Warren Buffett bet $1mm that S&P500 will outperform a hedge fund over a 10 year period.[1]
That's good enough for me, I'll follow the oracle.
That's good enough for me, I'll follow the oracle.
edit: I guess it depends on the detailed terms that they haven't disclosed, but educated guesses are fine
http://fortune.com/2016/05/11/warren-buffett-hedge-fund-bet/
Almost impossible for Warren to lose at this point.
Markets (the major players that skew the averages) are downstream of banks who use money the Fed's pay the interest on.
His gamble is that the elite would rather give the market unlimited welfare a la Japan to keep the signals of valid global demand alive.
The Fed will not allow a correction... mostly for political reasons.
If you picked a different 10 years (say, 199X-200X or 200X-201X), I suspect that Buffet wins for most values of X, but I have not checked.
He's actually betting against a portfolio of hedge funds going as far as to include fund of funds (typically a terrible bet). I assume he is only using US Equity hedge funds too?
I'd be interested to see the distribution of individual funds in his portfolio that beat the S&P vs those that didn't. In general though these numbers have huge survivor bias since numbers are self reporting and ignore dead funds.
It is also worth noting that the index went from 1400 to 900 over the course of 2008. So when he started the bet is clearly going to be relevant. You could of course repeat the experiment using every possible start date from, say, 2000 - though your portfolio of hedge funds will be hard to construct.
He is clearly winning, but it seems like an odd question to ask.
http://www.npr.org/sections/money/2016/03/04/469247400/episo...