OK, so Warren Buffett might not be the richest person in the world, that title goes to Amazon CEO Jeff Bezos — who has already added billions to his fortune in 2018 so far. But, for Buffett, carrying an estimated net worth of about $87 billion, per Business Insider, we'd say that the business tycoon is doing pretty darn well for himself. And, guess what, he just earned a cool $2.22 million from a hedge fund manager named Ted Seides thanks to a 10-year bet, proving that life just isn't fair.
The Chairman and CEO of Berkshire Hathaway, Warren Buffett, made the bet with Seides all the way back on January 1st, 2008, with it recently commencing on December 31, 2017, with the thing even being tracked on a website called "long bets," which outlined all the details. In fact, the bet was pretty simple: Buffett argued that investing in low-cost S&P 500 Index Funds — one of his most famous pieces of investment advice — would, over time, always return more money than hedge funds.
However, Ted Seides, formerly of Protege Partners, didn't think that to be true, saying, "Through a cycle, nevertheless, top hedge fund managers have surpassed market returns net of all fees, while assuming less risk as well. We believe such results will continue.” Oh, man, never bet against Warren Buffett!
After the decade was up, the index fund annually returned 7.1 percent, while the Protege funds netted 2.2 percent, which, while still positive, wasn't enough to prove Buffett wrong. And, while $2.22 million is just chump change to one of the richest people in the world, it's still another example of how smart the Berkshire Hathaway CEO is in forecasting investment opportunities. It's no wonder he's built the fortune he has for himself.
For more information about how the bet between Warren Buffett and Ted Seides came to be, you can head on over to Medium, which has an article about the whole thing. Just another example of a smart man like Buffett winning at what he does best; making money.
In other news, why in the hell would anyone even dare make such a gamble against Warren Buffett in the first place? Ego's the presumed answer, but even that's not a good enough answer! Anyway, Seides did try to explain himself and his reasoning in an article for Bloomberg about six months before the bet was actually decided — ultimately conceding he was wrong. It's worth a read, because, damn, what a terrible decision to gamble with Buffett.
Lead image via Getty.