From the Buffett special on CNBC tonight, in reference to whether or not hedge funds can justify their fees:
But in Wall Street you have this progression from the innovators to the imitators to the swarming incompetents. And what happens is that the results achieved by the innovators enable the product to be sold by a lot of people simply because the record of a few people was good. So the idea that billions–well, trillions of dollars can be managed to get above average results while charging fees that are way higher than normal just defies the–just defies the logic. So, in aggregate, people are going to be disappointed with the results you get from hedge funds.”
Innovators –> Imitators –> Swarming Incompetents. I love that. The same could be said about the Web2.0 trend, but I’m not here to talk about that. Not now anyway.