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Subject: Re: Good Luck Getting to the Bowl on Friday

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Date Posted: 00:29:51 10/01/18 Mon
In reply to: Memphis Bill 's message, "Good Luck Getting to the Bowl on Friday" on 20:10:21 09/30/18 Sun

And all this time I thought Yale's business was developing educated persons, scholarship and research.

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[> [> Subject: Why Are Some Universities Richer Than Others?

An Observer
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Date Posted: 11:26:54 10/01/18 Mon

Uptown, your post is to the point. Obviously, the raison d'etre for great universities is developing educated persons, scholarship and research. But the way that all universities have done this for five centuries is incredibly labor intensive and thus very expensive. You can't do it unless you can raise money, from whatever source: tuition, alumni donations, government grants, investment returns.

Have you ever wondered why the richest American universities are Princeton, Yale and Harvard?

Sure, they're old, and compounding investment returns helps. But Princeton is not much older than either Columbia, Penn, Brown or Dartmouth. Yet, once you strip out their hospital endowments, Princeton has roughly as much money as the other four put together.

My sense is that Princeton, Yale and Harvard have for the past century or so had a particularly clear-eyed view about the importance of raising money and then earning high investment returns on what they've already got.

All American universities were fledgling, financially fragile organization until the dawn of the twentieth century. Basically, everybody was on fairly even ground. Since then, some universities have been run with a greater focus on money than others. Teaching and research are great, but can't be done without a certain practical approach to money.

No university is promised or guaranteed financial survival. Columbia flirted with financial disaster in the seventies. Yale was headed in the same direction until David Swensen and, to a lesser extent, Richard Levin dramatically pulled the plane out of its nosedive in the nineties.

We are currently running a 36-year bull market in *ALL* financial assets. The tide has lifted all boats. Interest rates literally have nowhere to go but up. Who knows where the weaker universities would be today if they weren't all bailed out by rising financial prices?

Money is the sine qua non. You better be able to raise it and manage it or you won't be around for the long term.

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