#1
Management Evaluation
"Evaluate management by their actions, not their words. Look for a track record of capital allocation, shareholder communication, and aligned incentives."
Judge management by actions, not words.
Read Full Analysis →
David Swensen📌 Business Judgment
David Swensen's Business Judgment Rules
David Frederick Swensen (January 26, 1954 – May 5, 2021) was an American investor and the chief investment officer at Yale University from 1985 until his death. He transformed Yale's endowment from $1 billion to over $31 billion, achieving an average annual return of 13.7% over his tenure. Swensen pioneered the "Yale Model" of institutional investing, which emphasizes diversification across...
3 principles·Business Judgment
3 Key Business Judgment Principles
#2
Industry Structure Analysis
"Understand the industry structure before evaluating any company. Industry economics often matter more than company-specific factors in determining returns."
Industry structure shapes investment outcomes.
Read Full Analysis →#3
Capital Allocation Assessment
"The most important skill for a CEO is capital allocation. Evaluate how management deploys capital — do they create or destroy value with their decisions?"
Evaluate management's capital allocation skills.
Read Full Analysis →Frequently Asked Questions
What are David Swensen's key business judgment principles?
David Swensen has 3 key principles on business judgment. The most important one is "Management Evaluation" — Evaluate management by their actions, not their words.
How does David Swensen apply business judgment in practice?
David Swensen applies business judgment through several key principles including "Management Evaluation" and "Industry Structure Analysis". These principles guide practical investment decisions and have been tested across decades of market cycles.
What makes David Swensen's approach to business judgment unique?
David Swensen's approach to business judgment is distinguished by a focus on long-term thinking and fundamental analysis. With 3 specific principles in this area, David Swensen provides a comprehensive framework that investors at any level can study and apply to improve their decision-making.
