Southbourne Group Singapore, Tokyo Japan The Latest from Warren Buffet on Low-Cost Funds | Page 2

invested in hedge funds a decade ago lagged S&P gains. My calculation of the total shortfall, I believe, is
conservative.
"Public employees suffered more from the financial damage that affected pension funds. Many of such funds
are sadly insufficiently funded, partly because they have endured a double whammy: poor investment
performance along with large fees. The shortfalls coming from their assets will be made up for by local
taxpayers for decades.
"Human behavior will remain as is. Rich people, endowments, pension funds and the like will always feel they
have earned the right to get something “special” in investment advice. And as a result, the consultants who are
smart enough to take advantage of this expectation will reap a bountiful harvest. The favored investment this
year could be hedge funds -- and something else next year. The expected end to this string of sweet promises is
contained in a saying: “When a person with money meets a person with experience, the one with experience
ends up with the money and the one with money leaves with experience.”