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Hedge-fund manager concedes losing bet against Buffett but hints at ‘doubling down’

  • Ted Seides admits to losing a 10-year bet with Buffett against the returns of the S&P 500.
  • Seides says "doubling down" today would be a better option.
  • "Investing in hedge funds is a bet against continuing bull markets," Seides writes in a Bloomberg story.
Warren Buffett held on to his stake in post-IPO Verisk, which has earned a hefty 207 percent return since October 2009, as of the close of business Sept. 30.
Adam Jeffery | CNBC
Warren Buffett held on to his stake in post-IPO Verisk, which has earned a hefty 207 percent return since October 2009, as of the close of business Sept. 30.

Nine years ago Ted Seides bet billionaire Warren Buffett that five hedge funds' returns, over a 10-year-period, could beat any gains on the S&P 500.

And today Seides conceded defeat, writing about his experience on Bloomberg.

High hedge-fund fees weren't the only reason for the loss, either, Seides explains.

Seides lists other factors, such as price and risk, and argues Buffett won because he "actively" chose what turned out to be the best investment over the 10-year period: the S&P 500.

"My guess is that doubling down on a bet with Warren Buffett for the next 10 years would hold greater-than-even odds of victory," Seides wrote.

"The S&P 500 looks overpriced and has a reasonable chance of disappointing passive investors. Hedge funds mitigate risk in bear markets, while seeking to participate in some of a bull market. Investing in hedge funds is a bet against continuing bull markets; investing in the S&P 500 is a bet on a continuing bull market."

Read the full story on Bloomberg.

Read: Buffett slams Wall Street 'monkeys', says hedge funds, advisors have cost clients $100 billion