Why Warren Buffett is richer than George Soros

George Soros and Warren Buffett are two of the richest men in the world, but certain circumstances have helped Buffett come out on top. 

By , Guest blogger

  • close
    Investor Warren Buffett speaks to students at Georgetown University with Bank of America CEO Brian Moynihan (not pictured) at an event co-sponsored by Bank of America and the Global Social Enterprise Initiative (GSEI) at Georgetown's McDonough School of Business in Washington last month.
    View Caption

If you're not familiar with Veryan Allen, he writes these insanely awesome rants about how the passive indexing cult is clueless and real alpha is out there for real managers to capture. I love reading his stuff, even when I disagree with some of it.

He's just tweeted a link to a classic post on his aptly and spartanly titled "Hedge Fund" blog,  in which we learn about how Warren Buffett is essentially the lead hedge fund manager in the universe even though he runs, for all intents and purposes, a no-fee actively managed closed-end fund.

I especially liked this part, where he explains why Warren Buffett has become wealthier than George Soros (not that it matters at that level), despite Soros's better performance...

Recommended: Warren Buffett: 10 investment insights from the master

"Mid-career professionals like Warren and George are thriving while hedge fund managers aged under 80 gain experience. Over 41 years and net of fees George has turned $1,000 into $14 million and Warren to $3 million from his actively managed closed end fund. He charges less fees than "cheap" unskilled index funds and his hedge fund is available to anyone with $80 to invest.

George's track record is better but Warren is richer. Why? The snowball of POSITIVE compounding for longer. Both were born in August 1930 and Warren ran his hedge fund from 1957 but George didn't set up his until 1969. Warren was lucky to be in Omaha while Dzjchdzhe Shorash was in Budapest, more affected by WW2. Also Warren got into currency trading and philanthropy later. George's outperformance is due to stronger international diversification and because reflexivity is ignored."

Head over to read the whole post, it's great food for thought.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here.To add or view a comment on a guest blog, please go to the blogger's own site by clicking on www.thereformedbroker.com.

Share this story:
 
 
Make a Difference
Inspired? Here are some ways to make a difference on this issue.
Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.
 

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...