Buffett’s Bet

Warren Buffett is betting a hedge fund that an investment in its family of hedge funds will underperform Buffett’s unmanaged investment in the S&P 500 over the next ten years. Both sides are putting up $320,000. The combined sum will go into zero-coupon Treasuries that will mature at $1 million ten years from now.
I’m not so sure that’s a wise bet on Buffett’s part. If it were a large basket of hedge fund, then yes, I’d be all for it. But just one family, eh, I don’t know.
Buffett’s major point is that hedge fund fees are insanely high. He’s right, of course, but there are plenty of folks willing to pay that sort of fee.
Now, if there were only some place people could find market-beating advice (for two straight years) that’s completely free and has minimal turnover.
Hmmm.

Posted by Eddy Elfenbein on June 9th, 2008 at 12:47 pm

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