The Bet with Buffett (Capital Allocators, EP.05)

Capital Allocators – Inside the Institutional Investment Industry

Ted Seides – Allocator and Asset Management Expert

Investing, Capitalallocation, Business

4.8 • 806 Ratings

🗓️ 2 May 2017

⏱️ 73 minutes

🔗️ Recording | iTunes | RSS

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Summary

Today’s show is a little different from my ongoing series of conversations with Capital Allocators. As you probably know, about 9½ years ago I made a bet with a certain Oracle, in Omaha, that pitted the performance of a group of five hedge fund of funds against the S&P 500.

In this year’s annual letter to Berkshire Hathaway shareholders, Warren wrote extensively about his views. You can find that letter at www.berkshirehathway.com/letters.

Now I haven’t said a lot about the bet, although fairly often I’m asked how it came about, why I made the bet, what I really think about hedge funds and the market, and of course, who's winning.

I thought long and hard about whether to share my views publicly, and had been leaning towards staying out of the limelight. But my guest on Episode 2 of this podcast, André Perold, convinced me that I should share the many other investment lessons the public can learn from this exercise.

I thought a podcast would be a perfect venue to discuss my thoughts, so I asked my friend Patrick O’Shaughnessy to discuss the bet with me, and that conversation follows.

Before we dive in, I thought it might help to let you know where to find answers to some of those common questions I’m asked.

For starters, Carol Loomis, the legendary and recently retired Fortune columnist, wrote a wonderful piece called “Buffett’s Big Bet” back in 2008 that described in detail how the bet came to pass. You can find her piece at www.capitalallocatorspodcast.com/bet.

On that same page, you can find links to some of my written thoughts – both at the time of the bet’s inception and two years ago. Next week, I’ll add another link with some concluding thoughts.

For more episodes go to CapitalAllocatorsPodcast.com/Podcast

Follow Ted on twitter at @tseides

Transcript

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0:00.0	Capital Allocators is brought to you by Ten East, an investment platform for sophisticated investors to access private markets.
0:10.5	Ten East brings benefits of having your own family office without the cost and headaches of doing so.
0:16.8	It's founded and led by Michael LaFelle, former deputy executive managing member of Davidson Kempner.
0:24.2	Michael and his investment team offer members the opportunity to co-invest by offering at their
0:29.1	discretion. Michael and his team source, diligence, and commit material personal capital to each
0:35.3	investment. The opportunities shared on the Ten East platform
0:38.9	offer exposure to private credit, real estate, niche venture and private equity, and other
0:44.5	idiosyncratic investments that typically aren't available through traditional channels.
0:49.2	The principles have over a decade track record of investing in these types of exposures
0:53.5	across more than 350
0:55.7	transactions. Post-investment, the Tennis team conducts ongoing monitoring and reporting,
1:01.8	just as you'd expect from an institutional investment organization. I've known Michael for about a
1:07.0	decade, and after becoming impressed by the quality of 10 East offerings, its research process,
1:12.2	and high-quality investment team, I became an advisor to the organization, an investor in multiple
1:18.0	offerings. You can learn more and join me as a member at 10-east.com. That's the number 10,
1:25.4	east.co.O.
1:33.5	Capital Allocators is also brought to you by SRS Aquium.
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