### Different Investing Philosophies | Aspect | Index Fund | Hedge Fund | Nassim Taleb | Buffett & Munger | |-------------------------------|-----------------------------------------|-----------------------------------------|-----------------------------------------|-----------------------------------------| | **Objective** | Mimic market index performance | Achieve high returns | Manage risk, capitalize on Black Swans | Buy wonderful businesses at fair prices | | **Management Style** | Passive | Active | Barbell strategy | Long-term holding | | **Fees** | Low | High (2% management, 20% performance) | Varies, often involves buying options | Low, focus on intrinsic value | | **Risk** | Lower, diversified | Higher, complex strategies | Hedging against tail risks | Focus on quality, margin of safety | | **Transparency** | High | Low | Embraces uncertainty | High, ethical businesses | | **Accessibility** | Available to all investors | Limited to accredited investors | Selective, often complex instruments | Available to all investors | | **Regulation** | Heavily regulated | Lightly regulated | Focus on robustness | Heavily regulated | | **Key Strategy** | Match index proportions | Leverage, short selling, derivatives | Barbell: extreme safety & risk | Concentration over diversification | | **Example** | S&P 500 Index Fund | Various hedge funds | Empirica Capital | Berkshire Hathaway | | **Investment Focus** | Broad market exposure | High-risk, high-reward opportunities | Options, volatility trading | High-quality businesses | | **Philosophy** | Diversification, low cost | High returns through active management | Avoid predictive models, embrace uncertainty | Quality over price, ethical management | This cheatsheet provides a quick comparison of different investing philosophies, highlighting their key aspects and strategies.