Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached • Hacker News Board

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#171

Post by DavidHm » Tue, Mar 22, 2016, 7:29 AM UTC

beeboop wrote: post #77

SilasX wrote: post #66

Earlier quoted context omitted.

Being able to find where you are on the risk/return and growth/income spectrums is not hard enough to merit the hundreds of millions of dollars in fees. For whatever strategy you want, find the corresponding index fund with that strategy, and it will probably have done better after expenses and will have more liquidity and less volatility.

Generally there is a small annual fee in addition to a cut of the profits. Profits on huge gaining years seem really high, but you're forgetting the essentially zero profit (or losses) on years with negative or no returns. Those years are not necessarily (and in reality, not at all) the fault of the hedge fund. They still provided a very valuable service in down or break-even years. Also, managing billions of dollars…

Most active investment strategies are not scalable - true.

But the real issue is that there is no convincing proof that active managers can reliably out-perform passive investment strategies over long term.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#172

Post by hkmurakami » Tue, Mar 22, 2016, 7:31 AM UTC

chrisabrams wrote: post #147

inthewoods wrote: post #126

Earlier quoted context omitted.

Even worse, in my opinion, is that these institutions can continue to be considered Not for Profit organizations. Harvard is very interesting in this way - they have so much money in their endowment that they seek all kinds of investment. Real estate is one of their favorites. When they buy property, it can no longer be taxed. This is why the towns surround Cambridge hate when Harvard buys up property. Watertown, in…

Am I reading this correctly? A non-profit can buy real estate property and not pay taxes on the property? Is this investment property, or property being used for university usage?

That's why churches can remain where they are, often in very desirable locations.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#173

Post by hkmurakami » Tue, Mar 22, 2016, 7:33 AM UTC

djcapelis wrote: post #143

santaclaus wrote: post #135

Earlier quoted context omitted.

> The purpose of research universities is to engage in scientific research, not to educate people. Shouldn't Yale be kicking everyone's butt here, then? Yale engineering ranks a paltry number 38, with quite a few publics far ahead of it.

Yes. Funny, that. Turns out money can't buy everything. Especially when directed at the things that don't matter.

Considering USC's rapid rise up the rankings by employing their money wisely, I would say that you can in fact "buy" engineering ranking in US News, if the institution makes it a priority.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#174

Post by ssalazar » Tue, Mar 22, 2016, 7:37 AM UTC

santaclaus wrote: post #135

Pyxl101 wrote: post #85

Earlier quoted context omitted.

> [Yale] can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? The purpose of research universities is to engage in scientific research, not to educate people . Education is one of their activities but not their primary goal. For more about this, read "The Purpose of Harvard is Not to Educate People" [1]: > But there is one misimpression that people seem to have[]: the purpos…

> The purpose of research universities is to engage in scientific research, not to educate people. Shouldn't Yale be kicking everyone's butt here, then? Yale engineering ranks a paltry number 38, with quite a few publics far ahead of it.

University research encompasses more than just engineering.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#175

Post by hkmurakami » Tue, Mar 22, 2016, 7:38 AM UTC

andr3w321 wrote: post #68

I don't really care if universities hire hedge managers to manage their endowment, but it's absurd that schools with multibillion dollar endowments still charge tuition. Yale has ~12,000 students and a $26 billion endowment. Tuition is ~$45,000 per student. $45,000 * 12,000 = $540 million. They can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? Of course this ignores finan…

Interestingly, when Trinity College @ the University of Cambridge decided to make all tuition for its students free, the remaining colleges protested that it was "unfair" that Trinity would be able to attract the best students simply because it had more money than the others (it owns the second largest port in England, among other assets). Their policy was rescinded.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#176

Post by rdancer » Tue, Mar 22, 2016, 7:41 AM UTC

kough wrote: post #125

jqgatsby wrote: post #82

Earlier quoted context omitted.

I walked out of MIT with $100K in student loans, because I had the combination of 'parents who make too much money' and 'parents who had five kids and did not adequately save for their children's education'. I'm all for soaking the rich, but how is that fair? I was apparently rich by association, and it was pretty upsetting to see kids who were ostensibly poorer than I was get a substantially easier start in life.

I'm in a similar situation right now: on paper my father's business owes him a lot of money that he "loaned" it from his salary, but in reality that money does not exist and it's not going into his pocket any time soon. Mix in two brothers with their own college costs, stir to taste. I took two gap years to work and save money; it's absurd to me that I'm paying full tuition price in this situation, but the financial…

Your family is too proud for the business to declare bankruptcy and go through Chapter 11 debt restructuring? When you're looking to pay tens of thousands in tuition, it helps to have a smart accountant, and plan a few years ahead. Is it a little unfair that people enter adulthood without a spec of financial literacy, and are immediately taken advantage of? Yes, but if a fool and his money are easily parted, the only real solution is to lessen that foolishness.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#177

Post by juliendorra » Tue, Mar 22, 2016, 7:50 AM UTC

Pyxl101 wrote: post #85

andr3w321 wrote: post #68

I don't really care if universities hire hedge managers to manage their endowment, but it's absurd that schools with multibillion dollar endowments still charge tuition. Yale has ~12,000 students and a $26 billion endowment. Tuition is ~$45,000 per student. $45,000 * 12,000 = $540 million. They can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? Of course this ignores finan…

> [Yale] can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? The purpose of research universities is to engage in scientific research, not to educate people . Education is one of their activities but not their primary goal. For more about this, read "The Purpose of Harvard is Not to Educate People" [1]: > But there is one misimpression that people seem to have[]: the purpos…

The founding principle of universities (in Paris and Bologna 5 centuries ago…) was educating students outside of the clerical teaching system in place at the time.

In Bologna it was even more striking, as it was the (foreign) students that created the university and found, paid and lead the teachers. From what I understand in Paris it was more teacher-lead.

From what I read in this thread, Harvard has not a all deviated from this when it was founded (but might have been taken over by other interests now, of course).

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#178

Post by [deleted] » Tue, Mar 22, 2016, 7:56 AM UTC

juliendorra wrote: post #177

Pyxl101 wrote: post #85

Earlier quoted context omitted.

> [Yale] can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? The purpose of research universities is to engage in scientific research, not to educate people . Education is one of their activities but not their primary goal. For more about this, read "The Purpose of Harvard is Not to Educate People" [1]: > But there is one misimpression that people seem to have[]: the purpos…

The founding principle of universities (in Paris and Bologna 5 centuries ago…) was educating students outside of the clerical teaching system in place at the time. In Bologna it was even more striking, as it was the (foreign) students that created the university and found, paid and lead the teachers. From what I understand in Paris it was more teacher-lead. From what I read in this thread, Harvard has not a all devia…

[deleted]

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#179

Post by onion2k » Tue, Mar 22, 2016, 8:30 AM UTC

jqgatsby wrote: post #82

jonknee wrote: post #70

Earlier quoted context omitted.

> I don't really care if universities hire hedge managers to manage their endowment, but it's absurd that schools with multibillion dollar endowments still charge tuition. Yale has ~12,000 students and a $26 billion endowment. Tuition is ~$45,000 per student. $45,000 * 12,000 = $540 million. They can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? It's mainly a tax on rich…

I walked out of MIT with $100K in student loans, because I had the combination of 'parents who make too much money' and 'parents who had five kids and did not adequately save for their children's education'. I'm all for soaking the rich, but how is that fair? I was apparently rich by association, and it was pretty upsetting to see kids who were ostensibly poorer than I was get a substantially easier start in life.

The difference is that you come from a background where you see people (eg your parents) earning a good income and believe that a $100k loan is something you can actually afford in the long term. Someone from a poor background whose parents have never earned a high income would very likely see $100k debt as an impossible barrier they'll never get past, and consequently would be a lot less likely to take on the risk.

If schools didn't "soak the rich" then the potential of the student from a poor background would never be realised, and humanity would be the worse for it.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#180

Post by lawnchair_larry » Tue, Mar 22, 2016, 8:36 AM UTC

spriggan3 wrote: post #65

hiddencost wrote: post #22

Earlier quoted context omitted.

Hypocrisy is such a boring & irrelevant criticism in most contexts. His critical theory is much more important than his practice. He has to survive in the world that exists, not the one he wishes existed. There's really minimal value in such a symbolic gesture as rejecting a pension, and criticizing his ideas on such irrelevant grounds takes away from actually talking about the issues raised.

> His critical theory is much more important than his practice. People should also do what they preach. And acknowledge their own bias and hypocrisy which Chomsky never does. He does like you, dismisses any criticism as "irrelevant" and that's why nobody can debate with Chomsky, there is no discussion.

https://commons.wikimedia.org/wiki/File:Graham%27s_Hierarchy...