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Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

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

#211

Post by mathattack »

inthewoods wrote: post #126
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…

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…

Real Estate is a good investment for university endowments for a few reasons:

1 - They can hold onto it for a very long time. (Real Estate is best seen as a very long term investment)

2 - It can generate rental revenue in tough times, when their financial needs are higher.

3 - It's an asset tied to one of their future liabilities. Growing universities need to buy land, so investing in land effectively hedges some of that risk.

Now your point of their being non-profit - that's much bigger. I think most universities (and sport leagues, and many others) could be considered for-profit based on much of their behavior.

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

#212

Post by [deleted] »

venomsnake wrote: post #169
jimbokun wrote: post #116

Earlier quoted context omitted.

This is the economic issue in the U.S. right now, and the only candidate who seems to even acknowledge it is Bernie. It's a difficult issue for Hillary, whose husband oversaw implementation of some of the policies that created this environment. And all of the Republican voters seem to be more afraid of brown people possibly getting money from the government, than about whether or not they can get sick or go to school…

The Trump supporters are driven by the same things that Bernie ones are. Anger at economic insecurity. The racism is mostly a side dish. If we have a great compression, growth and redistribution like in the 50s/60s expect racial/immigration tensions to decrease a lot.

[deleted]

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

#213

Post by cinquemb »

venomsnake wrote: post #169
jimbokun wrote: post #116

Earlier quoted context omitted.

This is the economic issue in the U.S. right now, and the only candidate who seems to even acknowledge it is Bernie. It's a difficult issue for Hillary, whose husband oversaw implementation of some of the policies that created this environment. And all of the Republican voters seem to be more afraid of brown people possibly getting money from the government, than about whether or not they can get sick or go to school…

The Trump supporters are driven by the same things that Bernie ones are. Anger at economic insecurity. The racism is mostly a side dish. If we have a great compression, growth and redistribution like in the 50s/60s expect racial/immigration tensions to decrease a lot.

>If we have a great compression, growth and redistribution like in the 50s/60s expect racial/immigration tensions to decrease a lot.

I wonder what led to such environment then, can't be because of anything that happened in the 30s/40s…

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

#214

Post by kough »

rdancer wrote: post #176
kough wrote: post #125

Earlier quoted context omitted.

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…

Wow, fantastic advice -- if only we weren't so financially illiterate, proud, and foolish to boot!

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

#215

Post by venomsnake »

cinquemb wrote: post #213
venomsnake wrote: post #169

Earlier quoted context omitted.

The Trump supporters are driven by the same things that Bernie ones are. Anger at economic insecurity. The racism is mostly a side dish. If we have a great compression, growth and redistribution like in the 50s/60s expect racial/immigration tensions to decrease a lot.

> If we have a great compression, growth and redistribution like in the 50s/60s expect racial/immigration tensions to decrease a lot. I wonder what led to such environment then, can't be because of anything that happened in the 30s/40s…

Is that sarcastic? You had great destruction of capital in WWII, there was severe labor shortage and you had the GI bill. And you had the whole world to be rebuilt.

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

#216

Post by Grishnakh »

dangrossman wrote: post #142
Grishnakh wrote: post #140

Earlier quoted context omitted.

The whole law is terrible and it should be repealed and replaced with a nationalized system. As long as you have the insurance companies acting as middlemen, it's in their best interest to deny care as much as possible, to increase their profit. What actual good do they do? None, they just come between the patient and the caregiver.

> it's in their best interest to deny care as much as possible, to increase their profit That's not the case, as the comment you replied to points out. Let's say an insurer collects $1B in premiums some year. The ACA mandates that at least 85% of that is spent on healthcare costs. At most, the company gets to keep $150M, or 15% of the premiums. For every claim denied bringing the payouts below $850M, the number they…

For your point 1, that's just splitting hairs. It's in the insurer's interest to increase profits, rather than to provide care. So you just pointed out a way they found of increasing profits, which results in both ballooned healthcare costs and increased premiums all around. This isn't helping me get high-quality healthcare at affordable prices.

For your point 2, you protect people from catastrophic losses by having a single payer: the government. Insurance is supposed to be a way of protecting people from catastrophic losses, which is why we have it for house fires, car accidents/thefts, etc. Healthcare is not about catastrophic losses in most cases, it's about ongoing care to maintain health. You getting your yearly checkup at the doctor is not a "catastrophic loss", nor is you getting an ultrasoound to check out something the doctor found to make sure it isn't something really bad. These are just ongoing care, and it isn't what insurance is designed to handle fundamentally.

As for $200/month, I wish. More like $800/month.

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

#217

Post by ameen »

Grishnakh wrote: post #139
jimbokun wrote: post #116

Earlier quoted context omitted.

This is the economic issue in the U.S. right now, and the only candidate who seems to even acknowledge it is Bernie. It's a difficult issue for Hillary, whose husband oversaw implementation of some of the policies that created this environment. And all of the Republican voters seem to be more afraid of brown people possibly getting money from the government, than about whether or not they can get sick or go to school…

The Republicans aren't as bad as you think. Trump has said (vague) things about providing health care for everyone. He's said a lot of things that are a big departure from standard Republican ideology, which is why a bunch of Republicans are calling him "not a real Republican" and the party as a whole is having a major shit-fit about him possibly getting the nomination. The guy isn't really a right-winger, he's a cen…

Bernie seems like the only sane person on there. Hillary is the worst of them, and I say this as a Muslim. Trump might hate me, but at least it's irrational unlike Hillary who is a first-class warmonger and only exists to sell multi-billion dollar weapons.

The world could do a lot more with lesser wars, no unwanted migration, and no terrorism. The vicious cycle of violence killing innocents and following hate attacks are unbearable. I can't take it any more, I don't think anyone can.

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

#218

Post by Mechkov »

DavidHm wrote: post #171
beeboop wrote: post #77

Earlier quoted context omitted.

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.

They don't outperform them in terms of returns, but when it comes to risk-adjusted performance they do much better than index funds.

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

#219

Post by comicjk »

rayiner wrote: post #72
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's financial aid is extremely generous. It's free for HHI below $65k per year. It's $12,500 per year up to $150k. It's half-price up to $200k. I'd argue it's better for families making more than $200k/year to be paying in than to give them free tuition.

The trouble is, not many families with HHI below $65k know that Harvard, Yale, etc are free for them. Instead they see the enormous sticker price and they hear on the news constantly that college is expensive. The guidance counselors who know enough to tell them are mostly at richer schools. If a news story went out tomorrow saying "Harvard is free," Harvard would get a lot more applicants from the <65k bracket. I agree that it would be better to be free for the poor and expensive for the rich, but right now that free tuition policy is nestled under a billboard saying "$45,000/year."

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

#220

Post by JoeAltmaier »

comicjk wrote: post #219
rayiner wrote: post #72

Earlier quoted context omitted.

Yale's financial aid is extremely generous. It's free for HHI below $65k per year. It's $12,500 per year up to $150k. It's half-price up to $200k. I'd argue it's better for families making more than $200k/year to be paying in than to give them free tuition.

The trouble is, not many families with HHI below $65k know that Harvard, Yale, etc are free for them. Instead they see the enormous sticker price and they hear on the news constantly that college is expensive. The guidance counselors who know enough to tell them are mostly at richer schools. If a news story went out tomorrow saying "Harvard is free," Harvard would get a lot more applicants from the <65k bracket. I ag…

That's what High School counselors are for?
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