The Cinderella Strategy

Discussion in 'Non Sports' started by Staxawax, Mar 4, 2021.

  1. Staxawax

    Staxawax Well-Known Member

    Money:
    $11,962
    Has anyone read this yet? I'm not willing to spend $24 on a new hardback!

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  2. dawgs2014

    dawgs2014 Well-Known Member

    Money:
    $7,202
    Image1614865987.073794.jpg

    I couldn’t help but notice this chart in the Amazon preview of the book, and this kinda thing really irks me because it’s lazy analysis.

    If you look at the growth and the ebbs and flows of the line, it’s almost exactly mirroring what the s&p did in that time.

    Long story short: the endowment growth is almost assuredly due primarily to market growth, and just coincidentally coincided with the final four runs.

    The spin zone here is that the Butler Final Four runs triggered a ten year bull market.


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  3. Hinkle

    Hinkle Well-Known Member

    Money:
    $11,433
    On the other hand, unless you’re prepared to argue the billion dollar exposure from back to back final fours didn’t impact the resources of the university, does it matter?


    Sent from my iPhone, so it’s probably not written all that well
     
  4. dawgs2014

    dawgs2014 Well-Known Member

    Money:
    $7,202
    If you’re going to claim that the basketball success spurred dramatic endowment growth, you should minimally look to eliminate the single greatest cause of endowment fluctuation as a possible variable.

    What I said can be true and the university can benefit from the exposure.

    I did my senior capstone project on this. There was undoubtedly a massive benefit. Applicants surged as did quality applicants. The year after the first final four there were like as many male applicants as there were total applicants just a couple years before-and as we know-Butlers applicants are predominantly women. Some colleges saw their average act score grow 2-3 points amongst freshmen.

    From a financial standpoint, in a span of two we went from playing on the Horizon league network to getting paid to play every game on national tv. We’re selling far more tickets now than we did then, and at a much higher price. I’m sure athletic department donations have skyrocketed.

    We’ve been able to fundraise, what, $60 million for Hinkle? There are two gorgeous new buildings on campus and two or three new dorms.

    There is a *very* real story to be told of the success that came from Butler’s final fours. Unless they have the worlds worst investment team and their endowment just coincidentally was extremely highly correlated to the s&p for a full ten year span, that story story isnt told by the growth of the endowment.


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  5. BUcheer

    BUcheer Well-Known Member VIP Member

    Money:
    $7,133
    A perfect read for March and I have several on order—giving away as gifts. Had the privilege of reading an earlier draft and it’s really a great read on many levels. Anyone who follows Butler, college basketball, sports marketing, branding, etc., will find it insightful. I’ve been around the program for awhile and learned some things I didn't know. A really good mix of storytelling and useful data.

    Caution: If you are going to focus on just the endowment as a measure of what that 20 year run accomplished then you need to broaden your thinking. It’s part of the conversation, but not the conversation.
     
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  6. dawgs2014

    dawgs2014 Well-Known Member

    Money:
    $7,202
    Commme onnn. Read the post right above yours. I was the only one talking about the endowment, and also went into detail about how many developments were birthed from those occurrences. Commenting about the endowment was only meant to highlight that what was written about the endowment on the one page preview I saw is almost certainly confirmation bias, and needed more skepticism and analysis.


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  7. Hinkle

    Hinkle Well-Known Member

    Money:
    $11,433
    Understand that. If the point of the book was to precisely lay out the impact of what Butler did, I get it - it’s worth quibbling over. But if the book is about how Butler did what they did and as an aside they reference that analyzing it matters because it had a significant impact on the university, and they pick a bad way of showing that significant impact (but we all know their overall point is correct), just not sure why it matters. But I haven’t read the book; maybe this crappy analysis is a bigger part of it than I’m thinking it is.
     
  8. dawgs2014

    dawgs2014 Well-Known Member

    Money:
    $7,202
    Your point is valid, but this is literally the only part of the book that I’ve seen, and it’s most likely incorrect about what it’s stating. The way in which it’s wrong Could have been easily avoided if approached with appropriate skepticism. That kinda thing is a pet peeve of mine-and it’s totally okay if you don’t care about it at all.


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  9. BUcheer

    BUcheer Well-Known Member VIP Member

    Money:
    $7,133
    The endowment benefited from major gifts that are directly tied to the FF runs. It’s been analyzed.
     
  10. dawgs2014

    dawgs2014 Well-Known Member

    Money:
    $7,202
    I’m sure it benefitted, but we still have to explain the dramatic correlation to the s&p to suggest that the largest growth component wasn’t investment activity. If it wasn’t, Butler needs new financial oversight immediately.

    The ten year return on institutional s&p funds increase initial investment by about 2.5x. The endowment grew by about $100,000,000.00 or 75% during that time.

    Now granted that an institutional portfolio is probably going to have quite a bit of alts and much of hedge has underperformed the s&p on that time frame, and it would likely serve Butler well to have a larger than normal cash/ultra short allocation.

    If more of that growth is due to gifts than investment returns, it’s a totally reasonable question to ask what the hell are they doing with their endowment investments? They basically earned standard institutional returns during a massive bull market.


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  11. BUcheer

    BUcheer Well-Known Member VIP Member

    Money:
    $7,133
    How the endowment was managed is entirely different than your initial questioning that the endowment benefitted from the runs. Sorry can’t provide any insight on management.
     
  12. ButlerFan89

    ButlerFan89 Member

    Money:
    $81
    Not to mention the purchase of CRT land & current buildings.


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  13. dawgs2014

    dawgs2014 Well-Known Member

    Money:
    $7,202
    Oh I know that-endowment management is big business.


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  14. pjohnsto2003

    pjohnsto2003 Well-Known Member

    Money:
    $7,968
    Heh heh - endowment. You mean, “The water’s cold in the urinal?”


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    godogs91 likes this.
  15. godogs91

    godogs91 Well-Known Member

    Money:
    $4,098
    And you are aware that the author is the Executive Director of Principal Gifts at Butler, right?

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  16. godogs91

    godogs91 Well-Known Member

    Money:
    $4,098
    It's deep, too!

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  17. dawgs2014

    dawgs2014 Well-Known Member

    Money:
    $7,202
    No I was not.

    I don’t think that disqualifies what I’ve said previously after BU Cheer stated the large scale gifts; the growth is either still primarily due to market growth, or the portfolio management is jarring.


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