Today among our overcompensated and underachieving elites

Harvard’s money managers are doing very well, for themselves at least:

Harvard made many mistakes over the last decade, according to Thomas Gilbert, a finance professor at the University of Washington, but almost all of them boiled down to a single miscalculation: the belief that its top money managers—who were paid $242 million from 2010 through 2014—were smarter than everyone else and could handle the risks almost all other endowments avoided. “They became loose cannons,” Gilbert says. “When you’re managing donor money, it’s appalling.”

So what is Harvard getting for its hundreds of millions?

Money invested in the Vanguard 500 Index Fund made an AAV of 8.5% over the same 10-year period. For the low, low price of ONE MILLION DOLLARS PER YEAR I would be willing to execute this highly complex investment strategery for Harvard.

I was thinking of using Gordon Gekko’s line about how fund managers can’t beat the S&P 500 because they’re sheep, only as Gilbert says it’s sort of the opposite problem: essentially, Harvard’s fund managers are being paid to gamble. Only while at a casino even optimal strategy generally just means you’re losing to the house less quickly, returns to capital have become so sweet than even a series of failed gambles will still make money, if less money than interns basing the fund’s investments on a group of monkeys throwing darts at the Wall Street Journal. It’s a nice racket.