“The type of thinking that is necessary to succeed in the
markets is entirely different from the type of thinking that is required to
succeed in school….Most school education is a matter of following
instructions—remember this; give it back; did you get the right answer? It
teaches you that mistakes are bad instead of teaching you the importance of
learning from mistakes. It doesn’t address how to deal with what you don’t
know. Anyone who has been involved in the markets knows that you can never be
absolutely confident. There is never a trade that you know you are right on. If
you approach trading that way, then you will always be looking at where you
might be wrong. You don’t have a false confidence. You value what you don’t
know. In order for me to form an opinion about anything involves a higher
threshold than if I were involved in some profession other than trading. I’m so
worried that I may be wrong that I work really hard at putting my ideas out in
front of other people for them to shoot down and tell me where I may be wrong.
That process helps me be right. You have to be both assertive and open-minded
at the same time. The markets teach you that you have to be an independent
thinker. And any time you are an independent thinker, there is a reasonable
chance you are going to be wrong.” –Ray Dalio (as quoted in Hedge Fund
Market Wizards)
