So, the efficient market theory vanquished active management (okay, people still argue over this but given the amount of money flowing into passive indexes and ETFs . . . ). Now Warren Buffett says the S&P 500 can outperform a professionally picked hedge fund of funds. Back in May 2006, Buffett placed a $1 million wager putting his money where his trap is: Specifically, he says the Vanguard S&P 500 index fund can beat 10 hedge funds, net of fees, over 10 years, according to Fortune.
It took 2 years, but it appears we have a challenger. The website, longbets, reveals that New York investment firm, Protégé Partners, has stepped up and placed its bet. The New York Post reports that the winner will emerge at 2017's end. As of this morning, 79 percent of longbets' visitors are in Buffett's corner, with the remaining 21 percent rooting for Protégé.
The unprecedented seems to happen all too frequently in financial markets. Is there something wrong with the way financial advisors build their clients' portfolios? "Post" Modern Portfolio Theory says yes, and it's gaining currency...
• Create value from dormant assets such as appreciated stock and real estate,
• Guarantee lifetime income for the donor and beneficiaries,
• Retain assets that might otherwise be liquidated due to tax and estate-planning decisions, and
• Build a charitable legacy...
