Turning Crimson

So apparently Harvard's going to take a hit in the economic crisis.  Having put international exposure into my 401k (and watched it get killed) I suppose it is reassuring to know that the best and the brightest got hit the same way.

But wait -- first, these guys had a 23% ROI for 2007.  A 30% hit isn't much fun, but it's only rolling the clock back about 18 months.

But wait -- why are we even asking these questions?  If you are into emerging markets, your time horizon should be really long and your tolerance for volatility should be really high.  I've got this stuff in my 401k - it's about 33 years too soon to be asking the question "how'd we do"? Harvard's been doing this for a long time, and probably isn't looking to liquidate the endowment and cash out any time soon.

If there's a point to this rant it is only this: we (investors) seem to have become obsessed with whether stocks have gone up or down over short term periods (one year, five years, or worse, even months and days).  Have we all forgotten what a stock is?  A stock is a claim on future cash flow from now to the end of all time.  Stocks exhibit enormous volatility and reasonably good long term returns.  If we care about how the market moves, we may not be in the market for the right reasons.