And he would have been wrong 1998-2008, provided that the managed hedge fund literally just kept all their money in cash.
The point is, "Stick it in the SAP 500" would have been a losing proposition. You would have lost 20% of your money, and lost 10 years of opportunity cost to boot.
We both agree that if you could have foreseen that decade, you would have sold all your stocks in 1998, put it on a savings account, and only have taken it out again in 2008.
Anyone who says "just stick it in the SAP500 and you'll make some money" is hiding the fact that even with a 10 year time-frame, that statement is not always true.
1998 - 2008 was a blood bath for many, despite the fact that you had 2 legitimate booms in there.
If a basket of managed funds did the same or worse in that period then probably not for a passive investor.