Ted Seides - The Bet with Buffett – Hedge Funds vs. The S&P 500

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com.

**SPEAKER_2** (0:59)
Patrick O'Shaughnessy is a principal and portfolio manager at O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (1:21)
This weekend, I'll be making my first trip to the Berkshire Hathaway Annual Shareholder Meeting with a group of friends. It is therefore a great time to release this discussion with Ted Seides on the famous bet he made with Warren Buffett, which will no doubt be a key theme for the weekend's events. We discussed the origin of the bet, what it says about hedge funds in both the past and looking to the future, and what investors should consider when building their portfolios today.
Stay tuned at the end of the conversation for a fun bonus question. If you're interested in asset allocation, hedge funds, alternatives or fees, you'll find a lot to learn in this episode. You can find show notes at investorfieldguide.com forward slash bet. Now please enjoy my conversation with my friend Ted Seides on his bet with Warren Buffett.
So Ted, we're going to talk a lot about your famous or infamous bet with Warren Buffett today. But I thought a fun place to start would be, and you don't know this question is coming, for you to describe your first trip to a Berkshire Hathaway shareholder meeting.

**Ted Seides** (2:22)
Yeah. The first time I went, I was an equity research analyst at a hedge fund in the year 2000
And I remember it well because, well first of all, it wasn't at the big palatial auditorium or Convent Quest Center, I think it's called, where they have it today. It was a much smaller, it might have even been a church, I'm not sure if that's right. But it was a much smaller venue. I remember getting there and looking around and seeing packs of top hedge fund managers I knew and the world certainly didn't know who they were.
And there was a lot more, they've circled back to us, there was a lot about the company and really great investment lessons. I didn't go after that for a number of years, actually probably until around the time of the bet. And the first time I went after the bet, it was much more of a cartoon show. And I think in the last couple of years, it's circled back to kind of a balance between really fun entertainment and substance about the company.

**Patrick O'Shaughnessy** (3:21)
So you and I are going, I'm going for the first time and that's next week. I've never been.
And so given that we're going to be there together with a couple other mutual friends, what are you most excited for? So now that it's changed so much, I see these pictures, this massive auditorium of people, it's like a destination, a pilgrimage of sorts. So what should I be most excited for?

**Ted Seides** (3:41)
Well, I'm most excited to see it through your eyes. I had no idea it was your first trip. And there are some other folks I know, I can't, I'm not liberty to say who, but I think people will find out who are going for the first time.
And it's just, it's such a unique experience. Now I will say I've probably gone 10 times now.
And what I enjoy about it is spending time with so many friends that go out there. So it's as much about the weekend for me now as it is just the event. But it's one of the greatest unexpected comedy shows you'll ever see.