📖David Swensen
Management Evaluation
Judge management by actions, not words.
Evaluate management by their actions, not their words. Look for a track record of capital allocation, shareholder communication, and aligned incentives.
🏠 Everyday Analogy
📖 Core Interpretation
In Management Evaluation, David Swensen focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Track record reveals true management quality.
AI Deep Analysis
Get personalized insights and practical guidance through AI conversation
❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
Endowment Through the Global Financial Crisis (2008)
The Yale model, heavy in illiquid alternatives like private equity, real assets, and hedge funds, faced severe short‑term stress as markets and liquidity conditions collapsed.
✨ Outcome：Although the endowment declined sharply in 2009, alternatives recovered strongly over subsequent years, outperforming traditional 60/40 portfolios.
2
Yale Endowment Tech Bubble Avoidance (2000)
Swensen’s disciplined manager selection led Yale to avoid many momentum-driven tech managers during the dot-com bubble.
✨ Outcome：When the bubble burst, Yale’s portfolio declined far less than peers, reinforcing the value of careful manager vetting and long-term discipline.
See how masters handle real scenarios?
30 real investment dilemmas answered by legendary investors
Explore Scenarios →