Buffett's $1 Million Bet: Index Funds vs. Hedge Funds
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7 жыл бұрынWarren Buffett made a $1 million bet in 2007: that hedge funds would not outperform index funds over the next 10 years. WSJ's Nicole Friedman checks the numbers and handicaps Buffett's chances of winning the bet on Lunch Break with Tanya Rivero. Photo: Bloomberg
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@danbuchner28 6 жыл бұрын
384 people are hedge fund managers. ;-)
@lixirui5645 6 жыл бұрын
Dan Buchner hedge funds are practically scams apparently
@yinghanfu9047 3 ай бұрын
This isn't a comment that people understand now.
@danbuchner28 3 ай бұрын
@yinghanfu9047 I was just joking around. Back then, the people who voted down were probably on the side of hedge funds. I am on the side of simple index funds, and have been for many years.
@daka1272 2 жыл бұрын
We have to mention that 1million $ bet for Warren is like us betting 2$ 😅
@WubbyPunch Жыл бұрын
Unfortunately for the average( median and below) American, we don’t have more than probably $1000 in savings on average. I think it’s much lower than to say that $1 million is investing two dollars comparatively. If we comparatively weighed how much he COULD Have sitting in a bank account with how little the median person does, it would probably more like 2 Pennies
@csuporj Жыл бұрын
@@WubbyPunch How do you buy a house then? Or a car.
@whentheuh 7 ай бұрын
@@csuporj loans and mortgage lol? do u think ppl just make 300k a month and buy a house like that or what
@youreyesarebleeding1368 3 жыл бұрын
NOOOOO! YOU CAN'T JUST PICK RANDOM STOCKS AND LEAVE IT!!!!!!! haha index funds go brrrrrr
@MP-ut6eb 3 жыл бұрын
😂😂😂😂😂😂
@Ikaros23 2 жыл бұрын
it`s not random. It`s the 500 best companys. that is if a company get`s weak it`s taken out of the index. So there is a " selection", and is not as you say " totaly random". The randomness is between the 500 firms, and who " wins or loses" over a given year or decade. Buffet`s point is that the hedge fund managers can`t outperform the " 500 strongest" companys over a 10 year period.
@jacobwhite9006 5 жыл бұрын
Well she says that it’s due to the great performance of SP500 but she misses the point that they started in 2007 before the crash ... if they had started 2008 Index Funds would have done even better
@Rykershot101 3 жыл бұрын
How does she miss that when in the video she mentions specifically that they saw an unusually good return due to the crisis?
@MP-ut6eb 3 жыл бұрын
@@Rykershot101 ikr?
@rogeliomj2644 7 жыл бұрын
Why the dislikes?
@tyler7992 5 жыл бұрын
Rogelio MJ bunch of people pissed they got ripped off by hedge funds.
@wallopwallop9125 4 жыл бұрын
Tyler lololol index funds all the way
@ericdahl2915 2 жыл бұрын
morons
@zainabe9503 4 жыл бұрын
Regarding that remark "Warren Buffet is ironically a stock picker". A speculator is always is a stock picker, but a stock picker isn't always a speculator. Warren sees his huge stocks acquisitions as a long term-investment, and that he's usually part of the board of directors. Take that to your average retail "stock pickers" trders, can they do that?
@cletus2941 3 жыл бұрын
Warren isn't a stock picker (speculator), he only looks at the fundamentals of a business, he's an investor....A stock picker is always a speculator. These reporters are absolute morons.
@jimmyneutron129 2 жыл бұрын
@@cletus2941 Stock picker just means he chooses specifics stocks. He wants to hold them for a long period of time. If you listen to him, you hear that he always wants to invest in businesses and is not for over-diversification. However for the average Joe, he avocates for index funds because he knows everyone is not like him
@-robertri6093 Жыл бұрын
@@jimmyneutron129 that's right
@csuporj Жыл бұрын
@@jimmyneutron129 Why not buy Berkshire stock instead of sp500?
@jimmyneutron129 Жыл бұрын
@@csuporj who cares if he told people to buy his company lol?
@user-ok6ef9zn4f 7 жыл бұрын
YES, BIGLY
@Faraz70 Жыл бұрын
What was the performance of Jim Simon's Medallion fund during this time period?
@DarkoFitCoach 2 ай бұрын
Yes SOME can do it. But very few. Warren is 1 of them and peter lynch was another. But most cant
@naruparu7881 3 жыл бұрын
407 people are hedge fund managers
@chelsea7xhf 3 жыл бұрын
well, there is a reason for SP 500 select 500 companies, why it is not 600 or 200? When a group of very smart person select the SP500 system, they have done statistic study to prove 500 is number to balance between risk and return. People think, with the technology improvement, there is a better chance to build portfolio to to beat SP. But, the reality is no. If you look at long term, 5 or 10 years. Average investor is better stick with index fund, accept the average return & risk and live on with happy life.
@kamlabisht7381 2 жыл бұрын
Can you cite some source, it is an interesting point you have made
@Chris-cx7zk 2 жыл бұрын
@@kamlabisht7381 actually the Russel 1000 is a lot better because it uses mechanical rules rather than a committee in the S&P which is prone to human error.
@csuporj Жыл бұрын
Why not invest in Berkshire?
@csuporj Жыл бұрын
This sp500 has a problem too. For poor people who need to take out their money in economic recessions, it may be a net loss.
@chelsea7xhf Жыл бұрын
@@csuporj sp500 is meant for investing 10-20 years. It is not an emergency account.
@tulsideviakashahidakhan6175 4 жыл бұрын
Same talks are going on in India now a days. Only difference is, here the fees are not that high for active funds too.
@MrSanbonsakura 3 жыл бұрын
0:35
@Lukas-tf3nu 7 жыл бұрын
you never stood a chance in this battle you started. Now watch as wsj slowly starts to die day by day
@JC-hu3yj 5 жыл бұрын
Steven Kraus Hedge fund managers are a bunch of snowflake crybabies 😂
@jonitalia6748 5 жыл бұрын
Lol how about the cat that outperformed pros
@Nik-rx9rj 3 жыл бұрын
Weird, it's almost like Warren Buffet is good at investing or something. You'd almost think he knows what he's talking about. Hmmmmm... weird. /s
@Khadangasantos 5 жыл бұрын
Why so many dislikes:(
@LordandGodofYouTube 4 жыл бұрын
They are people with money in hedge funds :)
@anoopdattana9506 2 жыл бұрын
Legend 👍
@Turbo_GT1 3 жыл бұрын
He himself charged 4-5% during his partnership 😂😂 he knows that
@vava-lw9ds 3 жыл бұрын
No bro he said to his partners that he would take half of the profits and he would cover 25% of losses. And he returned about 35% so the investors walked away with 17.5 (it has outperformed s&p 500)
@briansperry4845 2 жыл бұрын
@@vava-lw9ds no he took 1/4 of the profit after 6 percent return.
@MarkSmithhhh 2 жыл бұрын
What a flex
@honiahakaa 7 жыл бұрын
more dislikes
@billsmith6652 2 жыл бұрын
Buffet whom I generally like, doesn't even follow his own advice. He owns one collective stock Berkshire Hathaway. He has beaten the market many times/years, if he really believed in what he says he would say/act in a manner accordingly. Basically, he would buy the S&P not Berkshire Hathaway. The fees on the other hand he is correct, the size of these hedge funds keep administrators from moving in/out of any fund quickly in order not to damage a stock's price. That makes beating the market impossible. However the fee you pay is so you don't have to actively watch your stock.
@m74d3 11 ай бұрын
He's directed that 90% of his assets will go into an S&P500 index fund for his wife's trust upon his death.
@DarkoFitCoach 2 ай бұрын
Warren knows he is one of the few to be able to beat the market
@chiefrocka8604 5 ай бұрын
Not one white kid in the charity adverts That’s diss custin
@kishores7034 Жыл бұрын
Obviously these analysts are sore losers
@GetRich101 2 жыл бұрын
Haha wow
@ThePilot3332 7 жыл бұрын
PewDiePie did nothing wrong
@drkInxgud 6 жыл бұрын
except if you get ur money into medallion fund ....
@zainabe9503 4 жыл бұрын
@Azerty Qwerty Sometimes Jim Simons wins, sometimes he loses. Maybe... the question is, when will his strategy's alpha turn into decay. I don't doubt he makes a lot of money with his systematic trading, but time and again hedge funds have been proven to suffer the "reversion to the mean".
@DarkoFitCoach 2 ай бұрын
Whats the 5-10 and 15yr return in that fund?
@itsmesaltax 4 жыл бұрын
I don't understand - I could name 10 mutual funds that have outperformed the S&P? One being Lindsell Train Global Equity. another being fidelity global technology, this one has doubled the return of S&P 500 over last 5 years. Am I missing something?
@jamesonmoy1731 4 жыл бұрын
Just because they outperformed the S&P 500 at one time, doesn't mean they always will. The VAST MAJORITY of actively managed funds will under perform the passively active index funds. Also, even if these so called mutual funds outperformed the S&P, the greater fees will eventually take a financial toll on the investors. S&P 500 index funds have fees that are like .03%-.05%.
@rayallen953 4 жыл бұрын
It’s called survival bias, the mutual funds that you’re seeing now are the funds that survived, many mutual funds 10 years ago have closed since they underperformed the market and investors pulled out their cash
@whisper1776 4 жыл бұрын
The previous replies say it all, props to Jameson Moy and Ray Allen for saving me time. Also Ya Boy Saltax the thing you're missing is that he bet against HEDGE FUND, but as said before passively managed investments will outperform actively managed funds and for the most part investments in general. I highly suggest you read "A Random Walk Down Wall Street." by Burton G. Malkiel
@shun2240 2 жыл бұрын
good luck picking those mutual funds out of thousands of mutual funds, its too big of a risk
@Ikaros23 2 жыл бұрын
@@rayallen953 Bingo!
@uttaranghosal5129 2 жыл бұрын
WB is best 🤗🤗🤗🤗🤗🇺🇸🇺🇸🇺🇸🇺🇸🇺🇸🇮🇳🇮🇳🇮🇳🇮🇳
@kiethmergard 2 жыл бұрын
I find myself wishing I could make this bet with him, except I would manage my own porfolio and he'd choose an index fund
@moderatesunited Жыл бұрын
You'd still lose.
@DarkoFitCoach 2 ай бұрын
U think u can outperform hedgefund managers who even they underperform the market? 😂
@Jacob-hv5tl 7 жыл бұрын
worst media outlet in history. no arguement
@DominiqueS 7 жыл бұрын
Jax The Rack yeah really boring
@Jacob-hv5tl 7 жыл бұрын
my comment or WSJ
@bighands69 6 жыл бұрын
Let me guess because the WSJ is not pro liberal Democrat you are not a fan of them.
@wallstreetbeef2489 4 жыл бұрын
$dia $spy
@pranjayarora8115 4 жыл бұрын
jim simons generated average cagr of 69%(39% after deducting expense ratio (2)buffet loses this bet(3)always question never believe even in richest
@Dimabuildingadventures 4 жыл бұрын
You have to count the fees so warren still wins, the fees on vanguard 500 is something like .03%. Are you that slow that you would rather get 66% or 39% as an investor!
@pranjayarora8115 2 жыл бұрын
39% RETURN RTO INVESTORS HIGHER THAN EVERY INDEX FUND MUTUAL FUND FIDELITY BLACKROCK VANGUARD & ALL SUCCESSFUL🏆💪HEDGE FUND -EVEN BERKSHIRE HATHAWAY -1988-2018(MEDALLLION HEDGE FUND RESERVED🙂😊😬 FOR MEDALLLION EMPLOYEES MINIMUM INVESTMENT 1 MILLION USD MEDALLLION) 25K USD POINT -72 MANAGEMENT(2) JIM SIMONS INDIVIDUAL👤 NETWORTH HIGHER THAN COMBINED NETWORTH OF FIDELITY BLACKROCK VANGUARD JPMORGAN GOLDMAN SACHS CHEAP MUTUAL FUND SELLER FOUNDER CEO -CONFIRM ANYWHERE
@pranjayarora8115 2 жыл бұрын
@@Dimabuildingadventures I SAID JIM SIMONS WIN AGAINST DEAREST WARREN BUFFETT MSC ECONOMIST ATHEIST💪 NOT FIDELITY BLACKROCK VANGUARD JPMORGAN GOLDMAN SACHS INDEX FUNDS -RENAISSANCE TECHNOLOGY MEDALLION HEDGE FUND RETURN HIGHER THAN EVERYONE IN INDUSTRY -(2) JIM SIMONS INDIVIDUAL👤 NETWORTH HIGHER THAN FIDELITY BLACKROCK VANGUARD JPMORGAN GOLDMAN SACHS - POINT -72 HEDGE FUND ALSO OUTPERFORMED BERKSHIRE HATHAWAY INDEX FUND -BUY HEDGE FUND UNIT FOR RETIREMENT LONG TERM AD WILL NEVER COME ON KZfaq LIKE MF /BITCOIN
@DarkoFitCoach 2 ай бұрын
So sp500 got 65 and investor got 39 and u rather have the investor return? 😂😂😂
@phisicoloco 7 жыл бұрын
#hypofritz #IStandWithPewDiePie #FuckFakeNews
@theklrdudeoo9173 6 жыл бұрын
waren buffet is very generous to charities ,....which are run by his children and who pay no tax . whereas he has a tax deduction for being generous ! hehehe!
@adammesheia 5 жыл бұрын
theklrdude oo Yeah taking half of your money sounds very fair
@tyler7992 5 жыл бұрын
So? He’s paying the same amount of money. Wouldn’t you rather give money to a charity the the government
@whisper1776 4 жыл бұрын
He gets a deduction but I guarantee that is not any bit of his motive. You don't get what you pay in tax breaks.
@LironBerisha 4 жыл бұрын
@@whisper1776 so many people believe that tax deduction = reimbursement of 100%
@zirax2545 7 жыл бұрын
going back to RT this is 100% trash news
@bighands69 6 жыл бұрын
And how is RT better? What they talked about was simple and easy to understand.
@chrismccord1841 6 жыл бұрын
RT is Russia Television right? That's better than WSJ?
@maxlatour7912 5 жыл бұрын
Well if Hedge Funds had a 'printing press' like the SP500, they would out perform too !
@hawjtsim 5 жыл бұрын
Warren can make the bet because he and his friends can manipulate both markets, it's just a game
@JC-hu3yj 5 жыл бұрын
Billy Hedge fund managers like you are a bunch of snowflake crybabies 😂
@LordandGodofYouTube 4 жыл бұрын
Yeah right, risking his investors' money to win a tiny bet to promote something he won't make any money out of as his money is in Berkshire, what hedge fund do you work for?.
@MarkSmithhhh 2 жыл бұрын
I really doubt buffet is gonna risk losing his investors money and having a fraud charge slapped on him for a meaningless 1 million dollars...he makes that in like an hour
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