Betting On the Trend Has Been Making Investors Rich
Most of the time, investors have to choose a side: Team Buffett or Team Soros...
The successes of investors Warren Buffett and George Soros are legendary. Whether it's Soros making $1 billion when he "broke the Bank of England" or Buffett's massive return on Coca-Cola's (KO) stock, few have been more successful in the markets than these guys.
But if you're going to model your investing on these legends... you usually have to pick one or the other. Their strategies take opposing views of volatility and risk.
Most of the time, you have to be on either Team Buffett or Team Soros.
Buffett is known for his caution and his devotion to cheap stocks with fundamentally strong businesses. He's a long-term investor, not a speculative trader. And he has proven that his strategy works in the long run. Buffett's Berkshire Hathaway (BRK-B) has returned 14% a year over the past decade.
As Buffett famously put it, "Only when the tide goes out do you discover who's been swimming naked." It's another way of saying that a bull market gives cover to overly risky bets. But if you've been taking on risk without doing your due diligence and covering your downside, you'll be exposed when the bubble bursts.
Meanwhile, Soros loves to join powerful market trends. As he remarked in 2009, "When I see a bubble forming, I rush to buy, adding fuel to the fire."
To Soros, a speculative frenzy isn't a red flag. It's an opportunity... When markets detach from fundamentals, they can rip higher at rates that simply can't happen when earnings growth has it pegged down.
At times like these, Soros' philosophy is to throw out the fundamentals and ride investor psychology instead.
You have two of the most successful investors of all time offering totally contrary wisdom.
Soros wants to skinny-dip until the very last wave rolls in. Buffett says to be careful and to wear your trunks.
It's a fundamental question that underpins investing...
You see something happening – you see the trend shaping up and money moving. Is it time to jump on the trend and ride the wave? Or do you bet on "reversion to the mean" where things return to their true value?
Most of the time, there's no single correct answer.
I tend to be more conservative and focus my portfolio on quality businesses trading at reasonable valuations. I don't mind missing out here and there on some hot trend... I let my wealth compound over time.
For the most part, I'd pick Team Buffet over Team Soros.
But if you have been on Team Soros lately, you're likely making a lot of money. You may have spotted stocks like Nvidia (NVDA) and Palantir Technologies (PLTR) and bought even after they shot up a few hundred percent. You're making money because they have continued to march even higher.
Many investors have turned to "momentum investing" – buying a stock with a strong uptrend. And next week, my colleagues and friends Joel Litman and Whitney Tilson are hosting an event to detail a huge anomaly happening in the U.S. stock market today.
During the event, they'll show you why this anomaly could be your key to take advantage of the next wave of companies set to soar 100% or more in 2025...
Click here to reserve your spot today.
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Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
September 10, 2025