David Swensen, Yale's Chief Investment Officer and manager of the University's endowment, discusses the tactics and tools that Yale and other endowments use to create long-term, positive investment returns. He emphasizes the importance of asset allocation and diversification and the limited effects of market timing and security selection. Also, the extraordinary returns of hedge funds, one of the more recent phenomena of portfolio management, should be looked at closely, with an eye for survivorship and back-fill biases.
00:00 - Chapter 1. Introduction: Changing Institutional Portfolio Management 03:59 - Chapter 2. Asset Allocation: The Power of Diversification 16:44 - Chapter 3. Balancing the Equity Bias into Sensible Diversification 20:48 - Chapter 4. The Emotional Pitfalls of Market Timing 32:58 - Chapter 5. Survivorship and Backfill Biases in Security Selection 43:17 - Chapter 6. Finding Value Investing Opportunities as an Active Manager 49:02 - Chapter 7. Yale's Portfolio and Results 54:48 - Chapter 8. Questions on New Investments, Remaining Bullish, and Time Horizons