In 2007, Warren Buffet made a now legendary bet with hedge fund managers, Protégé Partners. Buffet put $1 million at stake betting that his choice of a low-cost index fund would beat the cumulative net returns generated by Protégé Partners’ hedge funds over a period of 10 years.
Ten years later, co-founder of Protégé Partners, Ted Seides wrote, “For all intents and purposes, the game is over. I lost.” At the close of the bet, Buffet’s index fund had a compounded 7.1 percent annual return, compared to Protege's 2.2 percent.
