Buying in the dips might give you a median positive return (95% of the time you'll come out ahead) - but your expected return can easily still be negative due to what happens the other 5% of the time.
If you're following a very simple strategy based on past returns that seems to make money all the time, you should wonder what the rest of the market is afraid of that you can't see.
If you bought in at 200 after the market had plummeted from 380 down to 200, you'd probably be thinking your strategy is working pretty well - especially once it rallied back to 290 or so. But after that point you'd be waitinga LONG TIME to get your money back. It wasn't until 20 years later - the 1950's!! - that the DJIA finally sustained a level above 240 (and not before falling to 40 - good luck staying solvent through that!!).
And this is only because the US economy did eventually recover (thanks to World War II). Argentina's stock market never did recover. There's no such thing as "time diversification". In the long run, the variance of your annualized return increases: http://www.norstad.org/finance/risk-and-time.html
This is why the DJIA fell to 6500 in Oct 2009. If you bought then, you are probably feeling pretty smug now - but it's simply that the rest of the market was afraid of Great Depression II and you may not have even realised that it was a possibility.
To say that you can obtain a positive expected return by following any strategy that is solely based on what the price has done recently is just as "naive" as a retail investor who thinks they can beat HFT algorithms.
As the SEC says: "Past returns are never an indicator of future performance"
1: I've been long TSLA since the IPO - I simply bought more stock with cash on hand. I'm not just median riding - although that is a relatively effective strategy for high earning companies/growth.
2: Risk is risk - TANSTAAFL. Great Depression risk is there just as there is nuclear war risk. I take it because I can. I try and make sure I pay the right rates though.
3: DJIA is not the entire market - it's a highly constrained subset.
4: Following past strategies does have positive value - it's what investing (and everything thing you know) is all about.
You live and die by induction.
Thinking that you are high on your black swan horse by stating otherwise is pointless.
Decisions need to be made and money needs to be correctly invested under uncertainty. Taleb guys bore me.
