Hedge Funds

[ERD50]

Codswallop and tarradiddle! This is one for the ages. What a great link, harley! ....

And there was another part, if I'm reading between the lines correctly, they are trying to make points by showing that old Warren isn't always right. Well old Warren said that we would trail the index due to the drag on fees, but we actually did worse! Hah! Warren doesn't know what he is talking about! It wasn't just fees, we under performed even w/o the dang fees! So take that!

Buffett’s case implies that the market should win by approximately the amount of fees paid to the hedge fund and fund of funds managers. However, after seven years of live action, the lead taken by the S&P 500 is substantially more than the difference in fees would suggest.

Just over half (24.4% ÷ 43.9% = 55.6%) of the underperformance by hedge funds can be attributed to fees. A full 19.5% of cumulative underperformance, or approximately 2.6% per annum, must have been caused by something else.

Yep, Warren was way off - only half of our under performance was due to fees. The other half was our own incompetence! We showed him!

Seriously, why did they respond? They just dug deeper and deeper. If I were in their (fancy Italian designer) shoes, I'd wait out the full ten years and hope for a miracle, or at least a little closing in the gap.

-ERD50