
one word is much love I’ll see you soon
[Music]
the most important work ever if you had
to think of one word that’s most
important to you or that sums you Apple
that would be to like a little beacon
pay believe nation if you want to know
what the most important one word is for
Tony Robbins Gary Vaynerchuk Oprah
Winfrey will.i.am and Howard Schultz I
have a very special secret video for you
check the description for details
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