Podcast Clarification: Dalio and Buffett

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Hi Mike, Enjoyed the new podcast. Have a point to make regarding Dalio or, for that matter, any investor: Literally every single investor seeks to capture tranches of total return trends. And total return trends are, of course, a direct result of trends in price plus reinvested income. Accordingly, all investment approaches, whether “fundamental”, “technical” or ouija board-oriented in how they frame their participation, seek to arrive at participating in chunks or tranches of positive return trends – Nothing more, nothing less. Some people – such as Dalio, Buffett – are very good at discerning (i.e., have unique intuition relating to) causal and/or correlation between some non-return metrics/conditions and return trends – but the gig is, nevertheless, about return trend participation. Whether the intuition of Dalio or Buffett would/will be successful in environments other than those in which they’ve participated is quite an open question. I’d most certainly give them better odds in other environments than I would the average investor but they also certainly are not infallible and their are environments where their intuitions would prove less than sharp (and I think they’d likely both acknowledge at least that).


You don’t know exactly what Buffett/Dalio do. Of course, we know that Buffett works a ton of derivatives, hot lines to the President, etc. That is far past the value legend. On other hand we know what trend followers do. That was my point.