Funds & IndicesSimplicity

Buffett's Million-Dollar Bet

A plain index fund beat a hand-picked set of hedge funds over ten years

Warren Buffett dared the pros: beat a cheap index fund for ten years with hand-picked hedge funds. Would you have taken his side?

You'll find out

  • Who took Buffett's dare
  • Who won the first year
  • Where the prize money went

Why it matters

Buffett's own money on the line turned an argument about fees into a ten-year race anyone can check.

About 4 min7 interactive slides · 5 questionsLesson 106 · Zone 12

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More in this zone

  1. 100FundsA Basket Instead of One EggA fund holds many investments at once
  2. 101IndicesWhat an Index IsA list that stands in for the whole market
  3. 102IndicesThe Dow Started With 12Only one original member lasted into this century
  4. 103FundsActive and Passive FundsPicking stocks or buying the whole list
  5. 104FeesWhat 1% Costs Over a LifetimeA small fee can take a big slice of the result
  6. 105Active ManagementMost Pros Beat the MarketOver 15 years, most US stock funds trailed the S&P 500
  7. 107FundsETFs and Mutual FundsTwo wrappers for the same basket
  8. 108Investor BehaviorDoing Nothing Is HardPeople who traded the most earned the least