I wasn't going to return to this discussion, but, "breaking news" does justify one last comment. It so nicely brings us up to date (h/t Mr. Simon Lack) the hedge fund mirage.

We just got an update from Fortune's Carol Loomis (posted on the Fortune site) on how thing are going for Mr. Seides in his bet against a simple Vanguard S&P 500 index fund, and, as Ms. Loomis says, "it's looking like a rout." While Mr. Seides thinks nothing in investing is "black and white," it sure looks pretty darn clear (as clear as black-and-white, one might say) that his highly compensated staff (aka, "the best and the brightest") are getting clobbered by a passive index:

"Through the seven years, Vanguard’s 500 index fund, as represented by its Admiral shares, is up 63.5%. That’s the portfolio carrying Buffett’s colors. Protégé’s five hedge funds of funds are, on the average—the marker the bet uses—up an estimated 19.6%. (The “estimated” takes into account that not all of the five funds have final figures for 2014)," writes Loomis.

One can only wonder how you justify charging Protege's clients enormous fees over the past seven years to earn a mere fraction of a Vanguard fund at a de minimis fee. That's an investment letter and argument that only the best and brightest could draft, I'm sure.