The Mind Money Spectrum Podcast

#84. Is the Yale Model dead?

July 20, 2021 Aaron Agte and Trishul Patel Season 2 Episode 32
The Mind Money Spectrum Podcast
#84. Is the Yale Model dead?
Chapters
The Mind Money Spectrum Podcast
#84. Is the Yale Model dead?
Jul 20, 2021 Season 2 Episode 32
Aaron Agte and Trishul Patel

Even if the Yale Model works for endowments, you probably shouldn't follow it.

In this episode, Aaron and Trishul discuss the Yale Model. With indefinite investment horizons, endowments typically gravitate towards illiquid investments, such as hedge funds, private equity, and venture capital. Trend following aims to take advantage of human irrationality. Long-short allows you to adjust and perhaps stamp out market risk. M&A takes advantage of price jumps when companies get bought out. Venture capital understands that most bets will lose money because the winners will make up for the rest. Unfortunately, smaller investors end up paying 3-4% a year in combined fees. Even so, the returns are worth it, right?

Episode References

David Swensen
Why You Should Still Invest Like Yale
Private Equity
Value and Momentum Everywhere
Hedge Fund Fees
Funds of Funds
Do Funds-of-Funds Deserve Their Fees-on-Fees?

Podcast Description

Welcome to The Mind Money Spectrum Podcast where your hosts Aaron Agte and Trishul Patel go beyond traditional finance questions to help you explore how to use your money to achieve the freedom you want in life. Aaron is a Financial Planner from the Bay Area, and Trishul is a Wealth Manager on the East Coast. For more information about Aaron, check out GraystoneAdvisor.com. And for more information on Trishul check out InvestingForever.com. We thank you all for listening, and stay tuned for our latest episode on our website, MindMoneySpectrum.com.

Show Notes

Even if the Yale Model works for endowments, you probably shouldn't follow it.

In this episode, Aaron and Trishul discuss the Yale Model. With indefinite investment horizons, endowments typically gravitate towards illiquid investments, such as hedge funds, private equity, and venture capital. Trend following aims to take advantage of human irrationality. Long-short allows you to adjust and perhaps stamp out market risk. M&A takes advantage of price jumps when companies get bought out. Venture capital understands that most bets will lose money because the winners will make up for the rest. Unfortunately, smaller investors end up paying 3-4% a year in combined fees. Even so, the returns are worth it, right?

Episode References

David Swensen
Why You Should Still Invest Like Yale
Private Equity
Value and Momentum Everywhere
Hedge Fund Fees
Funds of Funds
Do Funds-of-Funds Deserve Their Fees-on-Fees?

Podcast Description

Welcome to The Mind Money Spectrum Podcast where your hosts Aaron Agte and Trishul Patel go beyond traditional finance questions to help you explore how to use your money to achieve the freedom you want in life. Aaron is a Financial Planner from the Bay Area, and Trishul is a Wealth Manager on the East Coast. For more information about Aaron, check out GraystoneAdvisor.com. And for more information on Trishul check out InvestingForever.com. We thank you all for listening, and stay tuned for our latest episode on our website, MindMoneySpectrum.com.