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Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment

David F. Swensen,

Charles D. Ellis (Foreword by)

4.17 · Rating details · 887 ratings · 33 reviews

In his 14 years as Yale's chief investment officer, David Swensen has propelled the university's investment portfolio into the top one per cent of institutional funds. Here, he articulates his philosophy and strategies of portfolio management. ...more

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Hardcover, 366 pages

Published May 22nd 2000 by Free Press (first published May 15th 2000)

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Feb 16, 2016 Jeff Garrison rated it really liked it · review of another edition

Favorite quote from the book: â€œ[S]uccssful investment cultures encourage professionals to find new mistakes to make, instead of simply repeating old errors.â€ (page 304)

Originally published in 2000, Swensen updated his classic work on institutional investments early this year. Swensenâ€™s writing is very systematic, which can be expected from the Chief Investment Officer for Yale University. He begins by exploring the reasons for endowments and the necessity of an appropriate polices for spend Favorite quote from the book: â€œ[S]uccssful investment cultures encourage professionals to find new mistakes to make, instead of simply repeating old errors.â€ (page 304)

Originally published in 2000, Swensen updated his classic work on institutional investments early this year. Swensenâ€™s writing is very systematic, which can be expected from the Chief Investment Officer for Yale University. He begins by exploring the reasons for endowments and the necessity of an appropriate polices for spending and investments. After establishing a base level of understanding in these areas, he delves into a detailed outline of asset allocation and asset classes. Much of this material (especially his work on equity and bond investments) is also covered in his book, Unconventional Success: A Fundamental Approach to Personal Investing, which I reviewed last year. However, there are numerous differences between the goals and the approaches of an individual and of institutional investors. Non-profit institutional investors, for whom the book is written, donâ€™t have to work about the tax consequences in the same way an individual investor must consider them. Another major difference is the expanded number of assets available to institutional investors. Such institutions have a longer time horizons, the available resources for managing such investments and large amounts which allows them to expand into new categories which include more illiquid investments. By moving into alternative investments, an institution can hedge their investments. Swensen goes into such investments, which make up a significant portion of Yaleâ€™s portfolio. These investments include natural resources such as oil, gas and timber, commercial real estate, private equity, venture capital and investment buyouts pools.

Instead of providing a â€œhow-toâ€ manual, Swensen focuses on investment philosophy. The institutionâ€™s investment policy is a tool to maintain an appropriate risk level for investments, by spreading investments around to hedge from a massive loss in one particular sector or class. Institutions need to have a policy that outlines assets allocations and then the discipline to do regular rebalancing of the portfolio to maintain allocation targets. As one investment rises in price and begins to claim a larger percentage of the investment, Swensen advice is to sell and reap profits, while reinvesting in those areas in which the portfolio is down. Such â€œcontrarian thinkingâ€, according to Swensen, is the best way to â€œbuy low and sell high.â€ Swensen tells the story of insisting on a firm hand at Yale in the aftermath of the 1987 crash. After the stock market had a major loss, most people pulled money out of the market and put it into bonds. Yale did the opposition and reaped big gains in the months afterwards, when the markets recovered.
Swensen recommends that for investments in â€œefficient marketsâ€ (such as many of the equity markets in the United States, Europe and Japan) one employ a passive investment strategy. Efficient markets are those in which financial conditions are shared and well-known and in which the market is free to correct over or underpriced securities. Passive investments are tied to indexes (such as the S&P 500) and have much lower fees than their active counterparts. Swensenâ€™s observation, backed by massive amounts of data, is that active management in efficient markets seldom benefits the investors. Active management cost more and the fees often eat up any profit generated from the managerâ€™s strategies.

However, Swensen acknowledges the role of active investment in inefficient markets. More complicated investments require an active strategy. Alternative investments such as hedge funds, real estate and natural resources, along with emerging markets all require specialized knowledge and insight which can only be gained by employing active managers. I found his chapter on Alternative Asset Classes to be the most enlightening in the book. Not only does Swensen outline each type of investment, he explains the liquidity and fee structures for each type of investment as well as how the interest of the investors aligns with the manager of the funds and with other participating parties.

This book provides an investor with many questions to ask managers. He explains fee structures, which are often unfair to the investor and what one should be on the lookout for. He explains topics such as â€œsurvivorship biasâ€ and â€œbackfill biasâ€ which often skews an indexâ€™s performance. He suggests that one good way to insure a good active managers in the world of private equity is to find one who has a significant â€œco-investmentâ€ (as related to their net worth), meaning that if manager benefits, everyone will benefit. Too often, as he points out, due to fee schedules, an investment can flounder while the managers thrive. Swensen also explains how, especially in the bond market, powerful forces aligned against the investor. As he did in Unconventional Success, he recommends staying away from corporate bonds. However, he does provide an understanding into the various categories of such bonds.

This book came out in February 2009. I wish Swensen had waited and updated it based on the economic crisis of late 2008. Unfortunately, nothing is mentioned of the crisis with the exception of a brief discussion of the tightening in the credit markets in late 2007. Iâ€™m sure this book is not for everyone. It can be very academic; however, occasionally the reader is treated to a glimpse of his dry humor.
...more

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Nov 26, 2014 Kevin rated it really liked it · review of another edition

This is a book detailing many strategies that can be employed with endowment and pension management as well as describing which are often or sometimes the best fit for a situation. I thought it overall was a pretty good book, but the writing style left a little to be desired. It was about as engaging as a textbook.
Regarding endowments, I thought his comments regarding the time frame for it was interesting. Is it intended to last forever, or is it intended on having a set lifetime? Also, is the This is a book detailing many strategies that can be employed with endowment and pension management as well as describing which are often or sometimes the best fit for a situation. I thought it overall was a pretty good book, but the writing style left a little to be desired. It was about as engaging as a textbook.
Regarding endowments, I thought his comments regarding the time frame for it was interesting. Is it intended to last forever, or is it intended on having a set lifetime? Also, is the amount of money withdrawn a vital input into a budget, or is there some flexibility regarding the rate of withdrawals? Each can influence the type of risk that you are willing to take on. Also, is it a onetime large grant of money, or is there a stream of donations that can be increased with some prodding? “By preserving endowment assets adjusted for inflation, the institution retains the ability to ‘support the same set of activities that it is now supporting.’ In supplying a stable flow of resources for operations, the endowment provides continuity of support, avoiding disruptive interruptions in distributions to academic programs.” (26) Those that benefit from the endowment also need to have stable and reasonable expectations. “Even though market swings cause institutions to feel alternately poor and rich, sensible portfolio managers base investment and spending decisions on assumptions regarding long-term capital market characteristics.” (37)
He then talks about how “Investment returns stem from decisions regarding three tools of portfolio management: asset allocation, market timing, and security selection.” (50) He thinks asset allocation is important, but does not advocate relying solely on mean-variance analysis for determining the optimal allocation. He thinks it’s important to have a target and make sure to rebalance to ensure you maintain your optimal levels. He describes some traditional asset classes, including US Equities, US Treasury Bonds, Foreign Developed Equity, and Emerging Market Equity. While Yale and other large school endowments use these, they like alternative asset classes more than many other investors. These include absolute return investments, real assets (including real estate and timber), and private equity. “Private assets, including venture capital, leveraged buyouts, real estate, timber, and oil and gas, which barely register among the broad group of educational institutions and account for less than 10 percent of assets, play an important role for the major endowments with an allocation of 40 percent. Disciplined quantitative modeling techniques encourage investors to create well-diversified portfolios.” (127)
He then talks about asset class management and the investment process. He repeatedly talks about the importance of hiring good managers with established methodologies to manage funds. With active management, a lot depends on the manager, so it is important to hire good ones. He prefers smaller funds where employees get paid based on the results, and no other shareholders are involved to dilute the earnings. This decreases the incentives for them to go somewhere else or start their own firm. He also doesn’t like fund of funds because their benefits don’t often outweigh the costs in his estimation. He also favors small groups being involved with decisions. “Better decisions come from small internal decision-making groups consisting of no more than three or four people. As the number of people involved in a decision increases, the likelihood of a conventional, compromising consensus increases.” (302) It’s also important to constantly be monitoring the funds and ensuring that they are staying on course and not dramatically shifting their style. “Informed relationship management requires ongoing performance evaluation, incorporating both qualitative and quantitative factors. Monitoring the quality and commitment of a firm’s principals plays a central role in assessing the ability of an organization to achieve excellence. Other significant issues include fidelity to investment principles and maintenance of an appropriate organizational structure. Regular face-to-face meetings between fund managers and external advisors constitute the most important tool for performance evaluation.” (326) He also puts a lot of value in comparing performance to benchmarks when analyzing returns. In the appendix, he talks about how he prefers the risk/return characteristics to US Government bonds to corporate bonds and international bonds.
Overall, this was a book that provided a lot of great information about a topic that I didn’t know a ton about. The writing style was challenging at times, and definitely quite literally put me to sleep on more than one occasion, but it is a fairly thorough explanation of the perspectives of one of the best portfolio managers out there.
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Jan 19, 2019 Jeff Garrison rated it liked it

Shelves: business-finance

Favorite quote from the book: “[S]uccssful investment cultures encourage professionals to find new mistakes to make, instead of simply repeating old errors.” (page 304)

Originally published in 2000, Swensen updated his classic work on institutional investments early this year. Swensen’s writing is systematic, which should be expected from the Chief Investment Officer at Yale University. He begins by exploring the reasons for endowments and the necessity of appropriate polices for spending and inv Favorite quote from the book: “[S]uccssful investment cultures encourage professionals to find new mistakes to make, instead of simply repeating old errors.” (page 304)

Originally published in 2000, Swensen updated his classic work on institutional investments early this year. Swensen’s writing is systematic, which should be expected from the Chief Investment Officer at Yale University. He begins by exploring the reasons for endowments and the necessity of appropriate polices for spending and investments. After establishing a base level of understanding in these areas, he delves into a detailed outline of asset allocation and asset classes. Much of this material (especially his work on equity and bond investments) is also covered in his book, Unconventional Success: A Fundamental Approach to Personal Investing, which I reviewed last year. However, there are numerous differences between the goals and the approaches of an individual and of institutional investors. Non-profit institutional investors, for whom the book is written, don’t have to worry about the tax consequences in the same way an individual investor must consider them. Another major difference is the expanded number of assets available to institutional investors. Such institutions have a longer time horizons, more available resources for managing alternative investments and larger amounts of cash to expand into such investments. By moving into alternative investments, an institution can hedge their positions to allow for growth while protecting their principle. Swensen goes into details on alternative investments, which make up a significant portion of Yale’s portfolio. These investments are more than just hedge funds and include natural resources such as oil, gas and timber, commercial real estate, private equity, venture capital and investment buyouts pools.

Instead of providing a “how-to” manual, Swensen focuses on investment philosophy. The institution’s investment policy is a tool to help maintain an appropriate risk level for investments, by spreading investments around to hedge from a massive loss in one particular sector or class. Institutions need to have a policy that outlines assets allocations and then the discipline to do regular rebalancing of the portfolio to maintain allocation targets. As one investment rises in price and begins to claim a larger percentage of the investment pool, Swensen advises to sell and reap profits, while reinvesting in those areas in which the portfolio is down. Such “contrarian thinking”, according to Swensen, is the best way to “buy low and sell high.” Swensen tells the story of insisting on a firm hand at Yale in the aftermath of the 1987 crash. After the stock market had a major loss, most people pulled money out of the market and put it into bonds. Yale did the opposite and reaped big gains in the months afterwards, when the markets recovered.
Swensen recommends that for investments in “efficient markets” (such as many of the equity markets in the United States, Europe and Japan) one employ a passive investment strategy. Efficient markets are those in which financial conditions are shared and well-known and in which the market is free to correct over or under priced securities. Passive investments are tied to indexes (such as the S&P 500) and have much lower fees than their active counterparts. Swensen’s observation, backed by massive amounts of data, is that active management in efficient markets seldom benefits the investors. Active management cost more and the fees often eat up any profit generated from the manager’s strategies.

However, Swensen acknowledges the role of active investment in inefficient markets (such as emerging markets, hedge funds, etc). More complicated investments require an active strategy. Alternative investments such as hedge funds, real estate and natural resources, along with emerging markets all require specialized knowledge and insight which can only be gained by employing active managers. I found his chapter on Alternative Asset Classes to be the most enlightening in the book. Not only does Swensen outline each type of investment, he explains the liquidity and fee structures for each type of investment as well as how the interest of the investors aligns with the manager of the funds and with other participating parties. He also exposes many myths, such as showing how (even in their heyday) hedge funds were not as attractive as we were lead to believe due to "survivorship bias" and that the top venture capital and private equity funds are mostly closed to new investments, requiring new investors to accept lesser quality funds if they are interested in investing in these arenas.

This book provides an investor with many questions to ask managers. He explains fee structures, which are often unfair to the investor and what one should be on the lookout for. He explains topics such as “survivorship bias” and “backfill bias” which often skews an index’s performance. He suggests that one good way to insure a good active managers in the world of private equity is to find one who has a significant “co-investment” (as related to their net worth), meaning that if manager benefits, everyone will benefit. Too often, as he points out, due to fee schedules, an investment can flounder while the managers thrive. Swensen also explains how, especially in the bond market, powerful forces aligned against the investor. As he did in Unconventional Success, he recommends staying away from corporate bonds. However, he does provide an understanding into the various categories of such bonds.

This book came out in February 2009. I wish Swensen had waited and updated it based on the economic crisis of late 2008. Unfortunately, nothing is mentioned of the crisis with the exception of a brief discussion of the tightening in the credit markets in late 2007. I’m sure this book is not for everyone. I also wish he would have included more on taxes non-profits have to pay such as excise taxes. The book is academic; however, occasionally the reader is treated to a glimpse of his dry humor. ...more

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Mar 11, 2020 Alex rated it liked it · review of another edition

This book reads like an college financial studies textbook, very dry and colorless. I would recommend this to anyone working directly in the field of finance or active fund management. However, for the rest of us investors, the content is a bit much. There is a good amount of time dedicated to the specifics of running a large endowment, including how to treat fund managers, reviewing past endowments, and other specific things that do not apply to the every day investor.

If you want an overview o ...more

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Mar 01, 2010 Tyson Strauser rated it liked it

Shelves: process, finance, investing

Swensen's views on asset allocation are a useful check against an investment view of specific investments within an asset class. The best lesson I learned from this book was the importance of asset allocation in addition to great investment idea generation. ...more

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Apr 14, 2018 Akhil Jain rated it really liked it

My fav quotes (not a review):-Page 11 |"The sixth secret is that, as Charles Darwin tried to explain, survival of the fittest is not determined by competitive strength, but rather by social desirability. There’s more money than certified talent in the world of investing, so outstanding investment managers have many choices because so many investors want to be their clients. Given their freedom of choice, managers prefer to work for and with clients they like and admire, and they like and admire ...more

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Jan 01, 2020 John Mcdonnell rated it really liked it

Swensen's book ranges from a dry, almost textbook-like description of the mechanics of portfolio assembly to gory war stories of greed and mismanagement. It's actually fairly clear to see the principles that should (in principle) underlie one's own personal portfolio allocation decisions, while also providing insight into the eagle's eye view institutional investors take when making their decisions.

The single most useful thing I learned is that active management really can work, at least if you' Swensen's book ranges from a dry, almost textbook-like description of the mechanics of portfolio assembly to gory war stories of greed and mismanagement. It's actually fairly clear to see the principles that should (in principle) underlie one's own personal portfolio allocation decisions, while also providing insight into the eagle's eye view institutional investors take when making their decisions.

The single most useful thing I learned is that active management really can work, at least if you're Yale. I'm not convinced it would work for me personally, but Swensen has provided a clear picture about why and how it worked for him, both in terms of portfolio diversification and excess returns. As of 2019 Yale has an impressive 61% of its fund in private equity and hedge funds as of 2019, with only 2.75% in domestic equity, and this book explains why.

I found chapters 4–8 most directly relevant to the things I was interested in: portfolio construction, how to work with different asset classes, and understanding the incentives of financial firms.

Some interesting ideas:
—"the most important distinction in the investment world does not separate individuals and institutions; the most important distinction divides those investors with the ability to make high quality active management decisions from those investors without active management expertise."
—"Investment returns stem from decisions regarding three tools of portfolio management: asset allocation, market timing, and security selection." (In a way this is obvious but it's nice to have a clean list of the three tools)
—Don't take asset classes for granted. For example, "fixed income" is not a reasonable asset class in terms of security behavior. Traditional treasuries behave very differently from TIPS, and corporate debt is its own beast.
—Mean-variance optimization is still the mental model to use for portfolio optimization.
—Timberland is surprisingly uncorrelated to equities while producing equity-like returns.
—Active management does work for inefficiently priced asset classes, but only top tier managers will produce worthwhile returns and finding them is a challenge. Conversely, be very suspicious of long-market strategies for efficiently priced asset classes.
—Three words govern investor-manager relationships and fee structures: Principal agent problem. He believes alignment of interests can be improved but will never be perfect.
—Excess returns come from risk-taking and contrarianism, so creating an environment where risk-taking is rewarded is essential. This is difficult to achieve in larger funds. ...more

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Mar 17, 2018 Henry Barry rated it really liked it

Overall very solid book. You may find less value in it if you have no experience or education in asset management, but he does a nice job summing up basics of asset classes and the typical pitfalls faced by many institutional investors. I found his descriptions of the incentive structures of small vs large managers, and of his claim that all fixed income other than treasuries is “impure fixed income” particularly fascinating.

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Apr 18, 2021 Mark Zodda rated it liked it · review of another edition

Some very interesting insights in this book though I am not the intended audience. Those financial professionals who deal with institutional investments will probably rate this book one or two stars higher than I did. I still found it to be worthwhile reading and am glad to have picked it up. I might now look at reading his book for individual investors, "Unconventional Success: A Fundamental Approach to Personal Investment." ...more

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Dec 03, 2018 Ning rated it really liked it · review of another edition

Shelves: investing

This book is very insightful and the author proposed some practical problems in the asset management industry. It is very helpful, not only for beginners but also for experienced investment professionals.
This book is definitely worthwhile to be read again.

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Jul 18, 2018 KevinLee rated it it was amazing

Shelves: investment

It's a great book! Swensen taught me how to do investment in the right way. ...more

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Apr 19, 2021 Keven Wang rated it it was amazing · review of another edition

Great insights into how institutional investors think

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Mar 28, 2020 Dawei Liu rated it really liked it

Pioneering Portfolio Management is probably considered the closest thing to a textbook one could find in the field of Investment Management. Dave Swensen is a modern legend and though he might not admit it, the forefather of the dominant investment style found in endowments, foundations, and family offices around the world. Much of what Mr. Swensen details in this book are still quite relevant I found the writing style quite easy to read. While he doesn’t dive too deep into the weeds, or go into Pioneering Portfolio Management is probably considered the closest thing to a textbook one could find in the field of Investment Management. Dave Swensen is a modern legend and though he might not admit it, the forefather of the dominant investment style found in endowments, foundations, and family offices around the world. Much of what Mr. Swensen details in this book are still quite relevant I found the writing style quite easy to read. While he doesn’t dive too deep into the weeds, or go into Yale’s portfolio in too much length, he does provide a lot of helpful commentary on his own views. Though there is a lot of discussion that specifically relates to Yale, I think one could either skip those sections or read them to get a better sense of where Swensen is coming from. I also enjoyed Swensen’s open antagonism of credit (corporate credit, high yield credit, non-US sovereign credit, and even asset backed or structured credit) as an asset class. In some ways, I actually agree with him as historically equity markets are a far better place to get risk or beta to specific businesses, sectors, or markets, while more pure credit exposure can be expressed through treasuries. (In particular I like how he classifies them all as “impure fixed income”) Furthermore, Swensen does actually dive into a variety of strategies, markets, and return streams.

One of my concerns or questions may be that Yale’s portfolio (due to its size) likely does not actually follow many of the tenets or philosophies that Swensen laid out decades ago. Another thing that he does not spend much time on that would likely illustrate a large part of why endowments have outperformed has been their exposure to Venture Capital. VC as a sub asset class (within Private Equity) have been an incredible engine of wealth creation and value creation that simply put, cannot be accessed by ordinary investors. In particular, the best funds are not accessible for the vast majority of the institutional investors as well. These funds have so consistently outperformed over decades and I am quite sure they’ve explained a lot of outperformance over this time frame.

Overall, this was not a dry or slow read and I would definitely recommend this book to both beginners and experts in this field.
...more

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Jan 12, 2020 Danielle rated it really liked it

It's a bit dry. The big takeaway is to customize to your institution's needs. People mistakenly think that they can just take this and apply it to a smaller endowment or one with different budgetary restrictions and goals. This is not a turnkey solution but provides solid guideposts. ...more

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Jul 08, 2019 J.T. rated it it was ok

Shelves: work, finance

Decent book to increase overall financial acumen but found the flow hard to follow. The book title says it's for institutional investment but at times Swensen seems to go off into the retail/individual space. ...more

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Nov 07, 2013 Sean rated it really liked it

This book lays out fundamentals of portfolio management from the perspective of one of the most successful and credible practitioners in the market: David Swensen of Yale's Endowment. Swensen discusses the three tools of portfolio management: 1) asset allocation -- responsible for ~90% of portfolio returns 2) market timing -- mostly a fool's game, and 3) security selection -- contingently appropriate dependent on the strategy and time horizon. Swensen advises appropriately to maintain an equity This book lays out fundamentals of portfolio management from the perspective of one of the most successful and credible practitioners in the market: David Swensen of Yale's Endowment. Swensen discusses the three tools of portfolio management: 1) asset allocation -- responsible for ~90% of portfolio returns 2) market timing -- mostly a fool's game, and 3) security selection -- contingently appropriate dependent on the strategy and time horizon. Swensen advises appropriately to maintain an equity bias and follow diversification principles. His book echoes similar themes to texts by Charlie Ellis, someone else in the investment profession whom I admire. He and Charlie argue that market players routinely overpay for liquidity -- so an investor should maintain holdings in relatively illiquid securities to capture extra returns. And liquidity only exists when you need it least -- consider the air pocket of liquidity in 1987 during the October crash or 1998 during the Russian debt crisis.

Swensen also references famed value investors in arguing that margin of safety depends on the price paid and references the importance of Tobin's q for investors. Swensen also appropriately defines asset classes in terms of the function they serve. For instance, bond provide insurance against deflation and flight to quality. Given that function, TIPS, or Treasury Inflation Protection Securities, make little sense in a traditional fixed income mandate given that TIPS underperform in periods of deflation. Nevertheless, many managers bucket TIPS together as part of fixed income mandates, an inappropriate classification when one focuses on the function of the asset class. Consider the function of an investment and when evaluating strategies or managers, investigate the sector, style, or size bias and any hidden leverage. Also understand the investment process well; do not just look at historical performance figures. Moreover, beware excessive diversification, especially when hiring active managers -- you will eventually find a portfolio that effectively mimics and index fund while underperforming after layering on so many fees and other transactions costs.

Finally, think long-term and adopt contrarian thinking.

Overall, this book deserves a read and re-read. ...more

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Nov 13, 2018 Roman Schuster rated it really liked it · review of another edition

Very illuminating book - it gave a great macro overview of how university endowments should think about their portfolios, in terms of balancing the decisions of what percent of the endowment should be spent each year versus what the portfolio should be invested in to ensure preservation of purchasing power. It made me consider macro risks I had never thought about before and suggested ways to hedge them. It was also full of blow-up stories. He spent a full two pages running Jim Cramer through th ...more

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Jan 17, 2019 JimmiD rated it it was amazing · review of another edition

An excellent reference manual. First chapter is really the most important.

What my ratings mean:
5 – I felt this book was an exemplar in its genre/field. That does not mean I agree with everything it says (or the moral of the story). It is likely to be a book that will change my thinking about a topic.
4 – A very impressive book for its genre/field. It probably didn’t change me or my thinking though.
3 – An enjoyable way to spend the time reading it.
2 – This was a pain to read. It was probably diff ...more

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Jul 30, 2010 Joseph Stec rated it it was ok

kind of basic and boring, doesnt say anything novel or give any real insightful ideas. however, the various stories and examples of other funds he tells are really interesting. i would rather read a sort of "tell all" kind of book from him (or just as good, this same book written today, after their endowment fund debacles of the past few years).

dude is also in love with keynes, which in turn makes me question everything written in the book, including things i already agreed with. ...more

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Jan 29, 2014 Michael Berges rated it it was ok · review of another edition

First half is very good explanation of diversified investing and asset allocation. Second half gets very wonkish and he kind of starts speaking out of both sides of the mouth. The appendix is all about fixed income but isn't considered an actual chapter, which seemed very strange. ...more

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Mar 01, 2008 Mark rated it liked it

Hard to knock the "Father" of portfolio management. I just thought it was a little elementary. I was expecting a little more advanced portfolio theory. ...more

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Jun 10, 2008 John Reeves rated it it was amazing

Every Fool should read this book. He's probably more skeptical than most of us when it comes to whether most folks can outperform the market or not. But that's probably a good thing. ...more

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Jun 20, 2008 Yuko rated it it was amazing

Great starter book for anyone getting into indirect fund investing.

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Aug 19, 2012 Peter rated it it was amazing

Pretty repetitive but generally interesting and good fundemental approach to investment and different asset classes.

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Sep 16, 2012 Bart Kramer rated it it was amazing

Great book on portfolio management

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Dec 28, 2012 Peter Keilman rated it really liked it · review of another edition

This is valuable for understanding how strong portfolio managers think about various types of alternative investing. Recommended for its contrarian view, especially around fixed-income investing.

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Aug 26, 2013 John rated it liked it · review of another edition

Shelves: john, already-have

I found The Four Pillars of Investing by Bernstein a better read. This book repeats itself so often that 100 pages could be trimmed easily from it.

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Mar 13, 2013 Chris rated it it was amazing · review of another edition

A must read for all investors.

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About David F. Swensen

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David F. Swensen (born 1954) has been the Chief Investment Officer at Yale University since 1985. He is responsible for managing and investing the University's endowment assets and investment funds, which total $23.9 billion. Realizing an average annual return of 11.8 percent on his investments over the ten years to 2009, Swensen's consistent track record has attracted the notice of Wall Street po ...more

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“most important distinction in the investment world does not separate individuals and institutions; the most important distinction divides those investors with the ability to make high quality active management decisions from those investors without active management expertise. Few institutions and even fewer individuals exhibit the ability and commit the resources to produce risk-adjusted excess returns.” — 1 likes

“John Maynard Keynes criticized fiduciaries for preferring to “fail conventionally” rather than taking, as Swensen so often does, direct responsibility for independent, even pioneering thought and action.” — 0 likes

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