This is interesting! Shoddy writing int he Fortune piece though.
"The amount handed over [to charity], though, is not likely to be $1 million, because of changes that Buffett and Protégé made in the wager a couple of years ago"
One paragraph later:
"Buffett also issued a guarantee: He will pay the winning charity $1 million if the Berkshire stock bought isn’t worth that much at the bet’s end."
Nitpicky I know, but it sounds like the winning charity is guaranteed $1 million.
Proponents of index funds have been proposing exactly this sort of portfolio for about 40 years. (Well, okay, 40 years ago was the origin of the first index fund, Vanguard's S&P 500 tracker; a portfolio amalgamating three market segments like this would only have become possible somewhat later.) The specific 60/40 stock/bond mix here (with moderate international exposure) is solidly in the "bog standard investment advice" category, too: I wouldn't be surprised if it's what most people would choose if they wanted to avoid accusations of post hoc selection bias. (In fact, that's my only point of concern with the choice: it's a distribution that I associate more with mildly cautious middle aged families than with major institutions. But I think that's the point.)
I think that just about any indexing fan would be perfectly content to say, "Yeah, please feel free to track this mix into the future, too." It's one size fits all investment advice, but again, that's pretty close to what index funds are all about.
It's within a few percentage points of the holdings of the Vanguard LifeStrategy Moderate Growth Fund (VSMGX). There's a little more international in that, and there's an international bond fund included. And there's the 0.16 cost ratio, rather than 0.19.
That's a great point, however his comparison is actually the "standard" 60/40 index fund split, which means he's not retroactively picking a winning mix - he's comparing them to the control group, so to speak.
It would be interesting to see a sensitivity analysis of the mix to see what range of reasonably commonly recommended index strategies would match this baseline. Otherwise, it's very easy to cherry pick a set of funds to prove almost anything.
Buffett is very likely to win that bet.
http://fortune.com/2015/02/03/berkshires-buffett-adds-to-his...
http://longbets.org/362/