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by SatvikBeri 2738 days ago
Yes, it was a sucker bet. The funds Protege picked were actually funds of funds that basically had a .6 correlation to the S&P 500. So Buffett was almost guaranteed to win if the markets went up over 10 years, and lose if they went down. And it's very rare for the market to be down over a 10-year period.

Honestly I have no idea what Protege was thinking.
1 comments
Simon_says 2738 days ago
Probably he was thinking that there was small chance that the hedge funds would outperform the S&P, and in that case, it'd be a hell of a PR move, which he could leverage to get more AUM. From a game-theoretic point of view, it's possible the bet had a positive expected value for him even if he knew he'd likely lose.
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