Crossing the threshold, 1967-1979

Crossing into the professional world forced a blunt confrontation: opinions are cheap, and reality collects payment on every one of them eventually. I went from Long Island University into an MBA at Harvard Business School, then onto the trading floor of the New York Stock Exchange, and I watched genuinely smart, well-credentialed people lose money and credibility because they stayed attached to being right long after the market had told them, repeatedly, that they weren't.

I started treating markets less like a domain for clever opinions and more like a puzzle with strict, testable rules. Every position I took had to survive stress, genuine uncertainty, and the fact that other people in the market were operating on incentives I might not fully see. The more time I spent in that environment, the clearer it became that ego — the need to defend a prior view rather than update it — was the single biggest enemy of good trading decisions, more damaging than any specific analytical mistake.

So I began deliberately building discipline around that weakness. Write the view down before acting on it, so it can be checked later against what actually happened. Size every risk conservatively enough to survive being wrong, because you will be wrong regularly no matter how good your process is. Assume, as a default posture, that you're missing something important — and treat disagreement from someone credible not as an insult to absorb, but as a test worth taking seriously.

This period is also when I founded Bridgewater, in 1975, out of a two-bedroom apartment in New York, initially as an advisory business helping corporate clients manage currency and interest-rate risk rather than as the investment firm it would later become. The habit that formed in those early years, more than any single trade, was the shift away from relying on heat-of-the-moment instinct and toward relying on a documented system — one I could trust precisely because it had already been tested, especially in the moments when pressure made trusting my own instinct feel most urgent and least reliable.