Index Fund Beats Hedge Funds

September 18, 2017

Warren Buffett apparently made a bet 10 years ago that a basic S&P index fund with low fees would outperform hedge funds on aggregate. He put his money where his mouth was, offering a $500,000 bet to any hedge fund manager. The manager would have to pick 5 hedge funds and they would compare how the 5 performed against the Vanguard S&P 500 index fund.

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I publicly offered to wager $500,000 that no investment pro could select a set of at least five hedge funds – wildly-popular and high-fee investing vehicles – that would over an extended period match the performance of an unmanaged S&P-500 index fund charging only token fees. I suggested a ten-year bet and named a low-cost Vanguard S&P fund as my contender. I then sat back and waited expectantly for a parade of fund managers – who could include their own fund as one of the five – to come forth and defend their occupation. After all, these managers urged others to bet billions on their abilities. Why should they fear putting a little of their own money on the line?

What followed was the sound of silence. Though there are thousands of professional investment managers who have amassed staggering fortunes by touting their stock-selecting prowess, only one man – Ted Seides – stepped up to my challenge. Ted was a co-manager of Protégé Partners, an asset manager that had raised money from limited partners to form a fund-of-funds – in other words, a fund that invests in multiple hedge funds.

Like Warren Buffett needs more money, but he won the bet. None of the five hedge funds individually outperformed the S&P 500 and on average the hedge funds returned 7.1% compared to the S&P 85%. Not even close.

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Friends With Houses on Lakes

July 7, 2017

I highly recommend them. Here’s where we spent the 4th of July weekend…

Candlewood Lake


Bike Share Around The World

June 11, 2017

Not sure why, but I find this fascinating. Real time map of bike share activity around the world.

https://citybik.es/


AlphaGo Go

May 25, 2017

Google’s AlphaGo software just beat the world #1 Go player. And it’s getting better:

“Last year, it was still quite humanlike when it played,” Mr. Ke said after the game. “But this year, it became like a god of Go.”


Derek Jeter Night

May 14, 2017

They retired Derek Jeter’s #2 tonight at Yankee Stadium and all the greats were there. Everything has already been said about Jeter. He had an amazing knack for the dramatic.

The Dive:

A classic because it was Yankees vs. Red Sox and it was the 12th inning tied at 1-1 and there was a runner at second who scores if he doesn’t make this catch:

Mr. November:

This would be a World Series the Yankees eventually lose, but in the first World Series pushed into November, literally the first pitch after midnight, he hits a walk-off home run.

Hit #3000:

Of course it was a home run.

Final at bat of his career:

A game winning hit.

And of course, the flip:


Under a Million

May 10, 2017

When two bedroom apartments are enthusiastically reviewed as “under a million” it’s clear Brooklyn real estate prices are crazy. The place looks very nice, if too modern for my tastes. It’s a good neighborhood in Brooklyn. But it’s 939 square feet. That’s $985 per square foot. Crazy.

brooklyn-apartment-for-sale-clinton-hill-29-lexington-3b-2


Nate Silver’s ELO Rating

April 30, 2017

This is hilarious if you read FiveThirtyEight.com. You need to hover your mouse over the picture to get the alt text and truly appreciate the joke. This is via SMBC.

I like to imagine this is what it's like at Nate Silver's house.

Of course, if you don’t read FiveThirtyEight.com this is probably stupid to you…