Did anyone calculate how would be the perfomance if there was no fee for the hedgefund?
Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds
311–320 of 323 posts
Re: Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds
#312For context the losers argument is that Buffet picked a good team in a good period and he would have a good chance in a second cycle. https://www.bloomberg.com/view/articles/2017-05-03/why-i-los... .
That's a pretty weird story. His "expert" ability at picking funds is what was being tested. He then goes on to give his "expert" opinion on why his expert opinion failed. Yes, it's totally possible that Buffet just got lucky. But of the five stocks, over the 9 year period (45 data points), there are only 9 data points where a fund beat the S&P for the year. They all beat the S&P the first year, then for the next 8 y…
Typo on the 20% chance (that's actually the percentage it lost). The actual probability is about 1/(2^13).
Re: Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds
#313Earlier quoted context omitted.
Good question! Somebody took over running the technical side of that some years back, so I haven't followed it closely. I'll ask. But if anybody has a bet they'd like to get registered, just email me and/or them.
What email should they use?
You can also write to longbets@longnow.org - but we will have the registration open again shortly (within weeks).
Dan @ Long Now
Re: Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds
#314Earlier quoted context omitted.
It's not just some people. It is actually the law in most states (albeit a seldom-enforced one). Don't cruise in the left lane.
I wish this were true of most states in the USA. It’s certainly true in many parts of Europe. I don’t have an especially authoritative source, and the first map I found was made seven years ago, but I don’t think things have changed much: http://jalopnik.com/5501615/left-lane-passing-laws-a-state-b... Only the green states would map to “don’t cruise in the left lane”; the laws in the majority only say you shouldn’t d…
That map is out of date. Oregon is now in the green group.
Re: Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds
#315Earlier quoted context omitted.
It's the law to keep to the right in most states. For instance, Washington state: http://app.leg.wa.gov/rcw/default.aspx?cite=46.61.100
It might be the law, but WA state is the poster child for left-lane bandits. Easily, with no doubt in my mind, the worst of the 50 states for a general contempt and ignorance of left lane (or lane discipline in general) protocol and law. IOW, it is not uncommon to see a line of cars in the left lane doing the speed limit or under, and a total two cars in the other lanes. Oregon is a close second. The state police had…
> The mystery to me is how a geographical demographic of drivers somehow all got together and said, “fuck it, I’ll drive in whatever lane I want!” I know that’s not how it happens, but how does it happen?
I think you have it backwards.
It's not that they're thinking "Fuck it, I'll drive in whatever lane I want!". It's that they were never told the proper thing to do, so they just have no idea that it actually matters.
Some people are actually specifically told the WRONG thing. I had a friend who was taught by his parents that if his exit isn't coming up any time soon that he should be in the left lane.
Re: Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds
#316Earlier quoted context omitted.
What if you want to bet they find a cure for death?
We would totally accept that bet. The closest bet we have right now is bet 11: “At least one human alive in the year 2000 will still be alive in 2150.” http://longbets.org/11/ The tricky part is coming up with a clear agreement about what "cure" and "death" mean here. But there's a lot of good discussion around e.g., the extropians, so I think a solid bet could be created.
Does "Brain in a Jar" count? How about a Ghost in the Shell? More likely this is a bet on if Cyrogenics finally works out.
Re: Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds
#317Earlier quoted context omitted.
> This does not surprise me. It shouldn't. That anyone would take a basket of hedge funds and think it would win vs the market is madness. Active investment is negative sum due to fees - it's essentially implausible for hedge funds on average to generate alpha. There are plenty which do. There are lots which actually simply provide alternative Betas, or smart betas, or whatever. Some of them have genuinely reasonable…
> it's essentially implausible for hedge funds on average to generate alpha. Only if they're playing fair. But, wink wink , you should really wink wink invest in my uncle's fund, he knows a wink good strategy, but if you enjoy plausible deniability you'll just fork over the dough without asking too many questions.
But it turns out that uncle, a former NASDAQ chair, was running a pyramid scheme the entire time...
Re: Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds
#318The problem IMO is that stocks outperform bonds in the first place because of the debt-based economy. I suspect it is part of why Glass-Steagell was repealed in the first place.
Stocks should outperform bonds because they are riskier than bonds. Why would you expect or want it to be otherwise?
But the more stocks outperform bonds, the more things like the repeal of Glass-Steagell are encouraged.
Re: Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds
#319Earlier quoted context omitted.
>>This is because the vast majority of the returns of an index come from a very small number of outperforming stocks. This is the only thing the parent commenter needs to read to understand why indexing is not equivalent to owning 15 stocks that theoretically reduce portfolio risk (my guess is that the stocks are highly correlated and have too high of weight towards IT and not enough towards boring fields like indust…
Actually the opposite. Being in IT, I never buy IT stocks. They're mostly everyday brands and industries.
Why not? I do the opposite -- I only invest in stocks in industries I know something about. It's the only appreciable alpha I have.
Re: Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds
#320Am I reading that right? S&P500 nets you on average a 10% annual return of investment? Does that mean you can "just" invest ten times your yearly living expenses and practically live off idle income? How does that not completely destroy the economy and why isn't everyone doing it?
Because 70% Americans have less than $1,000 in their savings account, let alone taxable brokerage accounts [1]. Living off cap gains is not even on most people's radar. If you're really interested there's a pretty interesting Reddit community based around saving for that goal [2].
1. https://www.cnbc.com/2017/06/13/heres-how-many-americans-hav... 2. https://www.reddit.com/r/financialindependence