It's Market Efficiency By A Length

Five years ago, famed investor Warren Buffett placed a bet with the founders of the Protégé Partners hedge fund that the S&P 500 would outperform a hedge fund index chosen by Protégé partners over a 10-year period. At its heart, the bet was about market efficiency, that a group of most well compensated investment gurus could not outperform the broad stock market. At the five-year mark, the S&P 500 is up 8.69 percent, while the five hedge funds picked by Protégé are up only .13 percent. This marks the first time in the past five years that the S&P 500 is ahead of the hedge funds. The winner gets to choose the charity that will receive the $1 million plus prize. What does this bet mean for you? A former investment banker gives her view.