Warren Buffett delivered a “sermon” (his word) at the annual Berkshire Hathaway investors meeting. His message? “All the commercial push is behind telling you that you ought to think about doing something [with your investments] today that’s different than you did yesterday,” but, he said: “You don’t have to do that. You just have to sit back and let American industry do its job for you.” According to Buffett, passively investing in an S&P 500 index fund “absolutely gets the record of American industry,” whereas “the net result of hiring professional management is a huge minus.” The Wall Street Journal’s blog post on Buffett’s address notes that he is eight years into a 10-year bet with a hedge fund about whether an S&P 500 index fund or the hedge fund’s actively selected funds would perform better. The index fund has gained a cumulative 65.7%, while the hedge fund’s picks have added only 21.9%. In contrast to Buffett’s “sermon” on the benefits of passive investing, however, Berkshire’s Charlie Munger noted that investing in Berkshire “worked even better” than an index fund. The company’s shares have risen 1,598,284% since 1965, compared to 11,355% for the S&P 500. Nonetheless, his point regarding the incentives driving the investment management industry is difficult to argue with: “no consultant in the world is going to tell you ‘just buy an S&P index fund and sit for the next 50 years'” because “you don’t get to be a consultant that way. And you certainly don’t get an annual fee that way.”