'Buffett Being Buffett' Bracket Challenge
As we all know, Warren Buffett is the greatest living investor in history -- and Warren gets better with age.
Unlike most billionaire octogenarians, who spend months on their yachts in the Mediterranean or winter in their oceanside mansions in Palm Beach, Florida, and Summer on Lily Pond Lane in East Hampton, Warren (at 83 years of age) has not lost a step.
Warren Buffett, the man who General Electric (GE), Goldman Sachs (GS) and Bank of America (BAC) go to when they need $5 billion to $10 billion of extra capital during economic crises, recently appeared on CNBC to advertise that his Berkshire Hathaway (BRK.A/BRK.B) is insuring the Quicken Loans $1 Billion Bracket Challenge With Yahoo! Sports.
The contestant who selects a perfect bracket will receive a top prize of $1 billion. Entries will be restricted to 15 million entries. The top 20 most accurate brackets will receive $100,000 each.
As was the case with Berkshire Hathaway's rescue of General Electric, Bank of America and Goldman Sachs several years ago (at the economic and stock market nadir), by insuring the contest, Warren is the big winner here as he bets with the odds stacked immensely in his favor (and so do Quicken Loans and Yahoo! Sports win).
Here is why:
- No one will win the contest. If you don't believe me, read the fine print on the rules page, which explains the odds of winning are one in 9 quintillion. This is consistent with the math and science site Orgtheory.net, which states that there are more than 9 quintillion possible ways to fill out the 64-team bracket. That is much more of a long shot than the one in 259 million odds of winning the grand prize in Mega Millions or the one in 175 million odds of winning the top prize in Powerball. John Diver, the director of product development for ESPN Fantasy has stated that "in the 13 years that ESPN has had NCAA bracket contests, no one has ever come close to a perfect bracket, even though there have been 30 million entries.... In fact, only once in the last seven years has anyone gotten the first round perfect." If all the people who live in our country filled out the brackets (randomly) and ran the contest for nearly three centuries, there would be a 99.3% probability that no one wins the contest.
- Warren Buffett's Berkshire Hathaway has offered $1 billion before and has lived not to pay it. That was back 11 years ago when numbers were printed in the bottle caps of Pepsi products and a monkey drawing the final numbers to see if anyone would collect the $1 billion prize failed to find a winner.
- And the winners are Berkshire Hathaway, Quicken Loans and Yahoo! (YHOO). Berkshire Hathaway takes in a large (but undisclosed) premium in the unlikely event that someone wins, and Quicken Loans gets a lot of free information from the applicants regarding their housing intentions and current mortgage rates. According to a recent Slatearticle, a mortgage lead such as the one Quicken Loans is receiving in the contest, can be valued at between $50 and $300 per lead. In order to submit a bracket an applicant must create a Yahoo! account, so Yahoo! wins, too.
During March Madness some of TheStreet's Wall Street Pros, including Jim "El Capitan" Cramer and Stephanie "The Missing" Link, will participate in the Beat TheStreet Bracket Challenge on ESPN.com.
Join us at www.thestreet.com/espn to participate in the contest, which will likely be as much fun and as rewarding as the Quicken Loans challenge! In our case, all participants are entered into ESPN.com's contest wherein the top 1% of all brackets on ESPN.com will be entered into a random drawing for a $10,000 Best Buy gift card, and the participant with the most points on the Beat TheStreet Bracket Challenge will receive a basketball signed by Jim Cramer and Stephanie Link.
Thanks and enjoy March Madness. And try to Beat TheStreet!
This column originally appeared on Real Money Pro at 11:00 a.m. EDT on March 17.
At the time of publication, Doug Kass was short BRK.B.