Why we exist
Over 85% of the nations 250 largest and most well-known endowments and foundations underperformed their own blended benchmarks. Repeatedly. Consistently. Shocking. Depressing. And, despite paying substantial sums for investment consulting. This was outrageous.
You would think that $13 Billion (in the case of only one high profile foundation) should be sufficient enough to elicit from the market place appropriate advice as to how optimize their portfolio’s performance. It wasn’t.
If you think the ultra-wealthy have the answer, you would be wrong. In fact, there is service organization for private family offices. That organization represents those families with a minimum net worth of $100 Million. The executive director, in a recent speech, decried the difficulties her constituent members experienced in trying to achieve consistently good returns.
Seeking “alpha”, they all failed — miserably.
Even “sophisticated” investment committee members and their ‘name brand’ investment consultants were on a quest – a wild goose chase – to out perform the markets. That is called seeking “alpha”. That is called impossible.
History has shown it over and over again. “Alpha” is industry jargon for beating the markets. The equivalent of searching for the Holy Grail, or tilting at windmills. The impossible dream.
These advisors and the committee members believe (are duped?) they could achieve what others (the great unwashed – you and I) cannot. Hubris. Are they really that smart? Smarter than the markets? Consistently? Over long periods of time?
Well, what about the endowments at Harvard and Yale? They too have since come back to Earth. But at least they paid handsomely for the privilege.
What about Warren Buffet? His stock picking is less than stellar, and the long-term returns of Berkshire Hathaway stock is trending back to average. He has stated often and publicly that his time horizon for selling an investment is never. But, did he tell you he sold US Airways, or Conoco-Phillips? Of course not.
And according to DALBAR (a Boston based, independent consulting firm that provides financial research), almost all investors under perform the markets. That’s not news. But what is incredibly frustrating is by how much and for how long:
By 6-8%! Every year.
That is for any twenty-year rolling period, over the past 33 years.
What chance did you and I have, then?
So, Mitch made it his mission to bring a stable, solid, transparent, and prudent process to his investing clients. He found that process through Free Market Theory. To bring consistent, predictable market returns. To accurately know and measure and manage risks.
To minimize fees, expenses, and taxes. To align his interests with yours. To bring clear vision to what for many (even the very large and “sophisticated” investors) is the fog of investing.
Mitch’s approach is also useful—in fact it is necessary — for foundations and endowments, and importantly, now available for you.
