Richard Ennis – The Modern Endowment Story: A Ubiquitous U.S. Equity Risk Premium (The Best Investment Writing Volume 6)

The Meb Faber Show - Better Investing

The Idea Farm

Business, Investing, Management

4.7 • 938 Ratings

🗓️ 22 July 2022

⏱️ 12 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Today’s episode features Richard Ennis reading his piece, The Modern Endowment Story: A Ubiquitous U.S. Equity Risk Premium. Richard managed money at Transamerica and pioneered quant investing in the early 1970s. He helped create the field of institutional investment consulting at A.G. Becker & Co. Richard co-founded EnnisKnupp, the first consultancy to be recognized as a professional services firm. The Best Investment Writing series features top research pieces that we’ve shared via The Idea Farm in the past year. Subscribe here so you get these sent to you each week. Check out the past series of The Best Investment Writing below: Volume 5 Volume 4 Volume 3 Volume 2 Volume 1 ----- Follow Meb on Twitter, LinkedIn and YouTube For detailed show notes, click here To learn more about our funds and follow us, subscribe to our mailing list or visit us at cambriainvestments.com ----- Today’s episode is sponsored by Stream by AlphaSense. Stream is an expert transcript library used by people just like you to quickly perform preliminary diligence on new ideas related to their target companies in the tech, media, telecom, healthcare, consumer and industrial sectors; avoiding the time, hassle, and cost of traditional expert network calls. With over 15,000 on-demand expert call interviews, 100+ new transcripts added each day, AI smart search technology, and 70% of our experts unique to our network, it's no wonder the world's leading financial firms choose Stream. Sponsor dollars for the entire Best Investment Writing series are being donated to the charity of the guest’s choice. Today’s sponsor dollars are being donated to The Heights Foundation on behalf of Richard Ennis. ----- Interested in sponsoring the show? Email us at [email protected] ----- Past guests include Ed Thorp, Richard Thaler, Jeremy Grantham, Joel Greenblatt, Campbell Harvey, Ivy Zelman, Kathryn Kaminski, Jason Calacanis, Whitney Baker, Aswath Damodaran, Howard Marks, Tom Barton, and many more. ----- Meb's invested in some awesome startups that have passed along discounts to our listeners. Check them out here! Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome podcast friends. We're back with volume six of the best Investment Rioting Series.
0:13.0	Each year, our team carefully sorts through tons of research
0:16.3	and investment letters from some of the most respected
0:18.9	money managers and investment researches
0:20.8	from all over the world to pick the best of the best to share with you.
0:24.4	We offer the authors of those pieces the chance to record an audio version as a segment of the
0:29.2	podcast. Past participants included the likes of Cam Harvey, Larry Swedro, and Rob or not.
0:35.0	Enough for me. Let's get to our guests and let them take over this special episode.
0:40.0	Hello, this is Richard Ennis. I'm retired chairman of Ennis Knup and a former editor of Financial
0:49.2	Analysts Journal. Today I've been reading from an article appearing later this year in Journal of Portfolio Management.
0:57.0	Its title, The Modern Endowment Story, a ubiquitous U.S. Equity Factor.
1:05.0	It's actually the third in a series of articles on endowments I've done in the last two years.
1:12.0	The first article, Endowment Performance, which appeared in Journal of Investing, examined
1:17.8	returns over a 47-year period beginning in the mid 1970s.
1:24.3	It identified three investment eras.
1:28.2	I call the first of them the stock and bond era.
1:38.0	That's what endowment portfolios consisted primarily of U.S. stocks and bonds. It ran for about 20 years.
1:42.0	I concluded during that era,
1:45.0	Nacubo's composite of large endowments
1:48.0	underperformed passive investment
1:51.0	by about 80 basis points a year, roughly the amount of management fees and
1:56.4	transactions costs. I dubbed the second era, which ran from 1994 through the mid to late 2000s,
	...

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