Friday, September 25, 2009

* A Pound of Flesh at Yale (and Harvard too): Closet Usury? Portfolio Poker? Mercantile Mirage?

The following excerpts from a Yale Daily News front page article 9/23/09 ("It's official: Yale's worst loss ever") remind me that I have an uncomfortably sneaking suspicion every time I contribute to my 403B:

Aren't I really just a Closet Usurer every time I indulge my illusion ( my fantasy?) that I can make more money in the stock market than in Treasury Bonds or bank interest?

When I hear Mr. Swenson's investment techniques for Yale called a "long term strategy" it dignifies my complicity a bit. But my apprehension nags on.

If I were really honest, isn't the entire Stock Market investment "strategy" promoted by the mutual funds and the Mr. Swensons of the world (even the portion touched by the magic wand of Warren Buffet) little more than an elaborately intricate shill game ? A kind of Portfolio Poker? A mercantile mirage?

Pardon me for being heretical in an idolatrous society which unabashedly worships money.


Published Wednesday, September 23, 2009


It’s official: Yale’s worst loss ever
The Yale endowment posted a 24.6 percent investment loss in the fiscal year that ended June 30, falling to $16.3 billion in its most severe decline ever, University officials announced Tuesday.

. . . Swensen’s approach emphasizes investing for the long term, and, indeed, over the past 10 years, Yale’s endowment has still outperformed benchmarks: The fund returned an average 11.8 percent over the past decade, beating annual results for domestic stocks of negative 1.2 percent and domestic bonds of 6 percent. If Yale’s investments had performed comparably to the average return of other college and university endowments over the past 10 years, the endowment would be $10 billion lower.

But this year saw a stunning reversal of fortunes: Endowments such as Yale’s and Harvard’s, which racked up enormous gains in recent years through alternative and illiquid investments, were hit hardest in the financial collapse. Meanwhile, portfolios such as the University of Pennsylvania’s, which holds mostly stocks and bonds, lost 15.7 percent. . .

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