Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

thenation.com

Post reply on HN
Print view View original

191–200 of 267 posts

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

#191

Post by lr4444lr »

hackuser wrote: post #29
lr4444lr wrote: post #12

Sidenote, and I may get down-voted heavily for saying this, because he's got plenty of "cred" on so many different fronts, but Noam Chomsky always struck me as a hypocrite when it came to his economic and political thinking for taking a pension supported by the $13 billion MIT endowment, which is surely generating money through many of the practices disparaged both in this article and Chomsky's own beliefs.

It's a useful point that Chomsky benefits from the same system, but, 1) Generally everyone is part of the system they criticize. The other choice is to go off the grid, in which case you would never hear their opinions. What was the last thing you read by one of those non-hypocritical people? 2) For that and many other reasons, including that we all are fallible humans, everyone is a hypocrite including you and inclu…

But you and I are not taking speaker fees, book royalties, or garnering fame and awards, i.e. directly profiting by the _appearance_ of being against these things, but not leading in any substantive way that befits someone we might reasonably say is an influencer and a leader. Has he even solicited for a formal letter of protest to the university? What about a refusal to appear? If we apply the "well, my sacrifice won't hurt anyone but me" logic to everyone, a billion tiny pursuers of self-interest will continue to keep the system propped up. Is it any consolation that the CEO of BP is an environmentalist in his personal beliefs but acceptable that he followed his stock option incentives to keep costs down by cutting corners on quality checks that cost 11 lives and massive pollution in the gulf of Mexico? I'm not saying it's not an understandable and unfortunate reality that our personal benefit might run counter to our ideals, but that it's less than honest of someone to profit from that stasis on the assumed grounds of having superior insight and moral standing. If there's too much good to be gained from the current system for anyone to give it up, then it might not be all that bad and much more nuanced, if we're going to be honest with ourselves, whereas the vilification is actually counterproductive, as it keeps us from a fuller understanding and movement toward a solution.

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

#193

Post by twoodfin »

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.

You don't think an MIT education is worth $100K?

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

#194

Post by rottyguy »

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…

I believe Columbia is the 2nd largest land owner in NYC. The first is the Catholic Church.

http://nymag.com/listings/attraction/columbia-university/

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

#195

Post by chrisan »

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.

Technically you walked in to MIT knowing you would have $100K of debt and weighed the pros and cons and decided in the end that, yes $100K for a MIT education was worth it.

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

#196

Post by cmdrfred »

dangrossman wrote: post #128
jimbokun wrote: post #121

Earlier quoted context omitted.

"I think I should get the full Affordable Care Act subsidy regardless of my income" I appreciate your sentiment, but you realize all of the insurance companies will just raise their rates by the amount of the subsidy, right? More demand in the form of government money earmarked for a specific good, with the same supply of the good, means higher prices.

> you realize... right? Gosh, I really dislike that turn of phrase. Anyway, they can't do that, since the ACA has mandated that insurers spend at least 80 or 85% of premiums on health care costs since 2012. The insurers ride that line as closely as possible, since their profit has to come out of the 15% allowed margin. This means an increase in total premiums without a commensurate increase in the cost of claims cann…

Remember profit is a funny thing. If I own a company and I net after taxes 100 million a year and then pay myself 75 million in compensation I can claim that my company only makes 25 million a year.

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

#197

Post by pessimizer »

beeboop wrote: post #54
SilasX wrote: post #51

Earlier quoted context omitted.

Is that investment gain net of the fund manager payment? Because an S&P 500 index fund would have returned 13.5% that year[1], or ~$3.5 billion, about the same as $4 billion minus the half-billion hedge fund managers costs. And presumably they had to pay other investment managers (for non-hedge investments), and the money in HFs is significantly less liquid and accessible and more volatile. [1] http://performance.mor…

This is ignoring a lot that goes into investment management. It's easy to say S&P would have done just as well on that particular year, but what about every other year? What about years with big losses? Additionally, investment managers do things like create portfolios for you that match your risk tolerance or other special needs/requirements. Overall, it's true that managed investments don't do as well as index fund…

> It's easy to say S&P would have done just as well on that particular year, but what about every other year? What about years with big losses?

Then the $4 billion in a good year is completely irrelevant. It's easy to say that investment managers would have done well in years where a chicken wasn't likely to do just as well.

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

#198

Post by fovc »

amluto wrote: post #103
whack wrote: post #99

Earlier quoted context omitted.

It's possible that you're one of the unlucky people who falls into the combination you described above. Unfortunately, even the best system currently available will often have cracks, and you seem to have found the one that currently exists. The vast majority of the time, kids with rich parents have a substantially blessed childhood & family-support, which justifies them having to pay substantially more in tuition fe…

I tend to dislike systems of the form "if you make/own less than $X, you get $Y benefit". It often leads to nasty non-monotonic outcomes and like this. For actual public benefits, I'd much prefer to give all the benefits to all the people and raise taxes accordingly. This means that, as a CA resident, I think I should be permitted to deduct rent even if my AGI is $38,259, and I think I should get the full Affordable…

There was an article recently where Finland was considering something along those lines. [1] is all I was able to find quickly:

> The Finnish government, elected earlier this year, is planning to introduce a tax-free monthly payment of 800 euros ($865) to all adult Finns, regardless of income, wealth or employment status. The payment would replace most other state benefits.

[1] http://money.cnn.com/2015/12/07/news/economy/finland-basic-i...

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

#199

Post by Lawtonfogle »

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.

>but how is that fair?

Having no monetary help from a family making 100K a year is still different from having no monetary help from a family making 20K. If we want fair, how is growing up in a family with poor parents fair compared to growing up in a family with rich parents? While you might be able to blame the parent for their own financial situation, you cannot blame the child.

>it was pretty upsetting to see kids who were ostensibly poorer than I was get a substantially easier start in life.

Considering that they already had an ~18 year start of life where they likely weren't having it easier...

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

#200

Post by rbcgerard »

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…

Tuition is a red herring - it's a made up number. A better metric would be what is the school's operating budget? In Yale's case it's $3.2 billion...I'm not saying free tuition isn't an option for a couple of schools with mega endowments, but you're analysis misses the mark.

http://finance.yale.edu/sites/default/files/2014-2015%20Annu...

Post reply on HN