Konrad: The October 3, 2005 issue of Fortune magazine shows that Harvard, as of June 2004 (i.e., under the old management regime), had only 15 percent of its money in U.S. public equities. Harvard has faith that its MBAs will make money, just not that they will make money for shareholders.

On the other hand, it wasn’t Harvard’s management that got those spectacular returns, but the investment manager whom they have now replaced. He didn’t seem to think that equities will continue to “suck wind” and he’s the one who’s shown that he knows what he’s doing.

Your are rigth on the money. We live in the age of agency. Stocks are owned by mutual funds. It seems that there is no longer any direct responsibility for anything. People used to own stocks (not funds with names like “Pegasus Overseas Growth”, and held managers accountable for their investments.

Perhaps they see the transition of the baby-boom generation from peak earning (building up their 401K, buying stock) years to retirement (selling all that stock). That will definitely depress the market in the next decade or two.

Of course, looting is happening here and now, and Phil is right that it’s a huge problem.

Just because he invested in emerging markets in the past, doesn’t mean he’ll do this forever.

Corporations often assume that people are no good for things other than the ones they have experience in, but Harvard may be smarter than that.