????Results are in for 2011, the fourth year of the 10-year wager that is sometimes called, rather loosely, The Million-Dollar Buffett Bet. In this competition about investment performance, Warren Buffett is contending that an S&P 500 index fund will outscore the average return of five hedge funds of funds picked by his betting opponent, New York asset management firm Protégé Partners.
????The standings now -- which we will reveal in a minute -- inevitably bring to mind Buffett's reaction after the bet's first year, 2008.
????Both sides were clobbered in that market year from hell. But Protégé's fund-of-funds picks (whose names, by the terms of the bet, have never been publicly disclosed) were down, on the average, by "only" 23.9%. Vanguard's Admiral shares, which are Buffett's entry in the bet, lost a dismal 37%.
????From this way-behind position, Buffett was quoted in Fortune as saying, "I just hope that Aesop was right when he envisioned the tortoise overtaking the hare."
????And that's close to what has since happened. Buffett's index-fund tortoise won the second and third years and -- you are reading it here first -- also prevailed in the fourth. Not that the 2011 winner was much of a star: Admiral shares were up only 2.08%. But the five funds of funds, on the average, were down 1.86%.
????All of which leaves tortoise and hare gasping alongside each other at the end of four years -- and having absolutely nothing to cheer about. Protégé is still a bit ahead. But its funds of funds, on the average, are in the minus column for the period by 5.89%. Admiral shares are down 6.27%.
????If we really mix metaphors and think about this contest as a baseball game, what we have here is a 0-to-0 tie after four innings, with each side doing nothing but striking out and alienating every fan watching.
????The wager, however, has produced one sterling investment over the four years -- and that was made, without brilliance aforethought, by Buffett and Protégé themselves. A little background: The idea was to set terms that would deliver $1 million to a charity chosen by the winner. If Buffett triumphs, the money goes to Girls Inc. of Omaha; if it's Protégé on top, the beneficiary is Absolute Returns for Kids.
????To ensure that $1 million would be there at the end of the bet, Buffett and Protégé each put up roughly $320,000 to buy a zero-coupon Treasury security. The total of about $640,000 was used to purchase a bond that will be worth $1 million at the bet's conclusion. This collateral is being overseen by the Long Now Foundation of San Francisco, which administers "long bets" set up by any competitors wanting to memorialize a gamble.