Buffett's $1 Million Bet: Index Funds vs. Hedge Funds

Подписаться 5 млн

Просмотров 96 тыс.

50% 1

Warren 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
Subscribe to the WSJ channel here:
bit.ly/14Q81Xy
More from the Wall Street Journal:
Visit WSJ.com: www.wsj.com
Follow WSJ on Facebook: / wsjvideo
Follow WSJ on Google+: plus.google.com/+wsj/posts
Follow WSJ on Twitter: / wsjvideo
Follow WSJ on Instagram: / wsj
Follow WSJ on Pinterest: / wsj
Don’t miss a WSJ video, subscribe here: bit.ly/14Q81Xy
More from the Wall Street Journal:
Visit WSJ.com: www.wsj.com
Visit the WSJ Video Center: wsj.com/video
On Facebook: / videos
On Twitter: / wsj
On Snapchat: on.wsj.com/2ratjSM

Опубликовано:

22 фев 2017

Ссылка:

Скачать:

Готовим ссылку...

Добавить в:

Мой плейлист

Посмотреть позже

Комментарии : 106

@danbuchner28 6 лет назад

384 people are hedge fund managers. ;-)

@lixirui5645 6 лет назад

Dan Buchner hedge funds are practically scams apparently

@yinghanfu9047 Месяц назад

This isn't a comment that people understand now.

@danbuchner28 Месяц назад

@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 Год назад

We have to mention that 1million $ bet for Warren is like us betting 2$ 😅

@WubbyPunch Год назад

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 Год назад

@@WubbyPunch How do you buy a house then? Or a car.

@whentheuh 6 месяцев назад

@@csuporj loans and mortgage lol? do u think ppl just make 300k a month and buy a house like that or what

@youreyesarebleeding1368 3 года назад

NOOOOO! YOU CAN'T JUST PICK RANDOM STOCKS AND LEAVE IT!!!!!!! haha index funds go brrrrrr

@MP-ut6eb 3 года назад

😂😂😂😂😂😂

@Ikaros23 2 года назад

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 лет назад

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 года назад

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 года назад

@@Rykershot101 ikr?

@zainabe9503 4 года назад

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 года назад

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 года назад

@@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 Год назад

@@jimmyneutron129 that's right

@csuporj Год назад

@@jimmyneutron129 Why not buy Berkshire stock instead of sp500?

@jimmyneutron129 Год назад

@@csuporj who cares if he told people to buy his company lol?

@rogeliomj2644 7 лет назад

Why the dislikes?

@tyler7992 5 лет назад

Rogelio MJ bunch of people pissed they got ripped off by hedge funds.

@wallopwallop9125 4 года назад

Tyler lololol index funds all the way

@ericdahl2915 2 года назад

morons

@Faraz70 11 месяцев назад

What was the performance of Jim Simon's Medallion fund during this time period?

@DarkoFitCoach Месяц назад

Yes SOME can do it. But very few. Warren is 1 of them and peter lynch was another. But most cant

@chelsea7xhf 3 года назад

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 года назад

Can you cite some source, it is an interesting point you have made

@Chris-cx7zk Год назад

@@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 Год назад

Why not invest in Berkshire?

@csuporj Год назад

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 Год назад

@@csuporj sp500 is meant for investing 10-20 years. It is not an emergency account.

@naruparu7881 3 года назад

407 people are hedge fund managers

@user-ok6ef9zn4f 7 лет назад

YES, BIGLY

@tulsideviakashahidakhan6175 3 года назад

Same talks are going on in India now a days. Only difference is, here the fees are not that high for active funds too.

@Nik-rx9rj 3 года назад

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

@Lukas-tf3nu 7 лет назад

you never stood a chance in this battle you started. Now watch as wsj slowly starts to die day by day

@JC-hu3yj 5 лет назад

Steven Kraus Hedge fund managers are a bunch of snowflake crybabies 😂

@Turbo_GT1 3 года назад

He himself charged 4-5% during his partnership 😂😂 he knows that

@vava-lw9ds 3 года назад

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 года назад

@@vava-lw9ds no he took 1/4 of the profit after 6 percent return.

@MrSanbonsakura 3 года назад

0:35

@jonitalia6748 5 лет назад

Lol how about the cat that outperformed pros

@honiahakaa 7 лет назад

more dislikes

@Khadangasantos 4 года назад

Why so many dislikes:(

@LordandGodofYouTube 4 года назад

They are people with money in hedge funds :)

@billsmith6652 2 года назад

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 10 месяцев назад

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 Месяц назад

Warren knows he is one of the few to be able to beat the market

@kishores7034 Год назад

Obviously these analysts are sore losers

@chiefrocka8604 4 месяца назад

Not one white kid in the charity adverts That’s diss custin

@ThePilot3332 7 лет назад

PewDiePie did nothing wrong

@MarkSmithhhh Год назад

What a flex

@anoopdattana9506 2 года назад

Legend 👍

@wallstreetbeef2489 4 года назад

$dia $spy

@Jacob-hv5tl 7 лет назад

worst media outlet in history. no arguement

@DominiqueS 7 лет назад

Jax The Rack yeah really boring

@Jacob-hv5tl 7 лет назад

my comment or WSJ

@bighands69 6 лет назад

Let me guess because the WSJ is not pro liberal Democrat you are not a fan of them.

@kiethmergard 2 года назад

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 Год назад

You'd still lose.

@DarkoFitCoach Месяц назад

U think u can outperform hedgefund managers who even they underperform the market? 😂

@uttaranghosal5129 2 года назад

WB is best 🤗🤗🤗🤗🤗🇺🇸🇺🇸🇺🇸🇺🇸🇺🇸🇮🇳🇮🇳🇮🇳🇮🇳

@itsmesaltax 4 года назад

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 года назад

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 года назад

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 года назад

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 года назад

good luck picking those mutual funds out of thousands of mutual funds, its too big of a risk

@Ikaros23 2 года назад

@@rayallen953 Bingo!

@drkInxgud 6 лет назад

except if you get ur money into medallion fund ....

@zainabe9503 4 года назад

@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 Месяц назад

Whats the 5-10 and 15yr return in that fund?

@GetRich101 2 года назад

Haha wow

@theklrdudeoo9173 6 лет назад

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 лет назад

theklrdude oo Yeah taking half of your money sounds very fair

@tyler7992 5 лет назад

So? He’s paying the same amount of money. Wouldn’t you rather give money to a charity the the government

@whisper1776 4 года назад

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 года назад

@@whisper1776 so many people believe that tax deduction = reimbursement of 100%

@pranjayarora8115 4 года назад

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 года назад

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 года назад

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 года назад

@@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 RU-vid LIKE MF /BITCOIN

@DarkoFitCoach Месяц назад

So sp500 got 65 and investor got 39 and u rather have the investor return? 😂😂😂

@phisicoloco 7 лет назад

#hypofritz #IStandWithPewDiePie #FuckFakeNews

@zirax2545 7 лет назад

going back to RT this is 100% trash news

@bighands69 6 лет назад

And how is RT better? What they talked about was simple and easy to understand.

@chrismccord1841 6 лет назад

RT is Russia Television right? That's better than WSJ?

@maxlatour7912 5 лет назад

Well if Hedge Funds had a 'printing press' like the SP500, they would out perform too !

@hawjtsim 5 лет назад

Warren can make the bet because he and his friends can manipulate both markets, it's just a game

@JC-hu3yj 5 лет назад

Billy Hedge fund managers like you are a bunch of snowflake crybabies 😂

@LordandGodofYouTube 4 года назад

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 Год назад

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