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.

You might like my 2017 epic release: Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets (Fifth Edition). Revised and extended with twice as much content. Out April 24th 2017.