Principles by Ray Dalio
My Call to Adventure
Ray speaks about his childhood.
The chapter has general information about Dalio’s upbringing, his relationship with his mom and dad and his political views. However, by the end of the chapter, he gets into his learning about investments as well. He started investing in stocks from the money he earned by doing small jobs like newspaper distribution in his school days itself. He recalls how he purchased a chunk of shares of an airline company, trading below $5. He alarmed, although it was not a wrong strategy, but got his money tripled and confidence boosted in the early days of his investment journey.
As 1960s was an amazing time for the US stock markets, Ray then began to do “Dollar-Cost Averaging” which is putting in same amount of money in each of the stocks of the portfolio every month. This strategy does not give relevance to the number of stocks purchased, rather the amount which is invested in each stock is a consideration for portfolio allocation. In his teens, Ray was making good money and enjoying his time.
The story in this chapter continues till the year 1966, when the US market peaked. In the next chapter, Ray discusses what mistakes he made, which showed up in the bear phase of the market.