To make money in the markets, harness “the power of not knowing”…

The excerpt below may be the most succinct investment (and life) wisdom you’ll ever read. It’s from Ray Dalio. He’s the billionaire founder of Bridgewater Associates. Bridgewater is the largest hedge fund in the world ($122 billion in assets under management). And, as we noted in Tuesday’s Dailywhen Dalio talks, wise investors listen.

Dalio discusses his relentless drive to understand why others disagree with him. It’s his secret to his overwhelming success in the markets.

Understanding others’ contrary reasoning—and a willingness to change his own views when others’ prove better—keeps him on the right side of almost every trade…

This episode taught me the importance of always fearing being wrong, no matter how confident I am that I’m right. As a result, I began seeking out the smartest people I could find who disagreed with me, so that I could understand their reasoning. Only after I fully grasped their points of view could I decide to reject or accept them. By doing this again and again over the years, not only have I increased my chances of being right, but I have also learned a huge amount.

There’s an art to this process of seeking out thoughtful disagreement. People who are successful at it realize that there is always some probability they might be wrong and that it’s worth the effort to consider what others are saying—not simply the others’ conclusions, but the reasoning behind them—to be assured that they aren’t making a mistake themselves. They approach disagreement with curiosity, not antagonism, and are what I call “open-minded and assertive at the same time.”

Dalio’s advice is simple… but not easy. We follow it to the best of our abilities at PBRG. It’s one of the reasons we rely a great deal on the feedback of our community members… not just the ideas of our analysts. Whenever you find anything you disagree with, please don’t hesitate to let us know.

You can read Dalio’s full essay on “open-minded assertiveness,” for free, right here.