[masonium]

> In other words, the bet didn't really prove anything other than that the hedge fund industry overall is less attractive than the broader market.

The context of the original challenge suggests that this was the intention. I actually think that it proved something a little stronger.

If some moderately savvy investor were deciding whether to invest her $1m in index funds or hedge funds, she would actually have to choose which hedge fund to invest in. Presumably Ted Seides knows more than our example investor would about hedge funds (and has access to more of them she would). So Ted is an (optimistic) stand-in for how well she would actually have done, which is frankly the more relevant question.

On a related note, Ted probably didn't invest in RenTec, or at least not the Medallion Fund, because he can't. Most funds. like Medallion, that can consistently beat the market will either stop taking additional investments or straight up return capital to investors and trade their own money. Buffett doesn't actually go so far as to claim that no one can beat the market (after all, he did); his claim is merely that our average investor can't really take advantage of it to beat the market themselves.