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Comment by petermcneeley | Hacker News Reader

Harvard's average real annual return is 10.2% (Piketty's book "Capital" p569) You need a team of very talented investors to get these types of returns y/y

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Isn't that almost exactly what, say, the s&p 500 returns? [0] And you don't need a team of anyone to buy and hold that.

[0] https://www.investopedia.com/ask/answers/042415/what-average...

"Adjusted for inflation, the historical average annual return is only around 7%. " from your link.

There's a 10% nominal return, but a 7% real return. Harvard beats this by 3% annually, which is huge!

the real test is how well Harvard's fund does in year where the s&p 500 is doing poorly.

No, the real test is sustained performance over time in the form of an average.

If the S&P 500 falls 10% in a given year, I can hold 100% cash, light 5% of it on fire, and outperform the S&P 500 - that doesn't make it a sound long term strategy.

Are we also omitting the fact that it's a nonprofit and therefore has grossly better tax treatment?

thats not how taxes work... I am not a lawyer/cpa but if I understand correctly, any investment income harvard receives would be taxed at the normal rate for that type of activity.

While that's true, they still lag what I think is their benchmark, other top tier schools:

https://www.bloomberg.com/news/articles/2018-06-26/harvard-b...

It's all based off of the Yale system. Basically longer term outlook allows use of decoupled asset classes such as timber and commodities

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