Warren Buffet Plans to Embarrass the Leading Hedge-Fund Investors

When the news came about what warren had said, everyone was aghast with shock and surprise. Warren had wagered one of the most controversial bets ever. He said, that if he succeeded in outperforming and outdoing the leading hedge-fund investors the likes of Tim Armour in the span of less than a year, he would make and donate a million dollars to charity. How would he beat them? Well, here’s a recap of the rest of that story as shared on CNBC.

Warren Buffet got inspired to take on the challenge owing to the bad end of a deal millions of regular investors constantly received from the fund managers. It’s no secret that fund managers aren’t the most trusted of people. Many have been exposed for their shady dealing and engaging at the very expense of their clients. This is what happens. You give your money to an investment banker. They proceed to place a bet on particular stocks, commodities or ventures. Typically, clients hope to receive their dues and dividends on their shares and stocks at the end of let’s say, six months to a year.

Risky Intra-day Training

What the clients fail to realize is that the bankers are constantly using their money to engage in risky intra-day selling and buying and this is where the whole problem ensues. Again, Warren argues that it is much more costly today to trade with the investment bankers owing to the huge demand for their services, by the most ignorant investment community. After paying the handling fees and all the other hidden charges, you end up with zero to nothing returns on your investments. The alternative investment strategy model suggested by Buffet calls on doing away with the middlemen altogether. In other words, you will have to calculate the risks vs the rewards associated with any financial decision you intend to make.

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About Tim Armour

Tim Armour agrees, to some extent, with what Warren has to say. That’s why he’s quoted in the CNBC article reiterating the need for the investors to first check out the credentials and the background of the company they hope to do business with, moving forward. Tim Armour is no stranger to the investment world. On the stark contrary, this man has worked as a top business leader and executive in established multinational spanning companies like Capital Group Inc.

Read more: Q&A With Portfolio Managers Tim Armour and Rob Lovelace

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