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Wednesday, October 28, 2009

Some Interesting Thoughts On Yale's Investment Strategy and The Markets of the Future From Someone On The Inside

Courtesy of the folks from ishares I attended a presentation that included a lunch talk by Fareed Zakharia of Newsweek and CNN. I have heard many speakers at occasions of this type and never have I heard anything close in terms of clarity intelligence and content.

The theme was the growth of the developing (emerging market world)While he certainly is not an investment strategist, he was asked by a questioner what investing strategy he would recommend. To my surprise he didnt bow out of answering the question.

He mentioned that he is on the board of the Yale Endowment and certainly thinks their strategy over the last 15 years was well chosen and phenomenally successful. He also said that the strategy benefitted tremendously from access to cheap borrowing something which will not continue.

Noting that he agreed with Swensen that asset allocation is 90% of the game in investing. US investors have too much of a home country bias in his views and those that raise their allocation to emerging markets will outperform achieve superior returns. The specific investments are less importance than making this allocation choicenot

Unfortunately for the hosts, he did not specifically implementing this approach using ishares etfs :-)

Typical of his interesting data with regard to developing markets: auto sales in India rose 25% year on year in 2008.

Obviously I think all this is advice that merits great consideration.

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