Ray Dalio is someone I admire and respect for many reasons. He is one of the greatest investors and a thoughtful leader. However, even the best can make mistakes. Dalio is no exception. In the late 1990s, Ray Dalio predicted that the US economy was headed for a recession. He also insisted that the stock market was overvalued, and a crash was imminent. He began to short the stock market, betting against it and hoping to profit from the crash.
Dalio was wrong; the US economy didn’t stop growing. On the contrary, the stock market continued to rise. His short position began to lose money until he was forced to close it out at a loss and almost closed down his hedge fund.
Of course, very few of us experience that level of loss and public humiliation, Bill Ackman being another recent example with his $400 million loss in Netflix stock. However, most of us still experience various levels of failure, setback, and shame in our lives. Some hardly scratch us; we brush them off and move on. Others force us to take a step back, but we manage to pick ourselves up and continue. Then there are those rare failures and situations that bring a radical change in our beliefs and perceptions of ourselves. They leave us feeling naked, embarrassed, stupid, and phoney, but when the dust settles, they bring new enlightenment and liberation. They don’t need to be as big or public as Dalio’s, but the impact is noteworthy for us.
“The people who have the ability to fail in public under their own names actually gain a lot of power.”
- The Almanack of Naval Ravikant -
For me, one example relates to education. Like many friends I know who studied abroad, I’ve been regarded fortunate and smart for as long as I can remember, particularly where academic records can show. That, however, brought with it a tremendous sense of obligation and the fear of disappointing people who held me in high regard: parents, friends, teachers, and the community. Do not misunderstand me, having people who believe in you is a blessing and a source of motivation. However, you can’t deny the toll it eventually has on you over time if you base your identity and self-worth on it.
That weight peaked between my last year of senior high school and first year of university for me.
In my last year of senior high school, I learnt about the prospect of extending my boundaries and studying abroad. The whole of that year, I juggled my studies for the national exams, college applications and the USA Scholastic Assessment Test (SAT) exams. I would be at school during the day, study for exams and SATs at night, and do casual work on most weekends.
Majority of people who study abroad experience their first mental breakdown in their first or second year of university; for me, it started in my last year of senior high school. However, I didn’t have words to articulate it, and I had never heard about mental health before. I just dreaded that continuous feeling of anxiety and fatigue. I wrote my SAT test a month before my final national exams and two further SAT subject tests (related to what I was going to study) the morning after my high school graduation.
“Most of the time, the person you have to become [to achieve your dreams] is a high-anxiety, high-stress, hard-working, competitive person. When you have done that for twenty, thirty, forty, fifty years, and you suddenly make it, you can’t turn it off. You’ve trained yourself to be a high-anxiety person. Then, you have to learn how to be happy.”
- The Almanack of Naval Ravikant -
The national results came out, and I did well, but not as well as I or anyone expected. I felt like sh*t, especially whenever I was asked, "What did you get?" I hesitated, knowing how their faces would transform from excitement to disbelief, shock, disappointment, and ridicule—with the obvious exception of a few people, like my sister.
Looking back, though, I still feel that there was nothing I should have (or would choose to have) done differently. And I never once thought that I was trading off what I had spent my entire life working towards for the remote possibility of studying abroad.
What struck me even more was the realisation that I felt worse about ‘disappointing’ people than I did about disappointing myself. I agonised about their pain and loss of belief in me. I didn’t feel like I had disappointed myself. Yes, I felt bad about it because I knew I deserved better. It’s not what I had worked so hard for. But that pain was far from disappointment in myself.
In hindsight, it seems trivial. Besides, it was not that important, all things considered. However, that was a turning point for me. I felt like I had lost my identity and I needed a new one. Honestly, I didn't even have one in the first place. The inner me is curious, daring, attentive, creative, and competitive when he believes in something, but by shielding myself from failures and continuously choosing the known, I suppressed most of that. I only did what I needed to do to get the praise I had long been used to. However, when I couldn’t get that—and at that point I had received rejections from most of the universities I applied to—I felt empty. People couldn’t see this; it’s the sort of thing that only you know what it feels like, and really, you have no words to use in the moment.
That ignited a new journey that I have been on for the past five years: a journey of self-discovery, self-reinvention, or self-redefinition. It’s meant letting go of certain things and people, being more comfortable in my space, reiterating my values and ambitions, educating myself on what interests me, and being bolder with my yes or no when I need to. It doesn’t mean I am too different from who I was then, but my reasons are more defined and self-developed.
“There’s not really that much to fear in terms of failure, and so people should take on a lot more accountability than they do.”
- The Almanack of Naval Ravikant -
Today Ray Dalio's hedge fund is the largest in the world, managing over $235 billion. After his fall from grace, Dalio realised that he didn’t need to be right at everything and that it was dangerous to put himself in a position that implied that. Instead, he decided it was more important to know what you don’t know because then you can engage other people who know better. I found that profoundly useful. It has made me a better student in my personal and professional life. I don’t want to feel too smart to fail or learn. And I no longer feel obligated to pursue one life, one career, one way of socialising, or a defined way of thinking. When I find something interesting that also aligns with my values and goals, I want to pursue it wholeheartedly. At least that one ‘failure’ brought me this.
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