BUFFETT AGAIN SLAMS FUND MANAGERS
Dentists, plumbers add more value in aggregate, says Berkshire chairman
SEATTLE as a group, compared with doing it yourself or just randomly picking laymen,” said Buffett. “In the investment world it isn’t true. The active group, the people that are professionals in aggregate, are not, cannot, do better than the aggregate of the people who just sit tight.”
Vice-chairman Charles Munger said “it’s even worse than that” because some hedge fund managers with a long career in the industry, known for charging two per cent management fees and taking 20 per cent of profits, did well, attracted money and then lost it.
“The investing world is just a morass of wrong incentives, crazy reporting and I’d say, a fair amount of delusion,” said Munger.
Buffett also challenged as he has in previous shareholder meetings, the “two and 20” compensation model for hedge fund managers.
“If you even have a billion dollar fund and get two per cent of it, for terrible performance, that’s US$20 million (RM86.8 million),” said Buffett.
“In any other field, it would just
Buffett said gross domestic product per person in the US was six times higher now than when he was born, reiterating his optimism blow your mind.”
Buffett said the US$3 trillion hedge fund industry was “such a big game” that people were able to make “huge sums of money, far beyond what they’re going to make in medicine” or other professions.
“The huge money is in selling people the idea that you can do something magical for them,” said Buffett. Bloomberg about the nation’s ability to generate wealth.
The US unemployment rate fell to 4.4 per cent last month, the lowest since before the financial crisis, according to Labour Department figures on Friday. Bloomberg
Berkshire Hathaway shareholders waiting for the start of the Berkshire Hathaway annual meeting in Omaha, Nebraska, on Saturday.
Berkshire Hathaway chairman and chief executive officer Warren Buffett says people will be better off sticking their money in a lowcost index fund.