October 3, 2018 in 2,344 words

The secret behind the Ivy League’s high endowment returns

ASSET CLASSES


They have some of the best minds in their universities watching their money. But in recent years, the endowments of schools in the Ivy League and its peer institutions have generated subpar returns. The fiscal year ending in June 2018 looks promising, however. MIT’s endowment earned a 13.5% return, University of Pennsylvania got 12.9%, Yale’s 12.3%, and Harvard (typically behind the others) earned 10%—net of fees. Still, this may not be as impressive as it sounds: the S&P 500 earned about 12% too.

Endowments are the savings accounts of universities, and the returns the funds generate helps pay for research, salaries, and financial aid. Ivy League endowments can be staggeringly large —Harvard’s reached $39 billion—and that money gives the institutions the financial muscle to maintain their supremacy in higher education.

Ivy League endowment strategies have changed a lot over the years. The intellectual force behind it all is David Swensen, Yale’s chief investment officer who has been working for the endowment since 1985. The men running the endowments at MIT and Penn are his proteges. Swensen tends to favor alternative investments; that is, assets not available in public markets like hedge funds and private equity.

In 1987, most of Yale’s portfolio—90%—was allocated to marketable American securities, like public stocks, bonds, and cash. Today only 10% of its endowment is invested in these kinds of assets. The rest is in hedge funds, private equity, foreign stocks, and real estate. An astounding 50% of Yale’s endowment is invested in these types of illiquid, high-fee alternative assets.

In exchange for the fees and locking up your money, these funds promise higher returns and they might. But it is hard to tell. Investing in private equity and venture capital funds means committing your money for a few years while the fund invests in private companies.


In Praise of Mediocrity

The pursuit of excellence has infiltrated and corrupted the world of leisure.

’m a little surprised by how many people tell me they have no hobbies. It may seem a small thing, but — at the risk of sounding grandiose — I see it as a sign of a civilization in decline. The idea of leisure, after all, is a hard-won achievement; it presupposes that we have overcome the exigencies of brute survival. Yet here in the United States, the wealthiest country in history, we seem to have forgotten the importance of doing things solely because we enjoy them.

Yes, I know: We are all so very busy. Between work and family and social obligations, where are we supposed to find the time?

But there’s a deeper reason, I’ve come to think, that so many people don’t have hobbies: We’re afraid of being bad at them. Or rather, we are intimidated by the expectation — itself a hallmark of our intensely public, performative age — that we must actually be skilled at what we do in our free time. Our “hobbies,” if that’s even the word for them anymore, have become too serious, too demanding, too much an occasion to become anxious about whether you are really the person you claim to be.

If you’re a jogger, it is no longer enough to cruise around the block; you’re training for the next marathon. If you’re a painter, you are no longer passing a pleasant afternoon, just you, your watercolors and your water lilies; you are trying to land a gallery show or at least garner a respectable social media following. When your identity is linked to your hobby — you’re a yogi, a surfer, a rock climber — you’d better be good at it, or else who are you?

Lost here is the gentle pursuit of a modest competence, the doing of something just because you enjoy it, not because you are good at it. Hobbies, let me remind you, are supposed to be something different from work. But alien values like “the pursuit of excellence” have crept into and corrupted what was once the realm of leisure, leaving little room for the true amateur. The population of our country now seems divided between the semipro hobbyists (some as devoted as Olympic athletes) and those who retreat into the passive, screeny leisure that is the signature of our technological moment.


5 Oddities Of Everyday Language That Leave Experts Baffled

Say the word “butter” out loud. You can whisper it if you’re in public, but I don’t know if whispering “butter” is really that much better than just saying it loud and proud. If you’re an American, there is an extremely high chance that you didn’t say the hard “t” sound in the middle, but something like a quick tap, making it sound more like “budder.” OK, so tell me why you did that.

You might say something like “It feels weird to do it the other way,” but the point is that it’s hard to explain the rules of your own language … unless you’ve studied linguistics, in which case you know that this is because of a rule called intervocalic alveolar flapping. Yes, experts explain language using mainly a series of nonsense words. But even among linguists, it’s not totally clear …

5. Why Clocks Go “Tick-Tock” And Not “Tock-Tick”


To quote 2009-era poet Ke$ha, “Tick-tock on the clock but the party don’t stop.” Now what happens if we remix that a bit and say “Tock-tick on the clock but the party don’t stop?” It just sounds stupid.

It’s the same if someone insists that horses go clop-clip, doorbells go dong-ding, Parrotheads wear flop-flips, ’90s-era child rappers called themselves Kross Kriss, or that the hirsute beast felled by beauty (or Jack Black) went by Kong King. To make those sound singularly unpleasant, all we had to do was switch the normal order of high vowel / low vowel so that the low vowel came first (named because of where you put your tongue in your mouth to make those sounds — try it). That switch drives most English speakers up the wall, but here’s the thing: No one knows why.

There is no rule for why high vowels generally sound better coming first in the case of ablaut reduplication, which is the official name for things like hip-hop and flip-flop. Sure, you can say it simply sounds weird the other way, but why? It’s a bad linguist who’s satisfied with “Well, that’s just how it do.”

A popular explanation is the Optimality Theory, which is sort of a catchall for inexplicable linguistic phenomena. To paraphrase, it says that speakers do the shit they do because it’s the laziest (“most optimal” means “least amount of effort”) way to do it. You have to work fractionally less to say tick-tock or clip-clop than you do to say tock-tick or clop-clip. So we just evolved an affinity for the sound of the laziest way to do things.

But then there’s another theory which says that words that represent things that are spatially nearer to the speaker usually have higher vowels (me versus you, here versus there, this versus that). This sounds pretty dumb until you learn that it actually holds water across different languages. For example, in French, “me” is je, “you” is tu, “this” is ce, and “that” is ca. In German ich/du, hier/da, dies/das. You get the idea, which is good, because we’ve exhausted my remedial knowledge of non-English languages. Now if you combine that fun party trick with the fact that English is read left to right, it sort of tracks that we would prefer to read a “near-sounding” word before a “far-sounding” word.

If that sounds like an extremely slipshod attempt at an explanation, welcome to the wacky world of social sciences, baby.


Night terrors: what do anxiety dreams mean?

These are anxious times – but how does this affect our sleep, and what can we learn from the exam crises and missed trains that haunt the small hours.

Antonio Zadra, a psychologist, is sharing a memory of a horrific experience at sea. He had almost made it to shore, but knew he was about to die. In fact, these were his final 20 seconds of life. Just then, his eight-year-old son appeared at the water’s edge. He looked at Zadra, and Zadra heard the words: “Dad, no!” Two years later, remembering the fear and horror of the moment makes him well up. “I was thinking: ‘I am about to die and I am going to die in front of my eight-year-old son.” He recalls the vivid depth in his son’s eyes, the completeness with which he was able to look into them. And then, of course, he woke up and everything was OK, but not OK. The first thing he did in the morning was hug his son.

Zadra says this is his worst anxiety dream; one that still has the power to take his breath away. And, having read more than 10,000 dream reports for his work at the Center for Advanced Research in Sleep Medicine at the University of Montreal, he knows that his dream contains one of the most common motifs of anxiety dreams: that of our own imminent death (others include chase and pursuit, and loss of control). But this knowledge did nothing to ameliorate the shock and anguish of the moment. Technically, the only thing that stops this dream from being classified as a nightmare is the fact that it didn’t wake him up.

It is not surprising that anxiety seeps into our sleep. We live in anxious times. According to the World Health Organization (WHO), depression and anxiety disorders cost the global economy $1tn a year, with a 50% increase in the number of people with depression or anxiety between 1990 and 2013. In the US, general anxiety disorder affects 6.8 million adults and sales of books on anxiety are up 25% year on year at Barnes & Noble. In the UK, the Office for National Statistics’ national wellbeing survey last month showed that 17.8% of the population reported “some evidence indicating depression or anxiety”. So does the rise in our awareness and reporting of anxiety make us more likely to have anxious dreams? And do anxiety dreams – even the worst ones such as Zadra’s – bring any lasting benefit?

In fact, most dreams contain elements of anxiety. About one-third of all dream reports in Calvin Hall and Robert Van de Castle’s seminal 1966 work, The Content Analysis of Dreams, contain “misfortunes” of some kind. According to G William Domhoff, a sociologist and psychologist who worked with Hall, and who later analysed the dream reports, 80% of men’s dreams and 77% of women’s dreams feature at least one of the “negative elements” of sadness, anger, confusion and apprehension. “On the other hand, only 53% of dreams for men and women have at least one of several positive elements, such as friendly interactions, good fortune, success and happiness,” he adds.


Video Goodnesses
and not-so-goodnesses

A bar fight in Brett Kavanaugh’s past brings his honesty under oath into question, and Michael Kosta wonders why sober Kavanaugh is being held accountable for drunk Kavanaugh’s actions.

THANKS to Comedy Central and The Daily Show with Trevor Noah for making this program available on YouTube.


In yet another example of Brett Kavanaugh’s level-headed judicial demeanor, we’re now learning about a bar fight he had with a UB40 band member look-alike in the ’80s.

THANKS to CBS and The Late Show with Stephen Colbert for making this program available on YouTube.


Seth takes a break from breaking news to check in on Trump administration official Stephen Miller quietly implementing immigration policies that could change the very fabric of American society

THANKS to NBC and Late Night with Seth Meyers for making this program available on YouTube.


CAUTION: Some language may not be appropriate for work or children.

Here’s me commentary and analysis on Khabib before his fight with Conor McGregor this weekend.


保冷バッグに入るまる。Maru gets into the cooler bag.


FINALLY . . .

The Century-Long Scientific Journey of the Affordable Grocery Store Orchid

Orchids were once considered the world’s most difficult and exotic flowers. So why can you buy one for $12.99 at Trader Joe’s?


Orchids grow at the Color Point wholesale greenhouse in Granville, Illinois.

Wholesale orders go out today at Waldor Orchids, and the front room is filled with daubs of pink, purple, and orange, sweeps of peach, yellow splotches splattered with blood-red droplets, palettes of lavender fading into white. “This order here is a real basic order,” says Dave Off, picking a scrawled slip off the wall. Here in the greenhouses his grandfather built by the bay in Linwood, New Jersey, there are plants that have been alive for more than 100 years and plants that were born 18 months before in test tubes in Florida. That “basic order” means two large pots, with four phalaenopsis orchid plants apiece, two facing forward and two doubles—each with a pair of flower-bearing, stem-like spikes—turned towards the side.

When they’re in bloom, phalaenopsis spikes (or inflorescences, as they’re also known) curve gently under the weight of an elegant row of flowers. If plants were puppies, phalaenopsis orchids would be labrador retrievers—easy-going, pretty enough, and immensely popular. Off sells more white phals than he does any other flower. They’re so easy to reproduce, with each almost an exact copy of the next, that customers buy them online as if they are toothbrushes or T-shirts or any other factory-made item, and expect them to show up looking exactly like the picture.

For many years, orchids were considered a luxury—the exclusive domain of obsessed collectors who could coddle them in expensive hothouses. But today anyone can walk into Trader Joe’s or Home Depot and buy one for $12.99 or less. Orchids now populate the counters of cheap nail salons, the tables of tasteful living rooms, and tony hotel lobbies around the world. They might make a classy-ish and inexpensive housewarming present or hostess gift. All the way back in 1850, an orchid columnist for a gardening magazine imagined that one day the price of the flowers would be “within the reach of all.” That promise came true. It just took a little longer than the orchid lovers of the 19th century expected.


Ed. More tomorrow? Probably. Possibly. Maybe. Not?