Invest Like The Best
Episode 35 The Bet With Buffett
Invest Like The Best

Episode 35: The Bet With Buffett

The Bet With Buffett

Ted Seides was the co-founder, president and co-chief investment officer at Protégé Partners. We cover the details of his bet with Warren Buffet, if exclusive investing strategies can be replicated with cheap public market alternatives, and deploying capital via permanent equity.

This episode is brought to you by:

CFA Institute. CFA Institute is a global association of investment professionals, whose mission is to lead the investment profession by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society. CFA Institute serves a global community of investment professionals working to build an investment industry where investor's interests come first, financial markets function at their best and economies grow. The Chartered Financial Analyst credential is the most respected and recognized investment management designation in the world.

[00:02:08] – (First question) – Ted describes his first trip to a Berkshire Hathaway meeting

[00:03:20] – What is Ted most excited for when it comes to this year’s trip

[00:04:44] – How this now famous bet first came about

[00:05:48] – Had rocks, got rocks, fees in financial services

[00:07:16] – Structure and funding of the bet

[00:09:48] – How was PR handled from both sides of the bet

[00:12:55] – Berkshire Hathaway Shareholder Letter with Bet

[00:13:10] – Why was Ted willing to make this bet

[00:14:22] – Ted’s most recent piece on the bet/fees

[00:16:19] – Looking at the difference of exposures between the S&P 500 vs Fund of Funds

[00:19:08] – Exploring pricing of the S&P 500 over a long period of time

[00:22:04] – What should people take away from the bet

[00:27:12] – Can the more expensive, more exclusive investing strategies be replicated in a public market cheap alternative

[00:32:10] – At what level does it make sense to start looking at alternative level investment ideas

[00:35:03] – Are hedge funds an asset class or contractual arrangement, and what metric would Ted use if the bet were to be repeated

[00:40:13] – Knowing what he knows now, what are some of the changes Ted would make to this bet

[00:45:18] – The S&P is touted as a representation of the global economy but it only covers a fraction of it

[00:49:17] – Would Ted use fund of funds in a new bet

[00:52:52] – What was the most and least enjoyable part of this bet

[00:54:10] – What is another field of investing opportunities that Ted might not know as well that he is excited to explore

[00:56:54] – A closer look at deploying capital to buy smaller businesses

[01:00:42] – Resources for folks interested in deploying private capital

[01:03:02] – Bonus question about the S&P 500’s time-weighted return vs how volatility effects people’s holding in the index

[01:06:10] – How paper returns vs real returns in markets effect this equation of the bet

The Bet With Buffett

Introduction

Patrick
This weekend, I'll be making my first trip to the Berkshire Hathaway Annual Shareholder Meeting with a group of friends. It is therefore a great time to release this discussion with Ted Seides on the famous bet he made with Warren Buffett, which will no doubt be a key theme for the weekend's events. We discussed the origin of the bet, what it says about hedge funds in both the past and looking to the future, and what investors should consider when building their portfolios today. Stay tuned at the end of the conversation for a fun bonus question. If you're interested in asset allocation, hedge funds, alternatives, or fees, you'll find a lot to learn in this episode. You can find show notes at investorfieldguide.com/bet. Now please enjoy my conversation with my friend Ted Seides on his bet with Warren Buffett.

Berkshire Shareholder Meetings

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