Rui Daglio mentioned in his book Principles that his son Paul was admitted to a psychiatric ward of a hospital because of bipolar disorder. Dario and Paul's mother, as well as Paul, started tossing and turning for three years. Paul sometimes becomes extremely manic and sometimes falls into deep depression. Dario often communicates with people who take care of Paul in order to know his condition and what to do.

The final result of this disaster is excellent. Thanks to the help Paul received and his excellent personality, he survived this ordeal and became better. The article does not describe in detail what efforts Dario made and what role he played in Paul's tempering process.

What Dario experienced is just as described in the previous article of this book:

Since college, Dario has been interested in finance. 197 1 year, President Nixon announced that the United States would no longer abide by the promise of allowing the dollar to be freely convertible into gold. He has witnessed it for decades since this incident. Just before the policy makers were ready to let the currency appreciate, they vowed that they would not do so, so Dario learned this. When government policy makers promise you that currency depreciation is not allowed, the more firmly they make such a promise, the more serious the situation may be, and the greater the probability that currency depreciation will happen soon.

However, the depreciation of the dollar caused by Nixon's concluding speech did not lead to a sharp drop in the stock market, but rose by about 4%. This result was beyond Dalio's expectation, so he began to carefully study the past several currency devaluations, and then figured out the reasons and logical relations of the situation.

This made Dario understand: you'd better find out what happened to others at other times and other places, because if you don't do this, you don't know whether these things will happen to you, and once they happen to you, you don't know how to deal with them.

1975, Daliao founded Qiaoshui. What he does at this time is to track the market dynamics and help customers overcome the market. During this period, he began to design a mechanized market model, and through various data analysis, he understood the relationship and obtained the decision-making rules for establishing the model.

These models made Dario earn a lot of money, but a "never lose money" bet cost him about $654.38 million+worth, which was equivalent to most of his personal wealth at that time, and also brought losses to his customers. The most painful lesson that keeps coming true is that nothing is certain, and there is always a risk that will make you suffer huge losses, even at the seemingly safest ferry, so you'd better always assume that you have never seen anything.

This lesson has changed Dario's decision-making way in many ways, and these changes are crucial to Dario's success. After making many other mistakes, Dario completely changed his behavior.

1982 Dario ushered in the worst defeat in his life. 1In August 1982, Mexico defaulted on its debt, and many other countries are likely to follow suit. As one of the few people who foresaw this situation, Dario confidently declared that the United States was heading for the Great Depression. Based on this judgment, in order to hedge the most unfavorable possibility, he began to buy gold and treasury bonds futures, which is a risk control way to bet on the aggravation of credit problems.

But Dario was wrong. In the following year 18, the American economy experienced the most prosperous period of inflation-free growth in history.

Making such a big mistake in full view of the public is almost devastating to Daglio, not only in terms of reputation, he almost lost everything he had created before.

Through calm analysis, Dario found out the mistake that led to his collapse:

First, ridiculous overconfidence, indulging yourself in emotions;

Second, I once again realized the value of learning history, and everything was just "bringing up the past";

Third, how difficult it is to grasp the timing of the market.

"Even after I was defeated, I knew I had to take all kinds of risks to pursue this wonderful life, so my question was how to' cross this dangerous jungle' without being killed on the way. In retrospect, my failure was one of the best things that happened to me, because it made me humble, and I needed humility to balance my aggression. I learned a good feeling of being afraid of making mistakes, which changed my thinking mode from thinking' I am right' to asking myself' how do I know I am right'. "

After the lesson of this tragic failure, Dario understood that when faced with two things that you both need but seem to contradict each other, you need to make a patient choice. In this way, you will find out how to have both as much as possible. There is almost always a favorable road that you haven't found yet, so you need to keep looking until you find it, instead of being satisfied with the obvious choice at the beginning.

Although this process was very difficult, he finally found a way to have both fish and bear's paw-"the holy grail of investment", which is also the success of The Secret Behind Qiaoshui.

Daglio has a valuable quality. No matter what setbacks he encounters, what he does is not to be passive, to avoid or evade responsibility, but to face the facts positively, to respond positively and to face the challenges directly, not only to find corresponding solutions, but even to make every previous failure a reason for his failure.

Whether it is some small failures or the disaster of 1982, the son Paul's two-way mental disorder is the same.

Dario said that my fear of boredom and mediocrity is much more serious than failure. For me, good things are better than bad things, and bad things are better than mediocre things. Because bad things at least add flavor to life.

This is why mediocre people are mediocre. Failure is not terrible. The terrible thing is that they are unwilling to face failure.