Capital Allocators – Inside the Institutional Investment Industry WTT: A New Twist on an Old Bet with Buffett
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Jul 9, 2025 Reflecting on a historic bet with Warren Buffett, the discussion contrasts hedge funds and the S&P 500, revealing unexpected outcomes. The focus shifts to a new challenge: comparing private equity against the S&P 500. Key performance factors like leverage and size are analyzed, alongside a clever betting proposal centered on North American buyouts. Engaging the audience, the hosts invite predictions about the future dynamics of investing.
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The Hedge Fund vs Buffett Bet
- Ted Seides made a 10-year charitable bet with Warren Buffett comparing hedge funds to the S&P 500 starting in 2008.
- The bet led to meaningful relationships, annual dinners with Buffett, and raised $2 million for Girls Inc. of Omaha.
Beware Hindsight Bias on Bets
- The bet's outcome should not be overanalyzed because hindsight bias and behavioral biases distort judgment.
- Annie Duke's concept of resulting explains judging decisions solely by their outcomes rather than the decision process.
Bet Created Lasting Connections
- Warren Buffett and Ted Seides held yearly dinners, inviting guests like Treasury Secretary Scott Besant and Charlie Munger.
- The bet proceeds helped Girls Inc. of Omaha buy the Protégé House for alumni support.
