Charting Stocks

Harvard and Yale endowments are known for their stellar long term performance, though even the “smartest guys in the room” are not immune to this collapse.

Harvard endowment recently reported a 22% drop in the funds value from a year ago. The 22% drop does not include the drop in assets which are managed by external managers. Those numbers have not come in yet and they are expected to add to the decline. 22% may be a conservative estimate.

In their defense, a 20-30% drop relative to the 40%+ decline in stocks is, in comparison, not so bad. Though I’ve yet to see an accounting measure that takes relative performance into account.

Future Forecast is Telling
In their letter, President Drew Faust and Executive Vice President Edward Forst informed the deans of the losses. They go on to say that the university should expect to see a further loss of 30% by next June 30th. In other words, they expect the future prices of assets classes to decline more in 2009 than they have in 2008.

Related posts:

1. Oversold US Dollar threatens stock, commodity, bond prices
2. Hartford CEO to Step Down Amid Heavy Losses