Bet 734

Duration 10 years (02017-02027)

“The Frank Value Fund, an actively managed US mutual fund, will outperform the S&P 500 Index over the next ten years net of all fees and expenses. ”

Brian Frank


Frank's Argument

This bet is in response to the Warren Buffett wager and comments made in his 2016 letter to shareholders. I believe the US equity market is in a financial bubble, and the ten year period ending in 2017 will have temporarily favored indexed strategies. Over the next ten years, the financial bubble will pop, and actively managed strategies, particularly those with the ability to hold cash when conditions do not meet their criteria, will outperform the various indices net of all fees and expenses. My goal is to bring long-term thinking to financial bubbles and the distortions they create. Indexation creates its own distortions through the breakdown of the free-rider principle, and this, coupled with extreme intervention by Central Banks over the past cycle are both unsustainable and dangerous.

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