Invest Like The Best
Episode 38 The Art of Asset Allocation
Invest Like The Best

Episode 38: The Art of Asset Allocation

The Art of Asset Allocation

David Salem was the founding president and CIO for The Investment Fund for Foundations and currently is CIO of the Windhorse Group. We cover foundations of asset allocation, first principles thinking, and the history of the Yale and Harvard endowment models.

This podcast is sponsored by:

The CFA Institute. The CFA Institute is the global association of investment professionals whose mission is to lead the investment profession by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society. CFA Institute serves a global community of investment professionals working to build an investment industry where investors' interests come first, financial markets function at their best, and economies grow. The chartered financial analyst credential is the most respected and recognized investment management designation in the world.

[00:02:30] – (First question) - Differences between asset allocation then and now

[00:06:31] – Drivers of success for Yale endowment model and what aspects are emulated

[00:13:20] – The Mount Everest question

[00:15:37] – Ego in managers and details of manager selection

[00:21:52] – How to balance person with process in manage evaluation

[00:27:26] – How to suss out adaptability

[00:30:13] – What are disqualifying attributes of money managers

[00:36:35] – Most desirable thing to create relationship with money manager

[00:40:51] – What to look for in culture

[00:47:14] – What was Meyer's edge at Harvard and how did it differ from Swenson at Yale

[00:53:52] – The process of building a client portfolio with total return, hedging, and diversification buckets

[01:00:41] – What are some favorable attributes of managers

[01:02:33] – The stories of Chuck Feeney and Lance Armstrong

[01:10:11] – Most memorable meeting of money manager

[01:12:30] – Kindest thing anyone has ever done for David

[01:17:21] – Three things to read for foundation on investing education

[01:20:06] – Most memorable day of his life

The Art of Asset Allocation

Introduction

Patrick
Our guest this week is David Salem. David was the founding president and CIO for the Investment Fund for Foundations, which served 800 endowed charities under David's 18 year tenure. He's now the CIO of the Windhorse Group, which focuses on long term value orientated investing. This conversation wanders into and explores many different areas of investing and life. The theme is how to think about asset allocation and invest holistically from first principles. But we talk a lot about motivation, incentives, human behavior, and the fear of missing out as key variables in money management. We discuss the history of the Yale and Harvard Endowment Models and how their success has affected the asset management world for better or worse. I also can't stop thinking about David's Mount Everest question, which we explore early on in our conversation. I'd love to hear your answers to that question. So email me or message me with your thoughts. You can find show notes for this episode at investorfieldguide.com/salem. And now please enjoy this great conversation with David Salem.

Asset Allocation

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