Ray Dalio reveals why Henry Kissinger is his favorite author right now

Ray Dalio
  • Ray Dalio, founder of Bridgewater Associates, seeks a bird’s eye view of the market and the economy.
  • To get that perspective, Dalio has been reading works by Henry Kissinger.
  • Former secretary of state and diplomat Kissinger is known for books “World Order” and “On China.”
  • Visit the Business section of Insider for more stories.

Ray Dalio, founder of the hedge fund Bridgewater Associates, has built his billion-dollar career on making predictions on companies, the market, and the economy.

To make the right predictions, he needs a bird’s eye view of the world’s financial and geopolitical happenings.

“We are like ants preoccupied with our jobs of carrying crumbs in our minuscule lifetimes instead of having a broader perspective of the big-picture patterns and cycles,” he wrote in a blog post

In a wide-ranging interview with Insider, Dalio shared that he spends a good amount of his time reading and learning to get the right perspective. Over the years, he’s recommended over a dozen books to read, ranging from works by the Dalai Lama to titles by best-selling financial author Michael Lewis. 

So what’s he reading right now?

If you looked at Dalio’s bookshelves, you’d find a number of books by Henry Kissinger, politician, diplomat, and geopolitical consultant who served as Secretary of State and national security advisor under Presidents Richard Nixon and Gerald Ford.

“[Kissinger] is a practitioner. He himself has sat in those shoes for all of those years. He’s not being theoretical. He’s not one of those studies of history. He actually had to be in the middle of it,” Dalio said.

The former secretary of state, who’s 97, is the author of over a dozen books including most recently “World Order,” published in 2014 and “On China,” published in 2011.

Former US Secretary of State Henry Kissinger holds the laudatio for German Chancellor Angela Merkel who receives the "Henry A Kissinger prize" at the American Academy in Berlin on January 21, 2020.
Former US Secretary of State Henry Kissinger holds the laudatio for German Chancellor Angela Merkel who receives the “Henry A Kissinger prize” at the American Academy in Berlin on January 21, 2020.

In the world of diplomacy, Kissinger is lauded by many for his policy of “détente,” easing strained relations through conversations, with the then-Soviet Union, and for opening US-China relations. However, others point out his role in controversial national policies such as the US’s support for Pakistan during the Bangladesh War despite an unfolding genocide and helping end the Vietnam War in 1973 despite furthering it as national security advisor for years beforehand. 

A complex figure, Kissinger’s writings have been bestsellers and acclaimed by many in diplomacy for offering both an inside view of his decisions under Nixon and Ford and the kind of complexity that Dalio prizes. His writing style can sometimes provide a bird’s eye view of history.

For example, when “World Order” came out, Michiko Kakutani, former Pulitzer-prize winning chief book reviewer of the New York Times, wrote: “At its best, his writing functions like a powerful zoom lens, opening out to give us a panoramic appreciation of larger historical trends and patterns, then zeroing in on small details and anecdotes that vividly illustrate his theories.”

The 2014 bestseller argues that the concept of world order has consistently changed based on which region of the world was the most powerful, and the book seeks to answer how the world can build an international world order in an era of conflict, rapid technological advance, and ideological extremism.

In his second most recent book, “On China,” the diplomat gives an overview of the East Asian country’s history from a foreign policy perspective. It also offers an inside view of what went into Nixon’s historic trip to Beijing in 1972. Its last chapter focuses on China’s future, specifically as it relates to the US.

In it, he warns of potential conflict between the two powers.

“The United States does need to get tough with China. If China has its way, it will keep robbing the United States and American companies of their technology and intellectual property,” he wrote.

Since then, he’s been an even louder advocate for the need to resolve mounting tensions between the US and China, a topic that deeply concerns Dalio.

“We will slide into a situation similar to World War I,” Kissinger warned in a 2020 panel discussion if relations don’t ease.

For Dalio, the former secretary of state’s predictions are deeply informative.

“You don’t get a person who really knows history, and really has lived history as a practical decision maker and is clear and articulate – you don’t get many of those,” Dalio said.

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Bank of America, KPMG, Mastercard, and some 60 other top companies adopt new ESG metrics

Brian Moynihan, the chief executive of Bank of America.
Brian Moynihan, the chief executive of Bank of America.

  • Some 60 major companies have agreed to adopt a new ESG reporting framework. 
  • ESGs are metrics that measure a company’s environmental, social, and governance progress. 
  • The effort is being led by the World Economic Forum and the International Business Council, run by Bank of America CEO Brian Moynihan. 
  • Visit Business Insider’s homepage for more stories.

Executives from Bank of America, Mastercard, KPMG, and about 60 other large companies announced Tuesday they’ll be adopting a new reporting framework for environmental, social, and governance standards (ESGs) in partnership with the World Economic Forum. 

Other companies that have signed on to this reporting framework include Salesforce, Unilever, Dell, and Sony. 

ESG standards are a set of criteria used to measure a company’s performance on things such as how the company is impacting the environment (like its amount of toxic emissions), how it manages relationships with its employees (does it encourage employees to volunteer), and how the company runs internally (boardroom diversity).

If widely adopted, these standards, called “Stakeholder Capitalism Metrics,” have the potential to transform what it means to operate a large corporation. It could make it standard procedure for a major company to report its ESG metrics, just like it’s standard (in fact, required) for a company to report on its financial metrics. 

Many in the business community see ESG metrics as a concrete way to advance stakeholder capitalism, the leading economic theory today that says companies are responsible to all stakeholders, including their employees, customers, the environment, as well as their shareholders. 

“We have to deliver great returns for our shareholders and help drive progress on society’s most important priorities,” Brian Moynihan, CEO of Bank of America, and chairman of the International Business Council, said in a statement. “That is stakeholder capitalism in action.”

The next step in a trend

In September, the World Economic Forum and the International Business Council (IBC), run by Bank of America CEO Brian Moynihan, partnered with “the Big Four” accounting firms to create the reporting framework of 21 ESG standards. The big four – Deloitte, PwC, EY, and KPMG – provide financial auditing and other professional services. 

Insider recently spoke with Klaus Schwab, World Economic founder and executive chairman, about the more than 60 companies signing on to these metrics. 

“At the moment you have a situation where a company reports mainly about their intentions. Now we have to walk the talk,” he said. 

Read the original article on Business Insider

Hundreds of startups go public every year. Only 20 have ever been founded and led by women.

Katrina Lake
Katrina Lake is the founder and chief executive of Stitch Fix. She is one of just 20 women who have led a startup through to an initial public offering.

  • Each year since the New York Stock Exchange was founded, in 1817, hundreds of companies have gone public. Only 20 have been founded and led to an IPO by women.
  • There are many reasons women and minorities have been held back. Among them: Fewer than 13% of all VC decision-makers are women, and less than 3% of all VC dollars flow to companies led only by women.
  • To achieve gender equality, women need to found and join the next Fortune 500s to shape a diverse corporate culture from the beginning and accumulate generational wealth for themselves.
  • Visit Business Insider’s homepage for more stories.

2020 was a record year for initial public offerings in the US, with 442 logged as of December 14. Yet only five of those were companies founded and led by women, according to research by Business Insider and information provided by Nasdaq. 

Historically, only 20 women have ever founded and led a company through to an IPO.

Some companies have gone public with female CEOs who were not their founders, but that number is small compared to the majority (at this writing, only nine companies have fit that description this year).

The jarring discrepancy was pointed out by Julie Wainwright, the founder of the luxury consignment shop The Real Real. In May 2019, Wainwright became the 15th woman to found and take a company public.

To achieve gender equality, the fastest way forward is to close the entrepreneurial gap and support more women founding Fortune 500s. That’s because women aren’t reaching powerful positions often enough when they go the traditional corporate route.

Also, we need more women to try and become insanely rich.

Money equals power, and the only way to generate enough wealth to become one of the world’s most powerful people is to start a company.

Corporate America is broken for women. They need to blow it up and rebuild it if they want more leadership positions.

We know women fall behind men from the very first promotion.

A 2019 Lean In study called this the “broken rung” in the corporate ladder. The workforce won’t improve for women anytime soon.

  • At the current rate, it will take until 2059 for women to achieve pay parity.
  • Women who do reach the top still hit a ceiling. They get stuck as COOs – the No. 2’s.
  • Only 7% of Fortune 500 CEOs are women.

The best way to fix this isn’t to blame or exclude men, who are in charge and can be powerful allies. But we also can’t expect them to change all their unconscious biases, which can be blind spots.

Instead, corporate America needs to be blown up and rebuilt, with diversity as a pillar from inception, led by more women and BIPOC founders.

If women want to become as powerful as men, they need to create rivaling fortunes. The only way to do that is to start the next Fortune 500s.

rich founders
The world’s 10 richest people in 2019 were all men. They all founded their own companies. In 2020, Alice Walton, whose father created Walmart, crept up to No. 9 with a net worth of $54.4 billion.

Warren Buffett. Jeff Bezos. Bill Gates. The richest people in the world all started their own companies – or inherited their fortunes from someone who did.

That’s because founders tend to own large chunks of their companies when they exit, far larger portions than employees working for them ever could.

If women want to become as powerful as men, they need to start the next Fortune 500s and create rivaling fortunes.

But in the 204-year history of the New York Stock Exchange and Nasdaq – where hundreds of companies go public each year – only 20 have been founded and led by women. Eighteen of those IPOs were in just the past seven years.

When women do try to start companies, numerous pitfalls prevent them from scaling their ventures.

Only 13% of all venture-capitalist decision-makers are women, according to an AllRaise.org follow-up to its 2019 report. Pitchbook reported that in 2019 2.7% of VC capital went to companies founded only by women, while companies cofounded by both men and women garnered 14%.

For women of color, the investment gap is even wider.

DigitalUndivided is a nonprofit social startup focused on programs and training that foster economic growth in Black and Latinx communities. In 2016 it launched ProjectDiane, a biennial research study that tracks investment in companies founded by Black and Latinx women. Its latest report, released this month, showed some progress for these communities. But not enough.

Total funds raised by Black and Latinx women in 2019 grew to $3.1 billion, ProjectDiane data shows. The number of Black women founders reported to hit the “million-dollar club” in investment rose to 93, compared to 34 in 2018, while 90 Latinx women hit that milestone.

But the report points out glaring gaps. The median seed funding for startups overall is $2.1 million, but for Black and Latinx women founders the median is $475,000. For those raising less than $1 million, the median seed funding drops to $125,000 for Black women and $200,000 for Latinx women.

Since 2018, Black and Latinx women have received only .64% of VC funding.

Since 2018, Black and Latinx women have received only .64% of VC funding.

“Our mission is to create a world where all women own their work, where women have wealth,” Lauren Maillian, the CEO of Digital Undivided, said. “It is only through our jobs, our careers, and our work, that is the path to wealth creation. Not just for women, for all people, but women of color get left behind that.”

“We upskill and re-skill and equip women of color to compete in these spaces and places that are not designed for them to succeed,” Maillian said.

Lauren Maillian, CEO of Digital Undivided
Lauren Maillian is the CEO of DigitalUndivided, which launched Project Diane to track funding of companies founded by Black and Latinx women.

When female founders do get funded, expectations are different

Rent the Runway CEO Jennifer Hyman is one of the most successful female founders. She has been outspoken about the different challenges men and women founders face, from investors and the press.

“I haven’t been given the permission or privilege to lose a billion every quarter,” Hyman said on CNBC, shortly after profitless Uber went public and cash-burning WeWork filed its now rescinded S-1.

Julie Wainwright, the founder and CEO of The Real Real, said she sees three main barriers to entry for women in entrepreneurship. One of them is the expectations women set for themselves.

  • Women aren’t thinking about starting businesses or planning for outsized success early enough. And when they do, they aren’t dreaming big enough. One survey of 57 women CEOs found that only 12% of them planned to be CEO someday. The rest had to be told it was something they should consider.
  • There aren’t enough women in venture capital with big funds behind them who can lead large investments and write follow-on checks. “When you raise capital, if you’re running something big, it will require more money, and that person who initially funded you will go back to their fund to lead the next round,” Wainwright says. “And they have to have enough capacity to keep funding you so you’re not left in the cold. . . . You need people with billions behind you.”
  • There’s no “PayPal mafia” for women who can support female founders, rally behind them, and push through their success. The PayPal mafia refers to the early PayPal employees, including Max Levchin, Joe Lonsdale, and Peter Thiel, who’ve all gone on to be successful entrepreneurs, aided partly by their friendship during PayPal’s startup days. “Those guys have a tremendous network where they’re supporting each other,” Wainwright says. “It’s not a formal thing. But when people come up with ideas, they push them to think bigger. They’ve got the support of the mob once they go. And the mob isn’t there to make sure they’re successful. So because there are not enough women in startups, there are not enough mobs.”
Julie Wainwright The Real Real
Julie Wainwright is the former CEO of Pets.com and the founder of The Real Real.

Despite the barriers, it’s time for more women to try. To stop thinking What if it fails? and instead think What if it works?

For an extra nudge, Wainwright knows a widely kept secret: Most successful startup founders aren’t anything special. The difference is they tried, and you didn’t.

“To be honest, half the people that I meet are not a Bill Gates, Steve Jobs, or even an Elon Musk,” she said.

“What they are is they’re determined. They have a goal and they have a big vision and they don’t give up, and they did it. They didn’t think about everything that would possibly go wrong. They thought, I am going to do this, I can make this happen.

Women starting businesses is great for the economy

mckinsey gender study

Gender equality in business isn’t only a moral imperative. When it’s achieved, it improves a company’s bottom line and boosts the global economy.

A recent McKinsey study found that gender equality could unlock up to $28 trillion in global GDP.

Companies also perform better when more women are in power. A Bank of America paper found that S&P 500 companies with more diverse boards and a higher percentage of women in leadership positions delivered higher returns on equity.

Fortune 1000 companies with female CEOs have been found to perform three times as well as those led by men.

“Understanding the link between women’s empowerment and the wealth and health of societies is crucial for humanity,” Melinda Gates wrote in “The Moment of Lift.”

“If you want to lift up humanity, empower women, she said. “It is the most comprehensive, pervasive, high-leverage investment you can make in human beings.”

Read the original article on Business Insider

Elon Musk said a college degree isn’t required for a job at Tesla – and Apple, Google, and Netflix don’t require employees to have 4-year degrees either

Tesla employee
Elon Musk doesn’t require job candidates to have college degrees.

  • Elon Musk said having a college degree doesn’t mean you have “exceptional ability” during a fireside chat at the Satellite 2020 conference. He added that it’s “not for learning” and “basically for fun.”
  • Many of the nation’s most popular companies to work for don’t require a college degree, and certain jobs are more likely to be filled with non-college graduates than others, LinkedIn has found.
  • Top business executives have begun questioning whether college degrees really prepare workers for careers, while some are starting to hire more and more non-college graduates.
  • Visit Business Insider’s homepage for more stories.

Students assume getting a four-year degree – and taking on the thousands of dollars of student-loan debt that comes along with it – is the only way to get your foot in the door at top companies such as Tesla, Apple, and Netflix. 

But that isn’t always true. Even the CEO of Tesla doesn’t think you need it.

Tesla CEO Elon Musk said colleges “are not for learning,” but rather a place to have fun, during a conversation at the Satellite 2020 conference earlier this year. Musk said you can learn anything online for free, and noted that billionaire moguls like Bill Gates and Oracle’s Larry Ellison dropped out of college. Ideally, he added, you would have dropped out of school “and did something.”

Musk joined prominent business leaders who have also questioned the need for four-year degrees, such as Apple CEO Tim Cook and Siemens USA CEO Barbara Humpton. Cook said in 2019 that about half of Apple’s US employment last year included people without four-year degrees. Cook reasoned that many colleges do not teach the skills that business leaders need most in their workforce, such as coding. 

Read more: EXCLUSIVE: SpaceX is looking to raise another big round of funding and wants to double its valuation to up to $92 billion

Humpton also dismissed the idea that a four-year degree guarantees career-readiness: “All too often, job requisitions will say they require a four-year degree, when in fact there’s nothing about the job that truly requires a four-year degree – it merely helped our hiring managers sort of weed through the crowd and get a smaller qualified candidate group,” Humpton said at the White House in 2019.

You don’t need an Ivy League diploma to get a job at Apple or Tesla – but you would get paid more on average if you had one

Now, prominent companies such as Google and Apple are hiring employees who have the skills required to get jobs done, with or without a degree. Glassdoor found firms like Google, Apple, and IBM don’t require a college degree to land a job. Google recently launched a new selection of courses for Google Career Certificate, a six-month program that prepare participants for in-demand jobs. 

That being said, college degrees seem to pay off. Workers that hold at least a bachelor’s degree earned $502 more in median weekly earnings than those with just a high school education, according to a May 2020 report from the US Bureau of Labor Statistics. Additionally, the unemployment rate among those with less than a high school degree is more than double that of bachelors degree holders.

Read more: Apple just launched a new camera feature for the iPhone 12 Pro that could change the way we think about smartphone photography

But because degrees often require taking on student debt, many Americans cannot afford college degrees. Only 42% of high-school sophomores go on to earn a two-year or four-year degree, per the US Department of Education. Even among students who graduate from college, a significant number of new graduates are underemployed, meaning they work jobs that don’t require a college degree.

As many expect automation to displace a quarter of the workforce, experts and researchers are already tossing around alternatives to help prepare young employees for work. Apprenticeship programs, which mix school and on-the-job training, could better prepare the workforce of the future, Business Insider reporter Rich Feloni reported.

“I don’t consider going to college evidence of exceptional ability,” Musk said at the Satellite conference. “Did Shakespeare even go to college? Probably not.”

Read the original article on Business Insider

Netflix’s Reed Hastings, Instagram’s Kevin Systrom, and others join billionaire investor Ray Dalio for massive charity giveaway

Ray Dalio
  • Top business executives and leaders are joining famed investor Ray Dalio to fund a massive charity giveaway coming sometime this week.
  • The leaders include Netflix CEO Reed Hastings, Instagram co-founder Kevin Systrom, media mogul and Thrive Global founder Arianna Huffington, and author and podcaster Jay Shetty.
  • Last week, Dalio gave away 10,000 “charity gift cards,” each worth $100, that anyone could claim and donate. They were all claimed within two hours.
  • Dalio said in a statement he wants to encourage people to rethink gifting, to donate more to charities in a time of economic need rather than purchase “useless material stuff.”
  • Visit Business Insider’s homepage for more stories.

Last week, Ray Dalio, investor and founder of the world’s largest hedge fund Bridgewater Associates, gave away 10,000 “charity gift cards” each worth $100. Anyone could claim a gift card and donate it to their charity of choice. 

All 10,000 gift cards were claimed within two hours, a sign of the massive need many nonprofits find themselves in due to the coronavirus pandemic’s economic downturn. 

Now, other leaders in the business community are joining Dalio in his effort to fund another round of giveaways. The list of leaders include Netflix CEO Reed Hastings, Instagram co-founder Kevin Systrom, media mogul and Thrive Global founder Arianna Huffington, and author and podcaster Jay Shetty. 

“I was so happy that so many people signed up, but felt terrible that others were closed out,” Dalio said in a social media post

The number of gift cards to be made available in this upcoming round has yet to be determined, per a spokesperson for Dalio. The new gift card launch is expected this week. 

For the famed investor, the initiative is a chance to rethink holiday gifting amid a time of dire need. Dalio has previously spoken about inequality in America, saying in an April interview that America’s jarring inequality is a “national emergency” that is threatening capitalism.

“Imagine the impact we could have if people started giving each other the ability to donate to their favorite charities rather than giving them useless material stuff,” Dalio said in a statement.

Read the original article on Business Insider