Hey! They didn't even mention Long Bets! That's the site that registered the bet and is holding the money.<p><a href="http://longbets.org/" rel="nofollow">http://longbets.org/</a><p>Which I am going to pimp shamelessly here, as I wrote the code for it a decade ago. We have bets that go out many years. There's one that won't be decided until 2150. There's even one about how the universe will end.<p>If you would like to make a similar long-term bet, either use the site or let me know; I'm glad to facilitate. As long as the bet is more than 2 years out and the stakes are more than $200 each, you're golden.<p>We'd love to see the site used more to call out people making bold/crazy predictions. E.g., is somebody saying that NoSQL databases will rule the earth in 10 years? Do you think they're wrong? Tell them to put up or shut up! We'll put you both on record.
This shouldn't be too big of a surprise. Most academic research about hedge funds show that the majority of them don't outperform the market. When they do, it appears to be because of greater exposure to particular risk factors rather than manager skill (in investing, greater risk usually means greater potential for reward). When you consider the extra costs of investing in a hedge fund over investing in the market, most hedge fund investors are getting a bad deal -- they are paying more, but getting market returns.<p>One source that looked at 12,980 hedge funds with $1.8 trillion in management: <a href="http://faculty.baruch.cuny.edu/tbali/BaliBrownCaglayanJFE2010.pdf" rel="nofollow">http://faculty.baruch.cuny.edu/tbali/BaliBrownCaglayanJFE201...</a>
This is not a surprise. Academic research has shown that 80% of funds underperform index funds and do even worse when you factor in costs.<p>Its not sexy to say "take all your retirement money and put it into three funds: international stocks (eg. VEA), domestic stocks (eg. VTI), and domestic bonds (eg. AGG)" and rebalance it once a year to ratio based on your age but the research shows this is the most effective method of investing because it takes the emotion and costs out of it.
The advice I got regarding stock market from a pro was to invest long term in the 3 indexes: "spiders" (S&P 500), "cubes" (Nasdaq 100) and "diamonds" (Dow Jones Industrial Average), seems solid, outperforming funds and without management fees.
I think that it comes down to people. To become a C level executive or board member at a S&P company, presumably you've undergone a reasonably level of public scrutiny and shown the courage that Ben Horowitz sometimes references when talking about start up leadership, it takes to make the right and difficult decisions that benefit the business. Not every board member or executive, but the majority.<p>The companies in the fund of funds, presumably don't have the same "blue chip" ratings of the S&P companies and their management may still be undergoing their personal tests of courage.<p>In the end, in the absence of a extremely hot market - which could be a good or bad thing given the experience level of senior leadership, it's probably a better bet to go with the tried and true.