“Mind, in the way I use the word, is not just thought. It includes your emotions as well as all unconscious mental-emotional reactive patterns. Emotions arise at the place where mind and body meet. It is the body’s reaction to your mind – or you might say, a reflection of your mind in the body. For example, an attack thought or a hostile thought will create a build-up of energy in the body that we call anger. The body is getting ready to fight. The thought that you are being threatened, physically or psychologically, causes the body to contract, and this is the physical side of what we call fear. Research has shown that strong emotions even cause changes in the biochemistry of the body. These biochemical changes represent the physical and material aspect of the emotion.” – Emotion: The Body’s Reaction to Your Mind, Chapter 1. You Are Not Your Mind, THE POWER OF NOW (Eckhart Tolle, 1999), p21
“The more you are identified with your thinking, your likes and dislikes, judgments and interpretations, which is to say the less present you are as the watching consciousness, the stronger the emotional energy charge will be, whether you are aware of it or not.” – Emotion: The Body’s Reaction to Your Mind, Chapter 1. You Are Not Your Mind, THE POWER OF NOW (Eckhart Tolle, 1999), p21
“Conflict between surface thoughts and unconscious mental processes is certainly common. You may not yet be able to bring your unconscious mind activity into awareness as thoughts, but it will always be reflected in the body as an emotion, and of this you can become aware. To watch an emotion in this way is basically the same as listening to or watching a thought, which I described earlier. The only difference is that, while a thought is in your head, an emotion has a strong physical component and so is primarily felt in the body. You can then allow the emotion to be there without being controlled by it. You no longer are the emotion; you are the watcher, the observing presence. If you practice this, all that is unconscious in you will be brought into the light of consciousness.” – Emotion: The Body’s Reaction to Your Mind, Chapter 1. You Are Not Your Mind, THE POWER OF NOW (Eckhart Tolle, 1999), p22
“Intense presence is needed when certain situations trigger a reaction with a strong emotional charge, such as when your self-image is threatened, a challenge comes into your life that triggers fear, things “go wrong,” or an emotional complex from the past is brought it up. In those instances, the tendency is for you to become “unconscious.” The reaction or emotion takes you over – you “become” it. You act it out. You justify, make wrong, attack, defend … except that it isn’t you, it’s the reactive pattern, the mind in its habitual survival mode.” – Accessing the Power of the Now, Chapter 3. Moving Deeply Into the Now, THE POWER OF NOW (Eckhart Tolle, 1999), p46
“The moment you realize you are not present, you are present. … Be present as the watcher of your mind – of your thoughts and emotions as well as your reactions in various situations. Be at least as interested in your reactions as in the situation or person that causes you to react. Notice also how often your attention is in the past or future. Don’t judge or analyze what you observe. Watch the thought, feel the emotion, observe the reaction. Don’t make a personal problem out of them. You will then feel something more powerful than any of those things that you observe: the still, observing presence itself behind the content of your mind, the still watcher.” – Accessing the Power of the Now, Chapter 3. Moving Deeply Into the Now, THE POWER OF NOW (Eckhart Tolle, 1999), p46
1. Upon Conscious Watching, Emotional Pain Can Dissipate
2. People Who Achieve Their Personal Evolution Have the Ability to Reflect on Emotional Pains
Dalio states that the biggest threat to good decision making is harmful emotions. 1
Personally, one of the most enlightening parts from The Power of Now, was about the relationship between our mind and our emotion and especially the unconscious reaction patterns between them.
As Tolle describes, how many of us are affected in terms of having emotional pain and sufferings, so to speak?
I don’t have to go deep about this important subject but I am certain that emotional pains that naturally accompany our mind-identified ego state have detrimental effects on us in a way that keeps humanity in sufferings. As Tolle describes, our pain in the form of sufferings is unnecessary and, in the spiritual context, our emotional pain that our mind identifies with causes a serious leakage of our energy, too.
It’s like a state you experience after all of serious arguments are over. You feel completely depleted after arguing like your whole life depends on it. We argue with our mental position because we are what we believe in. This is, yet, just one example where we argue with our conscious judgment. But what about the unconscious level?: Emotion can erupt out of nowhere and run our lives without clues of where it comes from.
Is there anyone who is free from this experience? If no one is free from emotion and its pain, we can further contemplate and pose a more important question: ‘Is my emotion myself?’
Upon Conscious Watching, Emotional Pain Can Dissipate
Emotions can be watched just like our thoughts can be observed. As we are not our thought – especially the incessant, barren and compulsive thinking entity -, our emotions that react to our thoughts can also be observed.
Dalio exactly catches this unconscious functioning of emotions in our body and effectively delivers his perspective. Emotions affect all facets of our life and nobody is free from them. Not to mention in the optimal decision making in business.
I observe there are several reasons why Dalio emphasizes the importance of dealing with our emotions wisely and effectively.
First, it comes from the fact that he deals with the market where market participants’ emotional reactions affect powerfully regardless of the fundamentals.
“All great investors and investment approaches have bad patches; losing faith in them at such times is as common a mistake as getting too enamored of them when they do well. Because most people are more emotional than logical, they tend to overreact to short-term results; they give up and sell low when times are bad and buy too high when times are good. I find this is just as true for relationships as it is for investments – wise people stick with sound fundamentals through the ups and downs, while flighty people react emotionally to how things feel, jumping into things when they’re hot and abandoning when they’re not.” – More Big Twists and Turns in the Economy and Markets, Chapter 4. My Road of Trials: 1983-1994, Part I. Where I’m Coming From, PRINCIPLES (Ray Dalio 2017), p54
Second, there is Dalio’s personal experience in the form of a crash, where, according to him, his emotions got the better of himself and through which he learned the value of humility.
“In retrospect, the mistakes that led to my crash seemed embarrassingly obvious. First, I had been wildly overconfident and had let my emotions get the better of me. I learned (again) that no matter how much I knew and how hard I worked, I could never be certain enough to proclaim things like what I’d said on Wall $treet Week: “There’ll be no soft landing. I can say that with absolute certainty, because I know how markets work.” I am still shocked and embarrassed by how arrogant I was.” – Finding a Way Past My Intractable Investment Problem, Chapter 3. My Abyss: 1979-1982, Part I. Where I’m Coming From, PRINCIPLES (Ray Dalio 2017), p35
Lastly, it is related with Bridgewater’s strong culture of ‘idea meritocracy’ that requires ‘radical’ truth and ‘radical’ transparency, whose required sets of principles or values can be perceived, to some people, as counter-intuitive and emotionally challenging.
“Having our work principles written out and getting in sync about them in the same way we had with our investment principles were essential for our understanding each other, especially since our unique way of operating – this radical truth and radical transparency – that led to our unique results is counterintuitive and emotionally challenging for some. Trying to understand how we could get our meaningful work and meaningful relationship through this straightforwardness led to speak with neuroscientists, psychologists, and educators over the decades that followed. I learned a lot, which I can summarize as follows.
There are two parts of each person’s brain: the upper-level logical part and the lower-level emotional part. I call these “two yous.” They fight for control of each person. How that conflict is managed is the most important driver of our behaviors. That fighting was the biggest reason for the problems Bob, Giselle, and Dan raised. While logical part of people’s brains could easily understand that knowing one’s weakness is a good thing(because it’s the first step toward getting around them), the emotional part typically hates it.” – My “Intractable” People Problem, Chapter 4. My Road of Trials: 1983-1994, Part I. Where I’m Coming From, PRINCIPLES (Ray Dalio 2017), p65
The most important reason why harmful emotions are the most perilous in decision makings and in business is that people confuse their emotions as their true selves when, in truth, emotions are but a passing phenomenon and ultimately not themselves. Emotions are there to be learned and understood. Therefore they are not to blind people to see things as they are. And that understanding, according to Dalio, starts from learning about how our brain functions via a higher level logical part and a lower-level emotional part.
Most people don’t acknowledge that our emotions can be unconscious reactions to our thoughts. Emotions are unconscious mental processes that can build up a strong energetic charge in the body. 2
The more unconscious we are, the more powerful our emotional identification with ourselves can be. As long as we are unconscious – that is, we don’t watch or observe our emotions when they come up -, the energetic charge can be strong within our body. It only disappears upon the presence – the watching consciousness. 3
We have discussed how Dalio’s insights on this aspect – conscious recognition and knowing -, especially through understanding of the functioning of ‘amygdala,’ resonate with Tolle’s wisdom in the previous article. (Mind and Beyond Mind  – Principles and The Power of Now: On Fear)
“Until you make the unconscious conscious, it will direct your life and you will call it fate,” said Carl Jung. 4 Knowing how our hidden unconscious level works, we enter into the higher level consciousness and, as a result, cannot go back to or dwell in the lower level any more, just as the darkness disappears and converted into light once exposed by it.
“That damned amygdala, which is a little almond-shaped structure that lies deeply embedded in the cerebrum, is one of the most powerful parts of your brain. It controls your behavior, even though you’re not conscious of it. How does it work? When something upsets us – and that something could be a sound, a sight, or just a gut feeling – the amygdala sends notice to our bodies to prepare to fight or flee: the heartbeat speeds up, the blood pressure rises, and breathing quickens. During an argument, you’ll often notice a physical response similar to how you react to fear(for instance, rapid heartbeats and tensing muscles). Recognizing that, your conscious mind (which resides in the prefrontal cortex) can refuse to obey its instructions. Typically, these amygdala hijackings come on fast and dissipate quickly, except in rare cases, such as when a person develops post-traumatic stress disorder form a particularly horrible event or series of events. Knowing how these hijacking work, you know that if you allow yourself to react spontaneously, you will be prone to overreact. You can also comfort yourself with the knowledge that whatever psychological pain you are experiencing will go away before very long. – b. Know that the most constant struggle is between feeling and thinking, 4.3. Understand the great brain battles and how to control them to get what “you” want, Chapter 4. Understand That People Are Wired Very Differently, Part II. Life Principles, PRINCIPLES (Ray Dalio, 2017), p224
“Unfortunately, numerous tests by psychologists show that the majority of people follow the lower-level path most of the time, which leads to inferior decisions without their realizing it. As Carl Jung put it, “Until you make the unconscious conscious, it will direct your life and you will call it fate.” It’s even more important that decision making be evidence-based and logical when groups of people are working together. If it’s not, the process will inevitably be dominated by the most powerful rather than the most insightful participants, which is not only unfair but suboptimal. Successful organizations have cultures in which evidence-based decision making is the norm rather than the exception.” – 5.5. Logic, reason, and common sense are your best tools for synthesizing reality and understanding what to do about it, Chapter 5. Learn How to Make Decisions Effectively, Part II. Life Principles, PRINCIPLES (Ray Dalio, 2017), p251
People Who Achieve Their Personal Evolution Have the Ability to Reflect on Emotional Pains
Harmful emotions are what keep us to stay in suboptimal level in our decision making. Dalio asserts that what differentiates people who can guide their own personal evolution and achieve their goals from those who can’t, is their ability to reflect on what causes their amygdala hijackings.
“For most people, life is a never-ending battle between these two parts of the brain. While the amygdala’s reactions come in spurts and then subside, reactions from the prefrontal cortex are more gradual and constant. The biggest difference between people who guide their own personal evolution and achieve their goals and those who don’t is that those who make progress reflect on what causes their amygdala hijackings.” – c. Reconcile your feelings and your thinking, 4.3. Understand the great brain battles and how to control them to get what “you” want, Chapter 4. Understand That People Are Wired Very Differently, Part II. Life Principles, PRINCIPLES (Ray Dalio, 2017), p220
Don’t subside to pain, but use pain as a reminder or a clue to reflect on. He shares that he built the habit of using pain as a trigger for quality reflections and that was the most valuable one he acquired that helped him to be effective.
“The most valuable habit I’ve acquired is using pain to trigger quality reflections. If you can acquire this habit yourself, you will learn what causes your pain and what you can do about it, and it will have an enormous impact on your effectiveness.” – d. Choose your habits well, 4.3. Understand the great brain battles and how to control them to get what “you” want, Chapter 4. Understand That People Are Wired Very Differently, Part II. Life Principles, PRINCIPLES (Ray Dalio, 2017), p222
I believe thoughtful disagreement is possible only we rise above our mind by understanding our unconscious mental-emotional patterns. Tolle said: For a fully conscious people, argument is impossible.
This – a thoughtful disagreement – is difficult for most of us yet, but I believe Dalio is showing us a case of how to reach a higher level for the best outcome.
Emotions are something we are not entirely free from in every facet of our life, let alone in business. I believe that every successful business harnesses a great decision making system and every successful business person in that system possesses a quality for that.
Dalio highlights that optimal and effective decision making comes from people who are capable of using their full potential by rising above harmful emotions – which can be overcome -, by relying on logic, reason, and common sense as our best tools, and by being evidence-based and being wary of anything else. 5
Only after putting pain into perspective and reflecting on it, comes a personal progress. In our life, there’s no avoiding pain. It’s our responsibility to use our challenges as a stepping stone to rise beyond for our personal evolution. Once we get accustomed to this process and make it a habit, there is no other way of doing and living. 6
What’s your personal system that enables you to make a great decision making for your life and for your business?
As Dalio states in the opening part of the book – that the book is intended to make readers to think not to follow or adopt his principles -, upon learning great insights and wisdom, we cannot but think for our own progress and evolution.
So, regardless of what our answer is, we can certainly remember and utilize Dalio’s formula for this matter: Pain + Reflection = Progress.
“There is nothing more important than understanding how reality works and how to deal with it. The state of mind you bring to this process makes all the difference. … All sorts of emotions come to me while I am playing and those emotions can either help me or hurt me. If I can reconcile my emotions with my logic and only act when they are aligned, I make better decisions.” 7
– Ray Dalio
- (p236) 5.1. Recognize that 1) the biggest threat to good decision making is harmful emotions, and 2) decision making is a two-step process (first learning and then deciding, Chapter 5. Learn How to Make Decisions Effectively, Part II. Life Principles, PRINCIPLES (Ray Dalio, 2017)
- (Tolle p21) – Emotion: The Body’s Reaction to Your Mind, Chapter 1. You Are Not Your Mind, THE POWER OF NOW (Eckhart Tolle, 1999)
- (p251) 5.5. Logic, reason, and common sense are your best tools for synthesizing reality and understanding what to do about it, Chapter 5. Learn How to Make Decisions Effectively, Part II. Life Principles, PRINCIPLES (Ray Dalio, 2017)
- (p153) 1.7. Pain + Reflection = Progress, Chapter 1. Embrace Reality and Deal with It, Part II. Life Principles, PRINCIPLES (Ray Dalio, 2017)
- (p133) Chapter 1. Embrace Reality and Deal with It, Part II. Life Principles, PRINCIPLES (Ray Dalio, 2017)