Protégé Partners, my counter-party to the bet, picked five “funds-of-funds” that it expected to over-perform the S&P 500. In the aggregate, do these investors get their money’s worth? Indeed, again in the aggregate, do investors get anything for their outlays? American investors pay staggering sums annually to advisors, often incurring several layers of consequential costs. I made the bet to publicize my conviction that my pick – a virtually cost-free investment in an unmanaged S&P 500 index fund – would, over time, deliver better results than those achieved by most investment professionals, however well-regarded and incentivized those “helpers” may be.Īddressing this question is of enormous importance. Now I have the final tally – and, in several respects, it’s an eye-opener. Last year, at the 90% mark, I gave you a detailed report on a ten-year bet I made on December 19, 2007. In Warren Buffett’s 2017 annual letter to shareholders (released on February 24, 2018), he summarized the result of his bet in the section “’The Bet’ is Over and Has Delivered an Unforeseen Investment Lesson” as follows: See previous CD posts about Buffett’s bet here and here. In 2007, Warren Buffett entered into a famous bet that an unmanaged, low-cost S&P 500 stock index fund would out-perform an actively-managed group of high-cost hedge funds over the ten-year period from 2008 to 2017, when performance was measured net of fees, costs, and expenses.