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Did Yale lose $57 Billion in three months?

November 17, 2009

The Yale University endowment is valued at “only” $17 Billion, yet their March and June, 2009 SEC 13F Filing reported total stock investments of $62.7 Billion.

Rocky yelled “Boola-Boola” and rubbed his eyes. The obscene leverage shocked him, as did Yale’s September filing which reported investments of “only” $5.2 Billion.

How was this possible? Was this some sort of novel high-frequency trading strategy engineered by David Swensen in the Yale Investment Office? Or had a Harvard student hacked into Yale’s computer system (again)?

Alas, no — Yale’s Associate General Counsel issued a press release stating that there was a “defect” in their reporting program — which caused the March and June SEC filings to be wrong by a factor of 1,000!

Rocky wonders:

1) What would happen if the decimal points on his 2009 Tax Return “accidentally” move three places to the left? Would the IRS notice?

2) What would happen on a Yale economics final exam if a student’s answer is wrong by a factor of 1,000?

Here are the SEC filings for the green-eyeshade crowd:

Yale930
Yale530

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  1. ld
    November 17, 2009 at 10:00 pm

    Rocky: Are you starting to notice more widespread incompetence than before? I am noticing this along with higher volume of e-mail. It bugs me that the large private universities answer to no one (since the sources of major funds are usually bequests).

  2. masteroftheuniverse
    November 17, 2009 at 11:26 pm

    I guess my son was very wise in bailing Yale…..Funny thing that they still send those damn envelopes looking for cash. Think they would cover my wheat spread?

    Hopefully my blog will be up and running tomorrow.

    I will be in NYC on Thursday and wish you would send me a PM with your number which I lost when my phone was stolen in……NYC.

  3. November 18, 2009 at 8:00 am

    LD: Rocky has noticed an increase in diagnosed cases of Peanut Allergy; whether that is a leading or coincident indicator of WIS (widespread incompetence syndrome) is a subject worthy of further investigation.

    More seriously, Rocky questions the tax exemption that universities enjoy — as many activities pursued by these organizations are essentially commercial. As the tax burden rises on the rest of society, the blanket University tax exemption is an anachronism which can no longer be justified, and may also be contributing to “ivory tower” political advocacy. As Margaret Thatcher said, “The problem with socialism is that you eventually run out of other people’s money.”

    Jeff: Yale may be sloppy at keeping their financial records straight. But at Cambridge, they say, “Blarney – who needs money? Let’s go down to the pub and throw back a few pints.”

  4. November 18, 2009 at 7:27 pm

    Universities and taxes…does Fakename ever have a story for you, about Tulane. (Pronounced TWO-lane, not Tu-LANE). Future blog, perhaps. For gall (Yale sending requests for donations) nothing beats my State Farm insurance agent, who cancelled me, then sent me a Christmas card. And what the heck is up with your blog, Jeff. I know you said you were hacked, but how is that possible? I’m highly annoyed because I haven’t been able to listen to Winwood and Clapton.

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