Just before lunch at the Berkshire Hathaway Inc. annual meeting on Saturday, Warren Buffett unloaded what he called a "sermon" about hedge funds and investment consultants, arguing that they are usually a "huge minus" for anyone who follows their advice.
The Berkshire chairman has long argued that most investors are better off sticking their money in a low-fee S&P 500 index fund instead of trying to beat the market by employing professional stockpickers. He used the annual meeting to update the tens of thousands in attendance---and others watching via a webcast--about his multi-year bet with hedge fund Protege Partners. The bet, initiated by the New York fund back in 2006, was that over a decade, the cumulative returns of five fund-of-funds picked by Protege would outperform a Vanguard S&P 500 index fund, even when including fees.
Mr. Buffett showed a chart comparing the cumulative returns of the two sides of the bet since 2008. As of the end of 2015, the S&P 500 index fund had a cumulative return of 65.7%, outdoing the hedge fund teams’s 21.9% return. The S&P has outperformed in six of the eight individual years of the bet too.
The chart was preamble to the real point Mr. Buffett wanted to make: that passive investors can do better than “hyperactive” investments handled by consultants and managers who charge high fees.
"It seems so elementary, but I will guarantee you that no endowment fund, no public pension fund, no extremely rich person" wants to believe it, he said. "They just can't believe that because they have billions of dollars to invest that they can't go out and hire somebody who will do better than average. I hear from them all the time."
But he was just getting started.
"Supposedly sophisticated people, generally richer people, hire consultants, and no consultant in the world is going to tell you 'just buy an S&P index fund and sit for the next 50 years.' You don't get to be a consultant that way. And you certainly don't get an annual fee that way. So the consultant has every motivation in the world to tell you, 'this year I think we should concentrate more on international stocks,' or 'this manager is particularly good on the short side,' and so they come in and they talk for hours, and you pay them a large fee, and they always suggest something other than just sitting on your rear end and participating in the American business without cost. And thenthose consultant, after they get their fees, they in turn recommend to you other people who charge fees, which... cumulatively eat up capital like crazy."
Mr. Buffett said he's had a hard time convincing people of this case.
"I've talked to huge pension funds, and I've taken them through the math, and when I leave, they go out and hire a bunch of consultants and pay them a lot of money," he said, earning a laugh from the crowd. "It's just unbelievable."
Shut the fukk up clown. Warren has issue with these consultants who don't know what the fukk they are talking about and charging a premium for that nonsense. This is in no way related to what Bernie's delusional ass is always crying about.
This c00n ass fakkit mad as fukk 
