Hedge Fund and Insider Trading News: Daniel Loeb, Warren Buffett, Brevan Howard Asset Management, White Square Capital, Bronte Capital, Seneca Foods Corp (SENEA), Artis Real Estate Investment Trust Unit (ARESF) and more


Warren Buffett never mentions this, but he was one of the first hedge fund managers to unlock the secrets of successful stock investing. He started his hedge fund in 1956 with $ 105,100 in seed capital. Back then, they weren’t called hedge funds, they were called “partnerships”. Warren Buffett took 25% of all returns above 6%.

For example, the S&P 500 index returned 43.4% in 1958. If Warren Buffett’s hedge fund had not generated any outperformance (ie invested secretly like a closet index fund), Warren Buffett would have pocketed a quarter of the 37.4% excess return. This would have been 9.35% in hedge fund “fees”.

In fact, Warren Buffett failed to beat the S&P 500 index in 1958, only returned 40.9% and pocketed 8.7% as a “fresh”. His investors didn’t care that he underperformed the market in 1958 because it had largely beaten the market in 1957. That year, Buffett’s hedge fund returned 10.4% and Buffett didn’t. took only 1.1 percentage point of this amount as a “fee”. The S&P 500 Index lost 10.8% in 1957, so Buffett investors were delighted to beat the market by 20.1 percentage points in 1957.

Between 1957 and 1966, Warren Buffett’s hedge fund returned 23.5% per annum after deducting Warren Buffett’s annual fee of 5.5 percentage points. The S&P 500 Index generated an average annual compound return of only 9.2% over the same 10-year period. An investor who invested $ 10,000 in Warren Buffett’s hedge fund in early 1957 sees his capital turn into $ 103,000 before fees and $ 64,100 after fees (this means that Warren Buffett has received more than $ 36,000 in fees from this investor).

As you can guess, Warren Buffett’s # 1 Wealth Creation Strategy is generate high returns of around 20 to 30%.

We see many investors trying to get rich in the options market by risking all of their savings. You can get rich by returning 20% ​​per year and accumulating that for several years. Warren Buffett has been investing and capitalizing for at least 65 years.

So how did Warren Buffett manage to generate high returns and beat the market?

In a free sample from our monthly newsletter, we analyzed Warren Buffett’s stock picks spanning 1999-2017 and identified the top performing stocks in Warren Buffett’s portfolio. This is basically a recipe for generating better returns than Warren Buffett achieves himself.

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