Jun

24

Did Bacon's invisible hand guide these institutions investing in the "alternatives model" at just the wrong time? Darn cycles changed again…

At what point do they at least partially
throw in the towel and barrel back towards a higher % in US stocks?
Perhaps a new guru will rise up to replace the old Yale one, the with a
record of superior returns based on an unconventional and innovative
approach - holding an over-allocation to US equities.

From this WSJ article "Big Investors Missed Stock Rally":

Corporate pension funds and university endowments in the U.S. have missed out on much of the rally for stocks since 2009, following a push to diversify into other investments that have had disappointing performances.

Some argue that the shift stems at least partly from an effort to ape the strategy of David Swensen, who has long led the endowment of Yale University.

A 2012 paper written by Mr. Goetzmann and another professor at the Yale School of Management, Sharon Oster, argues that university endowments often invest in hedge funds simply to catch up with their closest competitors, rather than to achieve top returns, a shift the professors call "herding behavior" and "trend chasing."


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