Hedge fund manager fails to beat the market, owes Warren Buffett a million bucks


Originally published at: https://boingboing.net/2017/09/18/mediocritocracy.html


It could have been more embarrassing for Seides. Buffett could have matched him against a chimp with a chart of stocks and some darts (who might have beaten the S&P).


You can tell he was going to lose this bet because he had the bad sense to bet against Warren Buffett, ffs.




Time to pay da man, I guess.


Seides still gets to laugh because the million bucks is chump change compared to what he still gets paid for losing other people’s money.


Buffett is fond of rubbishing managed funds and famously instructed his wife to keep all her wealth in index funds after Buffett’s death.

This is worded ambiguously enough that i was confused for a few. I had to look up to see if Warren Buffet had died, he hasn’t. I think what that sentence is getting at is that he asked his wife to keep her wealth in index funds only should he die.


Being the ethical man that he is, Seides will now (no doubt) close down his “fund of funds” and instruct his clients to invest in a low-cost S&P 500 index fund.

Hahahahaha. Just kidding. No he won’t.


Part of the reason I hate that my company provides only a managed 501(k) that charges percentages to pay for mindless simpletons like this who will lose money for me.


As a side note, very gracious of this man to admit his mistake.

It should be expected, but it is always appreciated when people act with real class.


He will die.
Just like everybody else.


“I beg to differ”


Thanks for derailing my post? I don’t see how that’s pertinent with my point. Of course he’s going to die some day


I’m sorry. Your post was worded ambiguously enough that i was confused there for a bit.


Even Voldemort Peter Thiel won’t be able to cheat death.
He probably will be able to upgrade to the premium service on the ferry across the Mersey Styx, though.


Kind of like betting on the Washington Generals.


The real chumps are Seides clients.


So, here’s the crux of my thinking on this, when considering how to invest the modest savings of my family.

We have opted for a “socially managed portfolio” (no extraction industry, no MIC, etc.) as a reflection of the maxim put your money where your mouth is. However, I’ve long been aware that we’re potentially leaving significant returns on the table when compared to an S&P index fund. This grates on me. Why is there not a socially responsible sub-set index of the S&P 500?

I’ve concluded that most of the 500 are socially irresposible.


Seidel’s clients are exactly the chumps whose change it is. The bills he still gets to keep for himself.


You’re not going to like this answer: it really doesn’t matter much whether small investors’ investments include sin stocks or not. The people doing that have the effect of making capital for the sin stocks more expensive, but that ends up meaning the folks who DO invest in sin stocks get better returns. That drives up the demand for the sin stocks and depresses the demand for the others, which the large and institutional investors jump on-- and the final result is the same amount is invested in the same people it was invested in before.

On the other hand, this dynamic means your returns probably won’t be much WORSE than if you invested in the whole market-- so if you can find an exchange-traded fund or something that’s sufficiently diversified and is ethically acceptable to you, you should be okay. bloomberg.com: Cormac Mullen - Investors Can Be Ethical and Still Beat the Market, Study Says.