The celebrated investor wagers a tidy sum that even carefully chosen hedge funds won't return more than the market over time.

Buffet gives the edge to the S&P fund due to all the fees and costs of the hedge funds.

It's a no-lose game for the hedge fund management company. They get lots of publicity whether they win or not. If they lose, they can just offer another type of fund that they can claim has new and improved methodologies.


 

Submitted: Jun 10, 2008    Views: 150    Comments: 2    Likes: 1   


View Article: http://money.cnn.com/2008/06/04/news/newsmakers/buffett_bet.fortune


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Comments Received:

I Am Donald Trump
I_Am_Donald_Trump

At Wharton, we learned that over time you can't beat index funds. But Warren should know that short term the market can be beat.

My take: Warren will lose.

I'd also like to extend an invitation for Warren to participate in the next Apprentice series. I'd love to see you go up against Amarosa.

Posted: Jun 11, 2008

Sol Nasisi
Sol_Nasisi

I have a hard time believing that %500,000 is even material for the richest man in the world and his attorney's. How could it possibly be a real complication?

"Seides, stepping way beyond his usual stakes - say, the cost of a meal - suggested that he and Buffett make the bet for $100,000 (which, he noted, was Buffett's annual salary). Buffett, not knowing then that Long Bets even existed, said that considering his age - he's now 77 - and the complications that a 10-year bet might add to his estate's being settled, he'd only be interested in wagering at least $500,000. Even then, he wrote Seides, "my estate attorney is going to think I'm out of my mind for complicating things."

Posted: Jun 11, 2008



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