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> 1. Buffett bet against aggregate performance of hedge funds as an investment vehicle. If he restricted his focus to the highest performing funds of the past 1
by Judgmentality 6y ago
> 1. Buffett bet against aggregate performance of hedge funds as an investment vehicle. If he restricted his focus to the highest performing funds of the past 10 - 30 years, he would have lost handily.
I don't think this is a caveat. I think this is the point. You don't compare yourself to the literally one guy who won the lottery, you compare yourself to everybody that bought a lottery ticket.
> I say this because there is a tendency for people outside the industry to come away thinking hedge funds are a scam. Which...well, many are, to put it bluntly.
I don't think anybody is assuming every hedge fund on Earth is a scam from this any more than they think lottery tickets are a scam. As you mentioned yourself:
> Taken together, this means that Buffett's bet is a statement about the aggregate performance of the industry.
I apologize if I'm being presumptuous, but is this not so obvious that it can be assumed?
- fractionalhare 6y agoI was probably a little unclear. Basically I'm saying all you can take away from this is a statement about aggregate performance. You're not doing this in your comment, but I frequently see people on HN extrapolate this bet to support the idea that there's no such thing as a hedge fund which beats the market, or which is a worthwhile investment, etc. You can't derive a conclusion about individual hedge funds from this. That might seem obvious to you, but maybe you'd be surprised then :)
- Judgmentality 6y ago> That might seem obvious to you, but maybe you'd be surprised then :) Fair. I've been surprised by the ignorance of people before, including myself!
- deleted 6y ago[deleted]