Charles Skorina is an interesting “old hand” – CharlesSkorina.com – who runs an executive search firm for the endowment world. And I like his letter. I met him several years ago and the funny part was he told me I was “too old” to really do anything but what I was doing, which I actually wasn’t asking but it was funny nonetheless.

In sharing some whining about the “endowment world as practiced,” he recently noted a problem, which was confirmed to me in a recent meeting in NY where I was told that “no one buys stocks to hold for 8 years.”

Here’s the problem: over the last three decades most large endowments have tried to mimic the “Yale model.” But there was only one David Swensen, and he was an outlier, a different thinker, a trailblazer and his first book was called Pioneering Portfolio Management for good reason. It was all new stuff. Forget public markets. Spend your time uncovering private opportunities with less visibility and more upside. And get in early.

The School of Swensen produced many top-flight acolytes, but the master is gone and the world has changed. Today that trail he cut through the wilderness has become a freeway and the endowment model is a very crowded trade. Let’s let Mr. Swensen explain the conundrum.

I figured out when I revised Pioneering Portfolio Management that the most important distinction isn’t between the institutional investor and the individual. It’s between those that are set up to make high-quality active management decisions and those that aren’t.

The investment management world is a strange place in that the right solution is not in the middle. The right solution is at one extreme or the other. One end of the spectrum is being intensively active. The other is being completely passive.

If you end up in the middle, which is where almost everybody is, you pay way too much in fees and end up getting subpar returns . . . The passive group is not nearly as big as it should be. Almost everybody should be there.

I can assure you that in 2025, public markets and smallcap will NOT put you in the middle.