You raise interesting points about how Dalio’s decision rule signals actually work. Based on Schwager’s interview of Dalio it would seem that Dalio has quantitative portfolio risk based signals just like [Tom] Basso does. [Refer to your Basso Q&A episode. Could it be that failing a fundamental signal, portfolio risk can start an exit/re-balance program on positions exceeding a covariance threshold in one of Dalio’s portfolio risk decision rules? I am looking forward to your future podcast on this topic.
I do not know Dalio’s systems. He has said he uses only fundamental data, but 100% systematically.
That seems original, if it is indeed his trading approach.