Can Hedge funds really beat the market over a long term?
July 15, 2008
By: 
Arohan
Category: Buffett, Hedge Funds
I came across an article detailing an interesting bet between Warren Buffett and Protege Partners LLC, a fund of funds. As even a casual followers of Buffett would recall, WEB has many times taken hedge funds to task for their onerous fees and has proclaimed that investors would be better off owning the S&P Index over the long term. WEB was willing to bet $1 million but no one prior to this had taken him up on the bet.
Well, now the bet is official. Read all about it here
I would assume Mr Buffett will provide updates on how this bet is performing at his annual meetings
Would love to know what you think how this will turn out. Let’s keep this discussion going. You may want to subscribe to the feed or bookmark this page for further updates.
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July 31st, 2008 at 2:35 am
Seems like a no-lose proposition for the hedge fund. The publicity and “confidence” they exude in their ability to beat the S&P 500 will garner more money in the way of client fees than it’s costing them. This is a $240K “superbowl” ad they purchased at a discount with a positive IRR.
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July 31st, 2008 at 8:11 am
Agreed that it is tremendous publicity for the fund in question. Let’s see how it pans out
September 26th, 2008 at 4:27 am
I think that hedge fund have an advantage on mutual funds because they can go long and short, trade options and other instruments. They can also go to cash when needed and mutual funds by virtue of their prospectuses need to be largely invested at all times.
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