This quote from Ray Dalio isn’t strictly about financial investing. It was originally about building and growing companies. But in reality, it’s a reminder you can apply to almost everything.
In markets, think about green candles and red candles. Candles are merely outputs, formed by a chain of behaviors, emotions, incentives, and environmental factors driving people to buy, sell, and trade assets.
If you only look at candles or technical indicators without understanding what created them, all you’ll see are red and green colors and lifeless lines on a chart.
Behavior, psychology, incentives, and context are the real substance. That’s why it’s worth digging deep into what Ray Dalio calls “the force behind the thing.”