Author Topic: Warren Buffett's 6-hour Q&A on investing - streaming live right now! :^D  (Read 5845 times)

Grigory

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Hey everyone,

This is the first year Buffett is streaming his annual Q&A session with shareholders - the convention center in Omaha just can't fit everyone. It's going to go from 7am till roughly 1pm Pacific time. This is an excellent chance to learn more about money, investing, economics, and all that good stuff. :) You can watch the entire thing live on Yahoo Finance: http://finance.yahoo.com/brklivestream

Have fun!

Seppia

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Awesome, thanks for sharing, I'm in!

FrenchStache

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I loved the speech he gave before the break on S&P 500 vs Hedge Funds/Managed Funds.  He has made a $1M bet that the vanguard SP500 fund would beat any hedge funds over a 10 year period.  8 years into the bet, the SP is up ~60% vs the managed funds ~20%.  Reminds me of the same speech we get from financial advisors on how their funds are so much better etc while the fees pile up.


AdrianC

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I loved the speech he gave before the break on S&P 500 vs Hedge Funds/Managed Funds.  He has made a $1M bet that the vanguard SP500 fund would beat any hedge funds over a 10 year period.  8 years into the bet, the SP is up ~60% vs the managed funds ~20%.  Reminds me of the same speech we get from financial advisors on how their funds are so much better etc while the fees pile up.

Wall Street Journal called it "Warren Buffett’s Epic Rant Against Wall Street":
http://blogs.wsj.com/moneybeat/2016/05/02/warren-buffetts-epic-rant-against-wall-street/

Love it!

FrenchStache

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That made the whole session worth it for me.  Reinforced the notion for me to step away from my financial advisor and take care of things on my own.  Keep it simple in low cost index funds.  People just can't accept that it's that easy, they think there must be a better way!

solon

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Wanna watch it? Click here: https://finance.yahoo.com/brklivestream/ and fast forward to 2:42:00. The segment is about 10 minutes long.

hodedofome

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I loved the speech he gave before the break on S&P 500 vs Hedge Funds/Managed Funds.  He has made a $1M bet that the vanguard SP500 fund would beat any hedge funds over a 10 year period.  8 years into the bet, the SP is up ~60% vs the managed funds ~20%.  Reminds me of the same speech we get from financial advisors on how their funds are so much better etc while the fees pile up.

A little nitpicking but it's not ANY hedge fund, as I can name quite a few off the top of my head that have done much better than the S&P during that time period.

GreatLaker

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A little nitpicking but it's not ANY hedge fund, as I can name quite a few off the top of my head that have done much better than the S&P during that time period.
For a little more nitpicking, how many of those would you have chosen 8 years ago at the start of the bet?

Here are some excerpts from an article by Ted Seides, founder of Protégé Partners, the other party in the bet:
http://www.businessinsider.com/fund-manager-explains-his-losing-bet-2015-2

The bet is against 5 hedge funds, each of which is a fund of funds.
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“Fund of Funds” is the composite return of the five hedge fund of funds selected by Protégé Partners, LLC (“Protégé”) for the Bet.

He explains how if the factors that caused Protégé to be losing the bet so badly are factored out, it is actually a tie:
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We believe the headwinds faced by hedge funds have resulted from a combination of the substantial outperformance of the S&P 500 over global equity markets and the adverse impact of the Fed’s Zero Interest Rate Policy (ZIRP) on hedge funds relative to other investment vehicles. Together, these factors wreaked havoc on a bet, the prospects of which we initially felt quite confident about. As we intend to show, the residual performance after adjusting for the impact of this investment environment manifests a return stream that could have been beneficial to a diversified portfolio of risk assets under different circumstances.
and
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After adjusting for the market environment, hedge funds had a positive residual return amounting to slightly more than the amount of fees they received. With all the hullaballoo created by lovers and haters of the investment vehicle, we appear to have a tie.

He also explains that in the future, hedge funds are likely to be more successful:
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In summary, the upcoming environment will likely be more conducive to hedge fund success than it has been

I want that guy investing my money!


MrDelane

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He explains how if the factors that caused Protégé to be losing the bet so badly are factored out, it is actually a tie:


Hahahaha.  That's brilliant.
That could be said of any competition in any scenario.
Remove the factors that caused one side to lose and the result will be a tie.

Seppia

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"If I didn't have the extra 20lbs of fat I don't need, I could sure jump as high as that guy"

Grigory

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A little nitpicking but it's not ANY hedge fund, as I can name quite a few off the top of my head that have done much better than the S&P during that time period.

Somewhere out there, there will always be somebody outperforming the market. Statistically speaking, though, you won't find that person and will instead end up with an underperforming hedge fund manager. If you have a foolproof way to see how well a hedge fund will do a decade from now, I'd appreciate it if you shared it with the rest of us. ;)

solon

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A little nitpicking but it's not ANY hedge fund, as I can name quite a few off the top of my head that have done much better than the S&P during that time period.

Somewhere out there, there will always be somebody outperforming the market. Statistically speaking, though, you won't find that person and will instead end up with an underperforming hedge fund manager. If you have a foolproof way to see how well a hedge fund will do a decade from now, I'd appreciate it if you shared it with the rest of us. ;)

And, whoever took the other side of Buffet's bet was allowed to pick ANY fund they wanted. That was the point - pick whichever fund you think will beat the S&P - and this is what happened.

hodedofome

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Warren Buffett's 6-hour Q&A on investing - streaming live right now! :^D
« Reply #12 on: May 08, 2016, 01:46:30 PM »
My comment had nothing to do with predicting performance, only that frenchstache said the S&P would beat any hedge fund. Which is wrong.

Just glanced at some managed futures funds that have been around for 25+ years and haven't cut back their leverage to satisfy institutional investor desires. 5 out of 6 that I looked at had beaten the S&P since 2006. But even if they just tied the S&P, they would be worthwhile additions to a portfolio as they are uncorrelated with stocks and bonds. So when stocks are sucking it's most likely the trend following funds would be doing well. This allows an annual rebalanced portfolio to outperform any of the individual components and with lower volatility.

Sure wish they were available to non millionaires in fully leveraged form. The managed futures mutual funds out there are cut down on the leverage and won't do near as well as the full blown hedge funds.
« Last Edit: May 08, 2016, 02:24:53 PM by hodedofome »