Crushing Harvard's Mighty Endowment Fund?

Leo Kolivakis's picture

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Tue, 05/31/2011 - 08:48 | 1324787 Downtoolong
Downtoolong's picture

Good for her. When you think about it, using options to bound your risk and reward has similar results to deleveraging. I made my highest returns over the last 18 months (about 27% pa) simply selling call options over my few individual stock positions in a market that is basically going nowhere. Someone who is financially naive might jump to the conclusion that this is a risky strategy. But, of course it is actually a more conservative strategy than simply holding the stocks outright.

Still, there seems to be some contradictions in her strategies that would lead to higher cost. Why pay a premium for a put option to protect against volatility and loss while at the same time pay a premium to a hedge fund to achieve greater volatility and gain? This doesn’t seem like alpha to me.  Seems more like someone who buys both life insurance and an immediate annuity (essentially mirror contracts) and pays the insurance company a fee and margin for both.  Sometimes, the best thing to do is nothing.

Tue, 05/31/2011 - 07:28 | 1324734 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

Dancing will get you arrested in the USA


Five reasons Canada's four Western Provinces is the safest quadrant on our Planet...

Tue, 05/31/2011 - 07:15 | 1324722 Gene Parmesan
Gene Parmesan's picture

I was worried that you had forgotten your usual pathetic sales pitch for Montreal-based hedge fund managers, but there it was, right at the end despite having nothing to do with the story. You're nothing if you aren't predictable, Leo.

Tue, 05/31/2011 - 08:59 | 1324762 Leo Kolivakis
Leo Kolivakis's picture

What's truly pathetic is how US institutions are consistently blindsided by consultants who shove them in the same hedge funds and fund of funds. Time to think outside the box!!

Tue, 05/31/2011 - 10:46 | 1325295 CPL
CPL's picture

Yes it is Leo.  Hedge funds are always popular with lazy shit investors that HOPE that they can turn a profit.


Outside of the box in any situation right now means buy gold, silver and FARM land.  Secondary investments in canned goods and shotguns.

Tue, 05/31/2011 - 09:51 | 1325054 oddjob
oddjob's picture

Time to think outside the box!!

Wow, just over a week ago you were trumpeting Micheal Sabia, a retread white collar welfare the fuck is that thinking outside the box?

Tue, 05/31/2011 - 06:38 | 1324707 TexDenim
TexDenim's picture

WSJ reports this morning that Goldman lost 98% if Libya's Sovereign Wealth Fund -- so it could be worse at Harvard.

Tue, 05/31/2011 - 09:13 | 1324919 JP McManus
JP McManus's picture

"Lost" or "Stole"?

Tue, 05/31/2011 - 11:08 | 1325378 sun tzu
sun tzu's picture

More likely they stole, since we know GS never loses when trading their own money.

Tue, 05/31/2011 - 02:16 | 1324588 chump666
chump666's picture

good post this.

what will be interesting is the bull short position and/or puts on the s&p500.  Which i think should correct at a 20% or more (then Qe3).  Commodities should correct hard, but long term...yeah i can roll with that. India GDP is weakening, that and china could fall into a tech recession.

watching risk FX crosses ala CAD and AUD

Tue, 05/31/2011 - 08:00 | 1324767 Dolemite
Dolemite's picture

I agree with all of this chump666

Charts looking to confirm a stallout in risk

Gold looking to go a bit higher

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