This is Masters in Business with Barry Redholz on Bloomberg Radio.

I'm Barry Redholz, you're listening to Masters in Business on Bloomberg Radio.

My extra special guest this week is Ray Dalio.

He is the founder of Bridgewater, one of the world's largest hedge funds.

He is the author of numerous best-selling books, including principles, life and work,

and big debt crisis. His latest is called the Changing World Order,

why nations succeed and fail.

Ray Dalio, our returning champion, welcome back to Bloomberg.

Thank you, Barry. It's always a pleasure to be with you.

So, before we get into the book, I want to give listeners who may not be familiar with some of your work,

a little background, and you first came to my attention for the work you do on mistakes,

as quote, opportunities to learn and improve, the key to success in life is learning how to fail well.

Tell us a little bit about that. What led you to that understanding?

The markets.

But, I mean, it's true, like, pain is a great teacher, you know?

So, I learned pain plus reflection equals progress.

So, the markets, you know, markets teach you humility.

You've got to be aggressive and you've got to be defensive at the same time.

So, what I learned is whatever successes I had in life had to do more with how I dealt with what I didn't know than what I know.

And so, that means taking it in, but making mistakes and reflecting on them, hey, that's a great way to learn, right?

It certainly is. And there's another issue that you bring up related to that, which is hyper-realism.

You have to understand how reality works, then learn how to deal with it, which kind of raises an issue.

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