David Swensen on Consuelo Mack Wealthtrack

[gindie]

This week and next week the Consuelo Mack Wealthtrack show (Consuelo Mack WealthTrack - Home - The Right Track To Your Financial Health) featured(s) David Swensen, the wildly successful manager of Yale's endowment fund. He gained something like 17% per year for 20 consecutive years (he lost 25% last year).

If you haven't ever seen Wealthtrack, it is a PBS show and archives all of its past shows on its website. She is a very good interviewer with great guests (Bill Gross of PIMCO, Bob Rodriguez of FPA Funds, and the recently deceased Peter Bernstein were featured recently).

 

[target2019]

I wonder if he'll address any of the strategy's shortcomings. For instance:

Yale’s Zero Growth
While the Standard & Poor’s 500 Index has increased 41 percent from its low in March, endowments have been weighed down by holdings of private equity, real estate and commodities, which haven’t recovered as fast. These assets are also harder to sell, making it more difficult for schools to raise cash.

Decade to Recover
Endowment earnings support 44 percent of the school’s spending. It will take more than 10 years for the fund, managed by David Swensen, to climb back to its value of $22.9 billion on June 30, 2008, according to Levin. Yale estimates the fund was $16 billion at the end of this June.

The article is dated 7-22-2009 and also examines other universities.

 

[tomintucson]

He made a ton of money on the way up, and lost a bunch on the way down. I can relate, that's my story too. You pays your money, you takes your chances.

I'm a big fan of both Consuelo Mack and David Swensen. He's a brilliant investor, much smarter than I am. He's quite aware of his shortcomings, and doesn't recommend that individual investors manage their portfolios as he manages the endowment.

Tom

 

[crazy connie]

The merry go round of investing has a lot of different ponies to ride along with a dragon and a bunny as well. Having a nice ride without falling off is my goal! I like the bright light and calliope tunes.

While not a big fan of this series I do enjoy some of the folks being interviewed and the show is not going at breakneck speed. That is really nice.

 

[haha]

When she interviews one person, I like it. When she has several, as soon as someone starts to say something with some depth, she switches to someone else. It is frustrating and not much information compared to printed sources, IMO.

I read the transcript of the Robert Rodriguez interview, pretty good I think.

Ha

 

[Dennis]

Well, this may shock you but?
1. I have 2 Portfolios, #1 is a Mix of Equities and Bonds or a Balanced Fund and the other #2 is a ALL Bond Port..
2. According to M* ? The past 5 and 10 yrs? They are about the same APY's and of course 2008 had alot to do with that, but they did about the same after 2002...
and the Bond Port had alot less volatility along the way..
3. If I had All Indexes? The Bond Port would be Way Ahead after 5 & 10 yrs..

I am Slowly Moveing more into the Bond Port and Less in the Equity/Bal Port and When The Equity/Bal. Port gets Even? I plan to close it up..

Of course, Wall Street, brokers, Writers Don't want us to know bonds can do about the same job or even a few % Less, but are safer.. If they did acknowledge this? People would Buy alot less Equities , Less Books, Newletters on owning Equities an they would all Loose $ and probably loose their jobs/Professions and have to really go to work for a Living..

And Corporations, Brokerage Firms and Advisors Spent over $5 Billion last yr in Advertising and Lobbying everyone Under the Sun to hype owning Stocks and Equities.. Gee, I wonder why?

As for Endowments and Colleges? I think they should all be TAXED for openers..and be forced to use ALL the $ given them to pay only for Subsidizing Students, not funding Useless Research projects and outrageous Teachers Salaries.. and Benefits..Just Liek Not-for-Profit Hosplitals .. If they made enough to pay their Bills and Pay Higher Salaries, built more buildings and hired more people? They made a Profit and should be taxed on it.. If you Inherited $, it's not taxable, but when it makes $ , that profit is taxable.. Anyone Could make +17% more if they didn't have to pay taxes on their earnings on Investments.. even My Port per M* says it has averaged over 14.6% apy past 10 yrs now and that's After paying btwn 15-28% CG taxes in my taxable Port..= ave of 21% taxes + 14.6% = 17.73% apy

 

[target2019]

I am Slowly Moveing more into the Bond Port and Less in the Equity/Bal Port and When The Equity/Bal. Port gets Even? I plan to close it up..

Of course, Wall Street, brokers, Writers Don't want us to know bonds can do about the same job or even a few % Less, but are safer.. If they did acknowledge this? People would Buy alot less Equities , Less Books, Newletters on owning Equities an they would all Loose $ and probably loose their jobs/Professions and have to really go to work for a Living..

Never too much equity exposure. I find comfort in the following:

The Intelligent Asset Allocator
By William J. Bernstein

Max Equity	Exposure Max loss
20%	5%
30%	10%
40%	15%
50%	20%
60%	25%
70%	30%
80%	35%
90%	40%
100%	50%

 

[Delawaredave5]

Good interview. Interesting comment about "where he has his kids money" -- index funds and a little bit in closed end funds trading at a discount.

What are "new issue TIPS" ? He says the stimulus program is going to either:
1. Work and generate high inflation, or
2. Not work and we'll have deflation

Said "new issue TIPS" are a good hedge either way.

I don't understand TIPS - and don't understand difference between "new issue"and TIPS funds.