Light the Cigar
Warren Buffett will almost certainly win his 2007 wager with investment manager Protégé Partners that, for the ensuing decade, the S&P 500 would outdo a pool of five hedge fund of funds. The funds raced to a huge early lead, courtesy of the 2008 stock market crash, which dropped the index 37%. The hedge funds lost only half as much, for the simple reason that they were ... hedged. (Sometimes with investment research, the blindingly obvious suffices.)
For that same reason, the funds trailed the index badly during the ensuing stock market rally. Because that rally was longer and larger than the downturn, the competitive position reversed, with the index moving well in front. The index has now gained 71% since the bet took effect, with the funds at 25%.