📖David Swensen
Deep Understanding Required
Develop deep expertise, not surface knowledge.
Surface-level knowledge is dangerous in investing. Develop deep expertise in your areas of focus. True understanding means knowing what could go wrong.
🏠 Everyday Analogy
📖 Core Interpretation
David Swensen advocates a repeatable process: define criteria, execute consistently, and review decisions against evidence. Process quality drives outcome consistency.
💎 Key Insight：True understanding includes knowing what can go wrong.
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❓ Why It Matters
Without process, there is no reliable feedback loop. Structured execution and review improve decision quality over time.
🎯 How to Practice
Run a decision loop of research, thesis, execution, and post-mortem; document assumptions and update playbooks with evidence, not hindsight bias.
⚠️ Common Pitfalls
Having opinions without execution criteria
Reviewing outcomes but not decisions
Abandoning rules during volatility spikes
📚 Case Studies
1
Dot-Com Bubble Peak (2000)
Swensen’s Yale endowment policy rebalanced away from soaring U.S. growth stocks into underweighted bonds, real assets, and diversifiers as tech valuations became extreme.
✨ Outcome：Reduced drawdowns in 2000–2002 bear market and preserved capital to buy equities at cheaper prices.
2
Global Financial Crisis (2008)
As equities and illiquid assets plunged, Swensen’s disciplined rebalancing shifted funds from Treasuries and bonds back into depressed equities and alternative assets despite market panic.
✨ Outcome：Positioned the endowment for strong post-2009 recovery, outperforming many peers that de-risked near the bottom.
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