Individual Investors Investing Like Yale

[SeattleCPA]

Wall Street Journal yesterday had a column from Jason Zweig about how individual investors can invest like Yale Endowment fund.

The TLDR summary: Most people can't. And you should have an eight figure net worth to even try according the sources Zweig cites for the article including economist Laurence (Larry) Siegel.

Irrelevant for most MMMers. But some here have talked about applying Swensen's institutional investing ideas. For those people, probably worth reading the article. Even if you have to run out to news stand with yesterday's copy:

This link points to a page behind the payroll but some probably subscribe so here is article:

https://www.wsj.com/articles/yale-university-endowment-alternative-assets-b4bd3258

3/13/2023 Edit: Zweig's little article basically discusses the same info from this free online PDF from Siegel: https://larrysiegeldotorg.files.wordpress.com/2023/02/ajo-alts-masses-col.pdf

[nouseforausername]

Interesting! On the Yale Model from Yale itself (no paywall), see: https://investments.yale.edu/about-the-yio

It's a relatively brief -- 30 year -- data set. But, nice to peek under the hood.

[JupiterGreen]

What do you think of their portfolio? That particular article is behind a paywall, but if I remember correctly Yale has a large percentage of its portfolio in international funds, is that correct? Does anyone here do that? We're not heavily invested in international at the moment.

[nouseforausername]

You can google its components -- lots of non-retail stuff: leveraged buyouts, venture capital, natural resources. It has slowly diminished its domestic equity holdings. Looks like international equity and cash levels are rising.

But, its performance is remarkably similar to a classic 70/30 portfolio over the longer haul.

All that work and maneuvering. And it'll eventually return to that mean past this one year blip.

Plus, the articles from a few years on the Yale Model were lamenting its demise v. S&P.

This is probably part of a broader trend of the return of the popularity of active mgmt when the market is choppy. When, the narrative was the exact opposite twelve months ago. :]

[MustacheAndaHalf]

Wall Street Journal yesterday had a column from Jason Zweig about how individual investors can invest like Yale Endowment fund.

Jason Zweig has an impressive list of books he has edited & co-authored.  He's received awards for his many years of writing on investment topics.  But I'm leery of viewing him as an expert on institutional investment strategy, as I don't see that in his background.
https://en.wikipedia.org/wiki/Jason_Zweig

I also hit a paywall with that article.  Since I stopped actively investing a few weeks ago, I'm not planning to subscribe.

[MustacheAndaHalf]

Interesting! On the Yale Model from Yale itself (no paywall), see: https://investments.yale.edu/about-the-yio

It's a relatively brief -- 30 year -- data set. But, nice to peek under the hood.

Eyeballing Yale Endowment's allocation, I estimate:

25% venture capital
20% absolute return
15% leveraged buyouts
10-15% cash and fixed income
10-15% foreign equity
10% real estate
roughly 5% natural resources

[SeattleCPA]

Interesting! On the Yale Model from Yale itself (no paywall), see: https://investments.yale.edu/about-the-yio

It's a relatively brief -- 30 year -- data set. But, nice to peek under the hood.

Eyeballing Yale Endowment's allocation, I estimate:

25% venture capital
20% absolute return
15% leveraged buyouts
10-15% cash and fixed income
10-15% foreign equity
10% real estate
roughly 5% natural resources

About a page down in this blog did I did a few years ago, I stuck a table that compares Swensen's advice for individual and most institutional investors to what he did at Yale:

https://evergreensmallbusiness.com/successful-active-investor/

My numbers differ a little bit from what you've harvested from more recent Yale disclosures. But maybe not by much. (For the list I constructed, he was about 70 percent in real assets (like Timber), absolute return assets (so some hedge funds), and private equity. Then a little slice in US bonds. Probably Treasuries? And then little 10-15 percent-ish slices in US stocks and foreign stocks.

[SeattleCPA]

Wall Street Journal yesterday had a column from Jason Zweig about how individual investors can invest like Yale Endowment fund.

Jason Zweig has an impressive list of books he has edited & co-authored.  He's received awards for his many years of writing on investment topics.  But I'm leery of viewing him as an expert on institutional investment strategy, as I don't see that in his background.
https://en.wikipedia.org/wiki/Jason_Zweig

I also hit a paywall with that article.  Since I stopped actively investing a few weeks ago, I'm not planning to subscribe.

He was really quoting and showcasing Laurence Siegel's research work and ideas on endowment model. Siegel BTW has a free PDF here with a sort of back and forth set of essays where he and Richard Ennis debate the goodness of the endowment model:

https://larrysiegeldotorg.files.wordpress.com/2021/07/ajo-siegel_ennis.pdf

[SeattleCPA]

Sorry I should have posted a link to this article with original message.

Here's a link to the free PDF from Siegel that Zweig I think is riffing off of:

https://larrysiegeldotorg.files.wordpress.com/2023/02/ajo-alts-masses-col.pdf