4 ms·
I doubt anyone would pay 2% management fee and a 20% share on profit to a fund who is just going to keep the money in cash. Might as well do it myself for free.
by yoran 8y ago
I doubt anyone would pay 2% management fee and a 20% share on profit to a fund who is just going to keep the money in cash. Might as well do it myself for free.
- anoncoward111 8y agoI agree with you, but that isn't the point. The point is, "Stick it in the SAP 500" would have been a losing proposition. You would have lost 20% of your money, and lost 10 years of opportunity cost to boot.
- yoran 8y agoI get your point. But my point is that I doubt a hedge fund would have been performing better than the 20% loss of the S&P. Maybe it would have incurred a 40% loss. I think that in the investment world, action bias is very strong and literally doing nothing is not seen as a good thing. We both agree that if you could have foreseen that decade, you would have sold all your stocks in 1998, put it on a savings account, and only have taken it out again in 2008.
- anoncoward111 8y agoI am glad we agree! I also 100% agree that the SAP500 may have performed better than plenty of funds 1998-2008. I'm sure we could even dig some up that did horribly. There were even funds 2008-2018 that liquidated during the Buffett bet :)