According to Fortune It's halfway time in the 10-year stock
market wager sometimes called The Million-Dollar Bet—that's Warren Buffett
backing the performance of an S&P index fund vs. a New York money manager
backing five funds of hedge funds—and there's double-barreled news.
Item One: For the first time since the bet started five
years ago, Buffett has moved ahead—by an okay margin to boot. Item Two: For the
first time ever as well, both sides have crawled out of the ditch (though the
funds of funds barely made it) and are showing positive results.
About that history of bad results, of course, you need to
keep in mind that this bet started in the gut-wrenching year of 2008, which
left both contenders deep in the red. Buffett, though, was definitely a deeper
shade of red: Vanguard's Admiral
shares—the S&P index fund he'd backed—lost 37% in 2008 vs. a 24% drop, on
the average, for Protégé's five funds of funds.
So now the tortoise, after crawling four more years, indeed
leads. At the five-year mark, the Vanguard index fund backed by Buffett is up
by 8.69%. The five funds of funds picked by Protégé Partners to carry its flag
in the race are up, on the average, only—"gulp," says Protégé partner
Ted Seides—0.13%.
P.S. By the terms of the bet, the identity of those five
funds has never been made public. It has always been assumed, however, that one
of them is a fund of funds run by Protégé itself.
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