contrarian@coalmine

Performance for Harvard, Yale Endowments in 2008

RememberCTR...You state that "Yale, Harvard, Stanford, MIT, Princeton did not grow to be $15-40 Bn funds on donations"....you're correct, but don't discount the compounding effect of donations which span, in Harvard's case, the 138 years since the endowment's inception (ie. aprox. 1870); it's a stable source of annual liquidity from the most affluent alumni in the world. And, as to the question about whether I enjoy shooting from the hip, I can answer unabashedly, "Of course I do, Isn't that what the world of blogging is all about?"

Market Student, says that "A 50% YTD return is very impressive. Could you please publish your portfolio for us to view?". I would if I could, but what I was actually trying do was make a point, utilizing the literary techniques of sarcasm and gross exaggeration, to emphasize that a fund manager should not provide total returns without calculating in mark to market or unrealized losses. Otherwise, we're talking fictional returns.

Performance for Harvard, Yale Endowments in 2008

Rememberctr...you state "The donation numbers are public and they only account for <10% of the endowment growth." If donations are counted as actual portfolio return on a year to year basis, then that's one-hell-of-a competitive edge for these endowments. Give me a 5-10% head start on the S&P 500 every year...and I'd be a legendary portfolio manager.

This is the year of the mark to market confessional for all money managers...there's no escaping. I'm too lazy to ascertain what equity positions Yale and Harvard hold long term [don't tell me that they have 100% yearly turnover], but I would bet AIG,LEH,GE,WM,MS,PFE,C... etc. are among them...not to mention their diversification into brutalized emerging markets.

I still have no hesitation questioning the veracity of the above claim that Harvard is beating the market by almost 20% this year, and is actually showing a positive return...minus in flows of cash donations.

Boasting exceptional returns when your internal audits are not made public is disingenuous at best. It's like saying "we use the same measuring stick when evaluating legacies as we do when accepting other students". How else do you explain George Bush's Yale (BA) and Harvard degrees (MBA).

Performance for Harvard, Yale Endowments in 2008

Flamorte...You state, "he may not always be right, butr he is not mendacious in his representation of his fund's methodology"...but that's not my point, nor the point of this particular blog. If your mentor is not marking to market, then it's not exactly an apples to apples presentation of 2008 returns relative to the market or peer performance.

I'm up 50% this year if I don't calculate unrealized losses into my performance...but no one would, or should, bother blogging about that achievement.

And, by the way, I'm not going to buy the non-mercenary philosophy of Ivy League endowment managers...afterall, who is the new CEO of Pimco...

Performance for Harvard, Yale Endowments in 2008

I don't believe their professed returns are verified by an independent auditor. I know both funds hold illiquid real estate and the same types of poor performing bond positions that every other fund manager is holding.. but theirs have obviously not been marked to market. I'm also certain that they have core investments in many of the U.S. large cap stocks that have been taking a beating this year. And, I doubt the the covenants of the Yale and Harvard endowments allows for massive shorting of the market.

I hate calling someone a liar...but, there seems to be smell of mendacity emanating from the Ivy covered offices of those funds.