Evaluate

"Investing is making informed decisions on people and businesses with limited information”

-Ray Dalio

Every great decision begins with a strong evaluation of the situation that requires the decision. This episode of Relentless Pursuit will explore evaluation systems from three great decision makers, each operating in a different environment; Business, Government, and Military.

EVALUATE:

RAY'S SYSTEM: Ray Dalio, Founder of the world's largest hedge fund Bridgewater & Associates and prolific author of the Principles series of books has developed a system for evaluating one situation, making a decision, then recognizing similar situations and applying that same decision as a principle for the next.

1. Creating Principles: Principles are generated by struggling with things, reflecting on those things you struggle, writing down the themes that came out from the struggle (principles), then continuously improving the principles as you apply them.

2. Using Principles: As there is always more we don't know than we do know Dalio found success in investing by developing a way to deal with what he does not know. First, study history to learn possible outcomes. Next, determine the possible outcomes that are intolerable for you. Then, take action to eliminate intolerable outcomes. Finally, build what you can do from there on the principles of what you know. This system allows you to move into the unknown by having confidence your actions will eliminate the intolerable outcomes you do know.

DWIGHT'S SYSTEM: Dwight Eisenhower, 34th president of The United States of America, codified his system for evaluating an action in the Eisenhower Matrix. As The President his list of actions was limitless and the time to evaluate what to do limited. As Dwight found that “the urgent are not important and the important are never urgent”, the Eisenhower Matrix was his system to decide what to do now, schedule, delegate, or not do.

JOCKO'S SYSTEM: Jocko Willink, retired US Navy SEAL, author, and business owner, built his system for evaluating situations and making a decision on 3 key questions:

1. What is the return? (Outcome you are pursuing)

2. What is the investment? (Time, $, opportunity cost)

3. What is the risk of failure?

Learn more in Jocko Podcast Episode 371, Min 5-25.

TIP - Learn From Others

Not a business leader, president, or US Navy SEAL? Ask others who you see make great decisions how they do it. Apply their systems to your situation and build your own system to evaluate.

Lead | Produce | Pursue

Joe House