Bridgewater Had Believability Issues
Also WeWork’s bankruptcy, Goldman carried interest and laser eye blindness.
You could imagine three phases in the life of a wildly successful billionaire hedge fund manager. In Phase 1, before you become a wildly successful billionaire, you will have access to more or less accurate facts about the world. You’ll be motivated to find out true facts, because you are still trying to become successful, and you will succeed or fail based on your ability to understand the world correctly. If you make a mistake, you will lose money, and nobody will sugarcoat it or tell you that you are a hidden genius. Of course it is hard, for anyone, to find out true facts and understand the world correctly, and you might not make it. But if you do become a wildly successful billionaire hedge fund manager, it’s because you were good at it, because you had an unusual skill for finding out and understanding the truth.
In Phase 2, after you become a wildly successful billionaire, your access to information will change, in some good ways (you can call people and ask them questions and they will answer) but also in some bad ways (the people around you will have a tendency to tell you what you want to hear). “I think we should buy soybean futures,” you will say, and your subordinates will say “great idea boss” because you have a lot of money and they hope you will pay them some of it. The combination of your money and your past success will make everyone defer to you in ways that make you worse at your job; you will not get the spirited pushback and frank debate and negative feedback that you got in your scrappier anonymous days.