📖David Swensen
Research Before Buying
Thorough research precedes every sound investment.
Never invest in anything you don't fully understand. Thorough research is the foundation of every sound investment decision.
🏠 Everyday Analogy
📖 Core Interpretation
David Swensen emphasizes durable business quality over short-term noise. A strong model, real competitive edge, and disciplined capital allocation matter more than quarterly excitement.
💎 Key Insight：Understanding prevents costly surprises.
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❓ Why It Matters
Without business-quality filters, investors drift toward stories rather than economics. Durable cash generation is what supports long-term valuation.
🎯 How to Practice
Use a checklist covering moat, management, unit economics, and capital allocation; track long-term cash generation instead of quarter-to-quarter noise.
⚠️ Common Pitfalls
Buying narratives instead of cash-generating economics
Overreacting to short-term operating noise
Ignoring management quality and capital allocation
📚 Case Studies
1
Yale’s Early Private Equity Push (2000)
Following Swensen’s allocation philosophy, Yale expanded into venture capital and private equity during the tech bubble era, emphasizing manager selection and long-term horizons over market timing.
✨ Outcome：Despite the dot‑com crash, Yale’s private equity portfolio delivered strong long‑term returns, validating alternative allocations.
2
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.
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