Tim Armour openly analyzes the $1 million wager made by Warren Buffett. The wager was a $1 million donation to charity, but was made on some pretty astounding claims.
According to the wager that was made, Warren Buffett would be competing against Hedge fund managers. However, Buffett would only be investing in an S&P 500 passive index fund. As it stands, Mr. Buffett will most likely be the one collecting on the bet.
Tim Armour analyzes the approach that Buffett is taking, and reveals his opinion on the stance Buffett is making, as well as the positives and negatives of the wager.
According to Armour, there are too many expensive options, and risky options, that hedge fund managers tend to fall back on. Armour supports the commitment to investing in stock that is low cost and simple. These investments should be held on a long term basis, and can be very profitable for both the investor and the hedge fund manager.
This method is considered a form of bottom-up investing, which involves rigorously analyzing lower cost stock and its future potential. However, these investments must be chosen carefully.
However, he does admit that many of these investments are risky, but not as financially risky as the mediocre, high end stocks that have become the “go to” stocks used by most hedge funds.
Who is Tim Armour
Tim Armour is the CEO and a chairman for Capital Group . He has over 34 years of experience in the Capital Group. His expertise is focused in global telecommunications and the U.S. Service companies.
For more information about Tim Armour, just click here. https://www.americanfunds.com/advisor/insights/market-commentary/tda-rwl-qavolatility.html