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Warren Buffett's bet on hedge funds vs. S&P 500
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Date: June 11th, 2018 1:24 AM Author: Nighttime toaster Ten years ago Warren Buffett made a bet against a hedge fund manager, that an S&P 500 index fund would beat a group of hedge funds over a ten year period. The S&P won by a wide margin. The proceeds of the bet, something like $2.2M, went to a local charity in Omaha. There have been some news articles on the bet, but they mainly focused on the charitable aspect of it, and studiously ignored the elephant in the room, the question of what purpose hedge funds serve if they can't beat the S&P 500? https://dealbreaker.com/2018/05/hedge-funds-didnt-lose-that-bet-to-warren-buffett-because-passive-indices-will-always-beat-active-managers-over-the-long-term-but-because-they-just-picked-the-wrong-decade-to-bet-on/ |
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Date: June 11th, 2018 2:09 AM Author: Overrated Indian Lodge Community Account Indeed, ten years ago Warren Buffett made a bet against a hedge fund manager, that an S&P 500 index fund would beat a group of hedge funds over a ten year period. The S&P won by a wide margin. The proceeds of the bet, something like $2.2M, went to a local charity in Omaha. There have been some news articles on the bet, but they mainly focused on the charitable aspect of it, and studiously ignored the elephant in the room, the question of what purpose hedge funds serve if they can't beat the S&P 500?
https://dealbreaker.com/2018/05/hedge-funds-didnt-lose-that-bet-to-warren-buffett-because-passive-indices-will-always-beat-active-managers-over-the-long-term-but-because-they-just-picked-the-wrong-decade-to-bet-on/ |
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Date: June 11th, 2018 2:10 AM Author: indecent scarlet parlor Lmao (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221826) |
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Date: June 11th, 2018 5:32 AM Author: fuchsia self-absorbed theatre (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221920) |
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Date: June 11th, 2018 5:34 AM Author: cheese-eating ticket booth Pwn (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221923) |
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Date: June 11th, 2018 10:15 AM Author: Marvelous bespoke stain garrison (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222409) |
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Date: June 11th, 2018 10:27 AM Author: Emerald cruise ship lol (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222480) |
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Date: June 11th, 2018 3:22 PM Author: Seedy maniacal hell (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224595) |
Date: June 11th, 2018 1:45 AM Author: Nighttime toaster I'd be curious though, if there are any hedge funds that have consistently beat the S&P. Otherwise they look rather foolish. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221708) |
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Date: June 11th, 2018 1:58 AM Author: Lemon orchestra pit hunting ground Madoff dominated the SP500 (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221780) |
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Date: June 11th, 2018 2:05 AM Author: indecent scarlet parlor (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221796) |
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Date: June 11th, 2018 10:15 AM Author: Marvelous bespoke stain garrison (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222411) |
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Date: June 11th, 2018 2:08 AM Author: Overrated Indian Lodge Community Account Yep, I’d be curious though, if there are any hedge funds that have consistently beat the S&P. Otherwise they look rather foolish. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221813) |
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Date: June 11th, 2018 10:19 AM Author: Confused fear-inspiring cuckoldry No doubt there are, somewhere, just like there are a few mutual funds that beat the market. But you'll never identify them until afterwards so what's the point? (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222436) |
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Date: June 11th, 2018 2:29 PM Author: jade crackhouse Is this a joke question? (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224259) |
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Date: June 11th, 2018 2:33 PM Author: Sinister gaping trump supporter Medallion has returned like 30-40% annually for three decades (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224279) |
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Date: June 11th, 2018 2:38 PM Author: Soggy dead affirmative action hospital Cr and charged like 5 & 40% or something crazy like that and investors still knifed each other in the street to BEG to suck Jim Simons' wrinkled old mathcock. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224313) |
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Date: June 11th, 2018 1:58 AM Author: Lemon orchestra pit hunting ground That's probably the most poorly constructed headline I've ever seen. Pretty shit article too (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221776) |
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Date: June 11th, 2018 2:00 AM Author: arousing orchid giraffe striped hyena lol @ u, waste of space hedge fund fraud (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221783) |
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Date: June 11th, 2018 2:01 AM Author: Lemon orchestra pit hunting ground what (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221786) |
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Date: June 11th, 2018 2:05 AM Author: indecent scarlet parlor (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221798) |
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Date: June 11th, 2018 2:07 AM Author: Nighttime toaster I read his authorized biography, "The Snowball," but there wasn't anything useful in it. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221808) |
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Date: June 11th, 2018 2:54 AM Author: nofapping sneaky criminal water buffalo Same (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221861) |
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Date: June 11th, 2018 2:10 AM Author: Nighttime toaster How do hedge fund managers justify their jobs if they don't beat the S&P? (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221824) |
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Date: June 11th, 2018 2:12 AM Author: arousing orchid giraffe striped hyena same with stock brokers (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221829) |
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Date: June 11th, 2018 2:20 AM Author: Sinister gaping trump supporter They could still have value in a portfolio by providing diversification. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221839) |
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Date: June 11th, 2018 2:20 AM Author: arousing orchid giraffe striped hyena oh the value! LOL, really? |
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Date: June 11th, 2018 2:27 AM Author: Sinister gaping trump supporter Most people don't advise holding all stocks in a portfolio. It's the same idea. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221847) |
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Date: June 11th, 2018 10:00 AM Author: Passionate location love of her life cr isn't that the definition of "hedge" fund
That's the theory at lease, in practice I'm sure they're all shysters |
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Date: June 11th, 2018 10:51 AM Author: gay geriatric kitty prole Lol at hedge funds stealing a page from the higher-ed scam playbook. DIVERSITY IS ARE STRENGTH, don’t you dare question it.
Seriously though I’m all for being evaluated on the basis of soft, unfalsifiable claims even in the face of Flagrantly, Singularly Relevent Quantitative Metrics of Performance, so godspeed fellas. |
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Date: June 11th, 2018 10:52 AM Author: cream aphrodisiac patrolman area wut? (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222617) |
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Date: June 11th, 2018 3:08 AM Author: vigorous bronze toilet seat Presumably there are circumstances they'll significantly out perform; you're not using a hedge fund to just "beat the market". If you're an investor in a long-vol fund, you might be happy just being par for a few years if eventually the market conditions (major crash) hit and you get insane returns. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221865) |
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Date: June 11th, 2018 10:03 AM Author: cream aphrodisiac patrolman area I think the point is that you'd likely get the same or better "insane returns" by just putting your money into an ETF (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222343) |
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Date: June 11th, 2018 2:36 PM Author: Hairraiser splenetic whorehouse no, that's missing the point, entirely assuming the etf consists of multiple companies, then its primary purpose is to minimize variability and minimize expenses, at least compared to the hedge fund approach |
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Date: June 11th, 2018 10:32 AM Author: Electric fluffy filthpig state ummm
so tell me how many of them outperformed the market when the crash of '08 happened |
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Date: June 11th, 2018 10:54 AM Author: Heady step-uncle's house milk The average hedge fund lost 18 percent of its value in 2008, the industry's worst performance on record and down from an average gain of 9.96 percent in 2007, according to Hedge Fund Research. The only other negative year on record was in 2002. But even then, funds only lost an average of 1.45 percent.
Still, compared with the wider market, hedge funds don't look so bad. The Dow Jones industrial average lost 34 percent in 2008, while the Standard & Poor's 500 index fell 38 percent. |
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Date: June 11th, 2018 10:57 AM Author: Gold Submissive Fortuitous Meteor Point (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222646) |
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Date: June 11th, 2018 11:43 AM Author: Nighttime toaster So only invest in hedge funds during a bear market? Is that what you're saying? (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36222964) |
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Date: June 11th, 2018 2:24 PM Author: jade crackhouse I'm not sure how a hedge fund manager has trouble beating the S&P 500. It's honestly not that difficult unless you're selecting stocks from a list with your eyes closed and do zero research. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224235) |
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Date: June 11th, 2018 2:36 PM Author: Hairraiser splenetic whorehouse idiot (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224296) |
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Date: June 11th, 2018 11:49 PM Author: nudist bright yarmulke locus Guy who hasn't heard of Dunning-Krueger (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36228290) |
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Date: June 11th, 2018 2:21 AM Author: arousing orchid giraffe striped hyena Chelsea Clinton's kike husband was so bad at Hedge Funding he got fired a couple years ago, despite his connections (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36221842) |
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Date: June 11th, 2018 2:41 PM Author: Pink provocative goal in life house Good thing he's got his wife's large salaries from jobs she too is unqualified for to fall back on (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224326) |
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Date: June 11th, 2018 10:31 AM Author: Electric fluffy filthpig state the hedge fund industry is a fraud
news at 11 |
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Date: June 11th, 2018 2:13 PM Author: lascivious misanthropic gay wizard sound barrier (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224158) |
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Date: June 11th, 2018 2:09 PM Author: Nighttime toaster I suspect the media are selective in their coverage of Buffett because he's sometimes irreverent and somewhat disparaging of "the system" or "the game," as it is currently constituted. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224125) |
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Date: June 11th, 2018 2:10 PM Author: Nighttime toaster People don't always appreciate candor, in other words. Have to keep up the illusion. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224142) |
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Date: June 11th, 2018 2:17 PM Author: lascivious misanthropic gay wizard sound barrier Hedge funds are lottery tickets for rich people (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224199) |
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Date: June 11th, 2018 7:57 PM Author: Hairraiser splenetic whorehouse (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36226413) |
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Date: June 11th, 2018 2:21 PM Author: jade crackhouse Top hedge funds often net like 25%+ a year return (consistently) so if he beat a group of hedge funds using an index fund, they obviously weren't top hedge funds. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224223) |
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Date: June 11th, 2018 2:34 PM Author: Sinister gaping trump supporter What funds consistently do this other than medallion (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224283) |
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Date: June 11th, 2018 2:44 PM Author: Soggy dead affirmative action hospital I think Soros did for decades (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224337) |
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Date: June 11th, 2018 2:37 PM Author: Hairraiser splenetic whorehouse idiot x2 (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224308) |
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Date: June 11th, 2018 3:13 PM Author: jade crackhouse Not at all. There are a number of funds who produce those returns on a consistent basis.
Do some research. |
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Date: June 11th, 2018 3:21 PM Author: Bateful alcoholic ratface party of the first part Lol. Okay. So why didn’t the dude who made the bet just pick those? (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224588) |
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Date: June 11th, 2018 3:24 PM Author: Hairraiser splenetic whorehouse oh, i'm sure he picked the equivalent of those at the time the bet was made (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224606) |
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Date: June 11th, 2018 6:55 PM Author: slimy foreskin *buys RenTech Medallion Fund ETF* (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36226029) |
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Date: June 11th, 2018 3:22 PM Author: Hairraiser splenetic whorehouse yeah, no they get considered 'top hedge funds' in retrospect since you are the expert, name some of these funds that consistently beat the market while you're at it, posit a reason why they are able to beat the market consistently there are only three reasons that come to mind that can explain it 1 luck 2 insider knowledge 3 riskier than the market |
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Date: June 11th, 2018 3:24 PM Author: jade crackhouse (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224612) |
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Date: June 11th, 2018 3:44 PM Author: Hairraiser splenetic whorehouse speaking of luck, within the last month or so, a hedge fund made a mega killing by betting on a 1 in a (very large number) phenomena. i thing it was based in missouri? my google skills are letting me down. a perfect example of 1 and 3 and big brass balls. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224749) |
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Date: June 11th, 2018 7:56 PM Author: Hairraiser splenetic whorehouse found it "Not everyone got crushed when the market collapsed.
For traders at a little-known Denver hedge fund who saw it coming, it was the score of a lifetime -- a $17.5 million payday on a $200,000 bet.
“People were laughing at us, saying this could never happen, this should never happen,” Justin Borus, the 41-year-old founder and manager at Denver-based Ibex Investors, said in an interview. “We saw people pricing this as a 1-in-5,000 event, but it was more like a one-in-five-year event.”
Borus’s team bet that an exchange-traded fund linked to a calm stock market would go to zero in the event of suddenly volatile trading. The ETF almost did -- it lost 96 percent of its value."
Justin BorusSource: Ibex Investors Borus said they always believed in the wager, even when just about no one else did. But the jackpot still caught them by surprise. Two of the group -- Ari Rubin and Cooper Stainbrook -- were taking a long walk around the Colorado capital when the market started to go haywire on Feb. 5." |
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Date: June 11th, 2018 3:25 PM Author: lascivious misanthropic gay wizard sound barrier If I remember correctly, Buffet let these high-finance clowns choose the "best" funds so it wasn't like they didn't have every opportunity to select the "real" hedge funds that would consistently beat the indexes. I'd like to see long-term charts of the three funds you just listed. I know a couple of the Medallion funds have been amazing performers. The number of funds that have consistently beaten the indexes over a long period (15-20+ years) has got be be tiny. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36224616) |
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Date: June 11th, 2018 6:11 PM Author: Bateful alcoholic ratface party of the first part minuscule if you exclude fees. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36225829) |
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Date: June 11th, 2018 6:52 PM Author: Electric fluffy filthpig state Subject: it kind of enrages me that so many ppl got filthy rich off this racket
but the gig is about to be up
i become more convinced by the day that the key to becoming obscenely wealthy is to aggressively practice borderline fraudulent behavior |
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Date: June 11th, 2018 7:58 PM Author: Internet-worthy Irradiated Persian Digit Ratio (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36226432) |
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Date: June 11th, 2018 8:10 PM Author: Nighttime toaster Is the Warren Buffett/value method still applicable? Usually by the time *you* learn about it you've missed the boat already. You have to be in the right place at the right time, and prepared to take advantage of the situation. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36226520) |
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Date: June 11th, 2018 11:31 PM Author: Nighttime toaster "Buffett has had harsh words for Wall Street before. In last year’s letter, he called investment bankers and others who advise on corporate deals short-sighted and opportunistic, arguing that Wall Street bankers often push for deals that are not in the best interests of companies just to make a fee." http://fortune.com/2016/02/27/warren-buffett-wall-street-earnings/ |
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Date: June 11th, 2018 11:35 PM Author: Nighttime toaster “When CEOs or investment bankers tout pre-depreciation figures such as EBITDA as a valuation guide, watch their noses lengthen while they speak,” writes Buffett. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36228215) |
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Date: June 11th, 2018 11:52 PM Author: stirring office (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36228303) |
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Date: June 11th, 2018 11:37 PM Author: Nighttime toaster The best part about Berkshire Hathaway (BRK.A) (BRK.B) CEO Warren Buffett's annual investor letters is that they always provide some kind of reality check.
This year, in one sentence, he takes on one of the biggest diversion tactics of all -- one promulgated by many companies as the way they should be viewed and then gullibly accepted by investors: EBITDA or earnings before interest, taxes, depreciation and amortization.
"When Wall Streeters tout EBITDA as a valuation guide, button your wallet," he wrote. https://www.thestreet.com/story/12463644/1/greenberg-buffett-tells-investors-to-get-real-about-ebitda.html |
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Date: June 11th, 2018 11:43 PM Author: Nighttime toaster “People who use EBITDA are either trying to con you or they’re conning themselves." -Warren B. “I think that, every time you see the word EBITDA, you should substitute the word ‘bullsh*t’ earnings.” -Charlie Munger https://www.forbes.com/sites/brentbeshore/2014/11/13/ebitda-is-bs-earnings/ |
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Date: June 17th, 2018 12:33 AM Author: Nighttime toaster There are apparently some hedge funds that consistently beat the S&P, but they're closed. No new investors. Those managers must be genuinely brilliant or have some special insight. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36258703) |
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Date: June 17th, 2018 12:43 AM Author: Nighttime toaster Munger has also noted, "The investing world is just a morass of wrong incentives, crazy reporting and, I'd say, a fair amount of delusion." https://www.fool.com/retirement/2018/01/08/warren-buffett-just-won-a-10-year-million-dollar-b.aspx |
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Date: June 17th, 2018 5:50 PM Author: Nighttime toaster I guess some people don't want to acknowledge that not everyone is going to be above average. (http://www.autoadmit.com/thread.php?thread_id=3998907&forum_id=2#36261763) |