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Well, no. From Warren himself: "I made the bet... (2) to publicize my conviction that my pick – a virtually cost-free investment in an unmanaged S&P 500 index f
by CapriciousCptl 6y ago
Well, no. From Warren himself: "I made the bet... (2) to
publicize my conviction that my pick – a virtually cost-free investment in an unmanaged S&P 500 index fund – would,
over time, deliver better results than those achieved by most investment professionals, however well-regarded and
incentivized those “helpers” may be."
[1] https://www.berkshirehathaway.com/letters/2017ltr.pdf https://www.berkshirehathaway.com/letters/2017ltr.pdf.
And, regarding being skeptical of things like "hedging risks" and "complex portfolios," I don't know. I'm just not sure enough hedge funds really do a great job handling tail risks to not be skeptical of all of them as a group. And, surely sophisticated investors can target specific sectors and build arbitrarily complex portfolios (if they're into that sort of thing) with passive things like ETFs for much lower fees on their own.
- bidirectional 6y agoThat's clearly not a bet against hedge funds, but 'investment professionals', which in this case are these people offering pooled funds to the retail market. I agree with it and I'm sure many people in the hedge fund industry would agree with it. I'm not talking about all hedge funds managing tail risk for their own portfolios, but funds which are designed to do nothing but hedge against tail risk. They provide a valuable service, and a small allocation to such a fund in concert with a large holding in the S&P500 will often outperform the S&P500, even if the fund itself loses money.
- asdfasgasdgasdg 6y ago> That's clearly not a bet against hedge funds, This isn't clear to me. To me it seems rather that this is a bet against hedge funds. I can see a way to your interpretation but it does not seem as likely to me.