Money Warren Buffett has won his $US1 million bet he made against the hedge fund industry 10 years ago

18:32  03 january  2018
18:32  03 january  2018 Source:   Business Insider Australia

We now know who was behind the million-dollar bet that bitcoin will soar to $US50,000

  We now know who was behind the million-dollar bet that bitcoin will soar to $US50,000 The Wall Street Journal reported earlier this week that a trader or group of traders made a $US1 million ($AU1.3 million) bet on bitcoin going to $US50,000 ($AU65,000) by next December.On Wednesday, an unidentified entity made a $US1 million bet on bitcoin trading above $US50,000 by next December.

The Berkshire Hathaway chairman in 2007 bet $ US 1 million of his money that the S&P 500 would outperform a selection of hedge funds over the following 10 years . As of last week Friday, his S&P 500 index fund compounded a 7.1% annual gain over that period.

With 2017 over, Warren Buffett has sealed his victory over hedge funds in a bet he made a decade ago . The Berkshire Hathaway chairman in 2007 bet $ 1 million that the S&P 500 would outperform a selection of hedge funds over 10 years .

  Warren Buffett has won his $US1 million bet he made against the hedge fund industry 10 years ago © Provided by Business Insider Inc

With 2017 over, Warren Buffett has sealed his victory over hedge funds in a bet he made a decade ago.

The Berkshire Hathaway chairman in 2007 bet $US1 million that the S&P 500 would outperform a selection of hedge funds over 10 years.

As of Friday, his S&P 500 index fund had compounded a 7.1% annual gain over that period. The basket of funds selected by Protégé Partners, the managers with whom he made the bet, had gained 2.1%, according to The Wall Street Journal.

Buffett agreed to give the prize money to Girls Inc. of Omaha, Nebraska, a nonprofit he has previously supported.

Each side first put $US320,000 into a zero-coupon Treasury bond that they estimated would be worth $US1 million by 2018. But it was moved into Berkshire Hathaway's class B shares when the bond's value rose faster than expected. The 11,200 shares they bought in 2012 were worth $US2.22 million on Friday, The Journal noted.

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  Opinion: Heed Warren Buffett’s warning: bitcoin is pure FOMO Cryptocurrency mania rests on greater fools, writes Mitch Tuchman.MSFT

× Warren Buffett has won his $ 1 million bet against the hedge fund industry . In 2007, Warren Buffett entered a million-dollar bet with fund manager Protégé Partners that the S&P 500 would beat a basket of hedge funds over the next decade.

Warren Buffett has made billions thanks to his ability to bet successfully on investments over the years . Now, it looks like he 's about to win million more. In 2007, Buffett made a bet that the S&P 500 stock index would outperform hedge funds

Buffett has long taken issue with hedge funds' promise of outperforming the market and their high fees that take away from the returns their clients earn.

He has turned out to be right on both fronts.

Actively managed funds have seen outflows while passive funds have gained since the financial crisis. Meanwhile, an abundance of exchange-traded funds has made it cheaper and easier for investors to buy into just about any group of stocks.

"My guess is that doubling down on a bet with Warren Buffett for the next 10 years would hold greater-than-even odds of victory," Ted Seides, a founder of Protégé Partners, wrote in a concession piece on Bloomberg View in May. "The S&P 500 looks overpriced and has a reasonable chance of disappointing passive investors."

Intel pledges transparency after Spectre, Meltdown vulnerability .
The last week or so has seen a lot of activity around Meltdown and Spectre, two CPU flaws in modern chips from the likes of AMD and Intel. Apple, Microsoft and Google have provided interim fixes for their respective hardware, but it will take much more than simple patches (that can cause more harm than good) to truly eradicate the issue. Just a few hours after Intel revealed that there may be more slowdowns from its Meltdown processor fix, the company's CEO Brian Krzanich has written an open letter to further detail the steps Intel is taking to deal with the issues.

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