Warren Buffett

An S&P 500 index fund will outperform a portfolio of funds of hedge funds, net of fees, over 2008-2017.

“Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S&P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs and expenses.”

Said on

19 December 2007 · Long Bets bet #362 against Protégé Partners (Ted Seides), made December 19, 2007

Source

Over a ten-year period commencing on January 1, 2008 ... the S&P 500 will outperform a portfolio of funds of hedge funds · Long Bets

Should come true

31 Dec 2017

How sure they sounded

will

Categories

Markets

Importance

3 of 5 · Famous public test of passive indexing versus active hedge-fund management

Outcome

Accurate Happened 31 December 2017.

Buffett's 2017 letter reports the S&P 500 index fund gained 125.8% (8.5% a year) over 2008-2017, versus 2.8% to 87.7% for the five funds-of-funds (0.3% to 6.5% a year). Protégé conceded and the winnings went to Girls Inc. of Omaha.

Evidence:

• https://www.berkshirehathaway.com/letters/2017ltr.pdf
• https://longbets.org/362/