The Investor That Made Warren Buffett Look Dumb
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Description
Because the Medallion Fund is widely considered the most successful investment vehicle in history, and you've probably never even heard of it. It was Renaissance Technology's flagship hedge fund. Because for more than two decades, the Medallion Fund generated over 60% annualized returns before fees, and roughly 39% after fees. And for context, Warren Buffett averaged around a 19% annualized return over his career. Meaning, if you compounded 10K at Buffett's returns for 20 years, $324,000. But if you invested that same $10k with the Medallion Fund's returns, that $10k would have grown to a little over $7 million. So yeah, you could say the Medallion Fund was pretty successful.
The Short explains that the Medallion Fund, run by Renaissance Technology, is widely viewed as one of the most successful investment vehicles in history and is something many people have never heard of. It states that for more than two decades the fund generated over 60% annualized returns before fees and about 39% after fees. The creator compares this to Warren Buffett, who is said to have averaged around a 19% annualized return over his career. Using an example of compounding $10,000 at Buffett’s 19% for 20 years, the Short claims it would grow to about $324,000. It then contrasts that with using the Medallion Fund’s after-fees returns on the same $10,000, which the Short says would grow to a little over $7 million. The segment concludes that, based on these numbers, the Medallion Fund was extremely successful.
Viewers describe the topic as serious but the delivery as unserious, while still encouraging learning by framing it as “the fun way” for finance and economics. Many comments emphasize that the Medallion Fund is not available to the public, being restricted to Renaissance employees, and characterize it as insider territory with specialized talent and tools. Several viewers argue the strategies are fundamentally different from Buffett’s approach, often noting high-frequency or high-volume trading mechanics and that Buffett’s strategy remains more replicable for typical investors. There is also disagreement on valuation and relevance, with some calling the comparison overrated or irrelevant, while others say the fund’s performance is simply extraordinary. A few comments express general confusion about investing and money, and others praise that the comparison is still interesting educationally.
Topics · finance · stock market · markets · business · economics
Questions answered
- What annualized returns does the Medallion Fund generate before and after fees?
- It is described as generating over 60% annualized returns before fees and roughly 39% after fees over more than two decades.
- How do Warren Buffett’s average annualized returns compare to the Medallion Fund using the same $10,000 investment over 20 years?
- The Short claims Buffett averaged around 19% annualized, which would turn $10,000 into about $324,000 after 20 years, while the Medallion Fund’s after-fees returns would turn $10,000 into a little over $7 million.