📖David Swensen
Review Your Investment Thesis
Regularly challenge your original investment thesis.
Regularly review whether your original reasons for owning a stock still hold. If the facts change, change your mind. Holding a broken thesis is the costliest mistake.
🏠 Everyday Analogy
📖 Core Interpretation
David Swensen frames investing as a compounding game. Time amplifies quality and discipline, while unnecessary activity often destroys long-horizon returns.
💎 Key Insight：Adapting to new facts prevents holding broken investments.
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❓ Why It Matters
Short-term noise often forces investors out before value is realized. Long-term discipline increases the odds that fundamentals, not emotions, drive outcomes.
🎯 How to Practice
Extend research and review horizon, reduce unnecessary turnover, and adjust only when intrinsic value, risk, or opportunity cost materially changes.
⚠️ Common Pitfalls
Calling it long term while never reviewing thesis
Overtrading and damaging compounding
Ignoring opportunity cost and alternatives
📚 Case Studies
1
Dot-Com Bust and Yale’s Limited Tech Exposure (2000)
During the tech bubble, Swensen avoided concentrated tech bets, emphasizing diversification across asset classes and valuation discipline.
✨ Outcome：Yale’s endowment sidestepped severe losses when the bubble burst, outperforming many tech-heavy investors over the period.
2
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.
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