The US and UK have never been as intransigently divided since the 1930s. Ray Dalio has made this observation about the US. I concur. I add the UK (and possibly much of the Western World) to this mix.

Ray Dalio (wiki) should be listened to, in my view, whether you agree with him or not. He is in the top 100 richest people in world. Dalio has pledged half that wealth to the Bill Gates foundation. He has a coherent and thought provoking personal philosophy (Principles here; previously available as a free download but forthcoming as a book soon) that Dalio also applies to his hedge fund, Bridgewater, one of the largest and most successful in the world (which works under this culture: “an idea meritocracy that strives to achieve meaningful work and meaningful relationships through radical transparency.”).

I rate his principles along with the Netflix culture slides (the 2001 original slides here, the update in 2016 and most recent update at Netflix; ) as required reading on corporate culture. You might not agree with the principles but their influence has certainly been felt in modern corporate culture and management over the last decade.

Dalio's views on mistakes sound very much like Neil Gaiman's view on mistakes, one written by a story teller (I take a look at Gaiman's commencement address extolling mistakes in an earlier post) and the other written by an "investor-philosopher".

While his principles and this YouTube video (see below) on his economic model thinking (incidentally there is evidence that he predicted and was somewhat prepared for the last great economic crash) are good background reading...

...For the present you should read these three posts of which I detail some extracted notes and commentary below. The posts are on (i) populism, (ii) rising risks and (iii) divisions in society

My reading of his view is that geopolitical risk is high at the moment. Under one interpretation the highest since the 1930s. This is because there are deep and widening divisions in society. There is reluctance on all sides to retreat (no one seems to like the idea of retreating any more) or move away from their positions.

You can see this in the approval ratings for Donald Trump from his Republican supporters. Out of his 35% job approval ratings (that's still 35 out of 100 Americans),

Approval rating  from Republican supporters is running at close to 80% and has been consistantly 80% to 90% all year (given the +/- 3% error). People are not changing their view (much, very slight down tick over the year). Democrats have not moved from their rock bottom approval rating.

I like to joke that the lesson we learn from history is that we do not learn much from history.

In the long cycle of history and human civilisations, in transient intransigent special interests or narrow elites have occurred at the end of dynasties. How conflict is handled at these moments in time are very telling.

In Populism (see the full analysis here)  Dalio writes "Given the extent of it now, over the next year populism will certainly play a greater role in shaping economic policies. In fact, we believe that populism’s role in shaping economic conditions will probably be more powerful than classic monetary and fiscal policies (as well as a big influence on fiscal policies). It will also be important in driving international relations. Exactly how important we can’t yet say. We will learn a lot more over the next year or so ... 

...populism is a rebellion of the common man against the elites and, to some extent, against the system. The rebellion and the conflict that comes with it occur in varying degrees. Sometimes the system bends with it and sometimes the system breaks. Whether it bends or breaks in response to this rebellion and conflict depends on how flexible and well established the system is. It also seems to depend on how reasonable and respectful of the system the populists who gain power are...

His conclusions in Risks are rising  are:

"...We bet on the events/outcomes that we think we have an edge in understanding. For events/outcomes where we don’t think we have a particular edge—e.g., political events—we aim to construct our portfolio to be relatively neutral or balanced to those risks...

...As a rule, periods of lower risk/volatility tend to lead to periods of greater risk/volatility. That is reflected in our aggregate market volatility gauge (see below), and markets are pricing in volatility to remain low next year too.... When it comes to assessing political matters (especially global geopolitics like the North Korea matter), we are very humble. We know that we don’t have a unique insight that we’d choose to bet on. Most importantly, we aim to stay liquid, stay diversified, and not be overly exposed to any particular economic outcomes. We like to hedge our bets, though we are never completely hedged. We can also say that if the above things go badly, it would seem that gold (more than other safe haven assets like the dollar, yen, and treasuries) would benefit, so if you don’t have 5-10% of your assets in gold as a hedge, we’d suggest that you relook at this. Don’t let traditional biases, rather than an excellent analysis, stand in the way of you doing this...

...So, where does that leave us?

While I see no important economic risks on the horizon, I am concerned about growing internal and external conflict leading to impaired government efficiency (e.g. inabilities to pass legislation and set policies) and other conflicts.

I of course hope that the principles that bind us together are stronger than the ones that divide us. I believe that this is a time when it is especially important for us a) to be explicit about what our principles are in order to be clear about what we agree and disagree on, b) to practice the art of thoughtful disagreement, and c) to respect our ways of getting past our disagreements so we can start rowing in the same direction. I believe that how well this is done will have a greater effect on the economy, markets and our overall well-being than classic monetary and fiscal policies, so I continue to closely watch how conflict is handled while tactically reducing our risk to it not being handled well."

Cross fertilise. Read about the autistic mind here and ideas on the arts here. On investing try a thought on stock valuations.