The Free dictionary defines factoid as “a piece of unverified or inaccurate information that is presented in the press as factual, often as part of a publicity effort, and that is then accepted as true because of frequent repetition:”
Today’ Raleigh News & Observer headlines a story:
Duke's endowment shrinks 19%Today’s Durham Herald Sun reports:
The value of Duke University's endowment funds has plummeted 19 percent amid the global market downturn.And just 2 days ago Duke’s President Richard H. Brodhead said in an email to faculty and staff:
As of early December, the market value of the endowment was approximately 19 percent lower than it was on July 1.I encourage everyone to be skeptical of repeated statements of a “19% endowment loss” at Duke.
For one thing, Brodhead was somewhat vague in his statement.
“Early December” is when? The first, fifth, tenth?
Brodhead also labels the 19% an approximate figure, which he’s very right to do.
Given that a lot of Duke’s endowment has been in hedge funds and other investments that are difficult to value, treat the “19%” as a factoid.
And be wary of news stories like those linked to here in the N&O and H-S that quote Duke people putting a positive spin on Duke’s current financial situation without also including in their stories comments such as those made by Ed Rickards in his JinC column What Duke's endowment loss means and this comment on a post thread here:
I suspect that the 19 % loss may be an understatement since, like Harvard/Yale, a significant portion of Duke's assets are in exotic/illiquid type investments ( private equity, real estate, hedge funds )which may have been particularly hard hit and whose values are not always readily available. And the fiscal year is not even half over, with the real prospect of additional losses between now and 6/30/09.The entire N&O story's here; the H-S story's here.
As I commented in a previous post, Duke's investment losses go well beyond losses on its endowment ( $ 6.1 billion as of 6/30/08. ) Duke/DUHS had an additional $ 3.7 billion of investment assets ( including $ 1.3 billion in its pension plan )as of 6/30/08. Applying Duke's estimated 19 % to the total assets ( $ 9.8 billion ) results in losses of nearly $ 2 billion -- and I believe this is a low estimate.