In 2008, Warren Buffett issued open bet in Long Bets ( one of the ventures of Amazon Founder Jeff Bezos). At this site, anyone can issue a bet and anyone can take the opposite direction if they want to challenge the bet. Each party will name the charity of their choice to receive the winnings if they win.
The bet is as follows
“Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S&P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs and expenses.”
Protege Partners (fund of funds) took the opposite position of this bet.
In simple terms, you can not beat SP 500 index consistently if you take into all the fees and other expenses.
RESULTS
After nine years into it, Buffet is leading by great margin.
Buffet SP 500 - 85.4%
Protege - 22%
We have another 5.5 months left this year but you can see from the results, it will be hard for Protege Partners to win this bet. You can check out these results at this location.
Bottom line just buy SPY :) constantly I guess.