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What's neglected about this is arguably the most successful active asset manager bet against active asset management.
by dehrmann 4y ago
What's neglected about this is arguably the most successful active asset manager bet against active asset management.
- roncesvalles 4y agoWell he hasn't exactly bet against active management since all his wealth is actively managed. A more accurate interpretation would be "what I'm doing is incredibly difficult and I bet most who try will fail."
- dehrmann 4y agoNot just that, but that most of the really smart people who do it professionally will fail.
- snowwrestler 4y agoIf you read the original bet and discussion carefully, what Buffett really bet against was the fees. It’s a very important detail in the original bet that the returns would be compared net of fees. His argument was not that active management was doomed to fail, but rather that active management is usually not worth what you pay hedge fund managers to do it.
- danielmarkbruce 4y agoExactly. He was basically saying that over time for practically all managers: (80% * managers return) - 2% < market return. Not: managers return < market It's quite different.