Welcome

Hello, welcome to "Ignorance Arbitrage." I will be posting a "mission statement" at some point, but I wanted to begin with a comment on a recent article from on Harvard Univeristy's Endowment that Felix Salmon posted as well.

I think most commentaries on overlook in this discussion is that Harvard was without a fund manager (though, in his defense Felix Salmon did note this here). Active institutional portfolio management strategies when crossed with passive management equals the liquidity disasters that Harvard may be (have been, see my second point) facing. Yale-- under Swensen's tenure-- while losing money has largely avoided these liquidity difficulties as Swensen is happy to point out.

Moreover, one wonders how much the reporting of Harvard's difficulties is lagging the data-- now that credit is "easier," I imagine that Harvard's illiquid assets are more liquid than they were two or three or six months ago. Some of their value may have returned as well. Moreover, the data on "calls" from PE firms hasn't changed in several months-- is it still a current and pressing crisis?

I'm not denying Harvard (and the Academy in general)may be hurting right now, but to extrapolate from this moment to declare this the end of Harvard or to use this information to condemn the "new" endowment strategies is a bit short-sighted (ignoring, for instance, the fact that illiquidity allowed Harvard to have 34 billion to fall from). I'm not one for predictions, but I can't help but think that the return from crisis in the financial world is going to make us think that the reaction to this particular aspect of the crisis may be overblown and a bit late.