In March of last year, Charlie Munger — Warren Buffett’s second-in-command — donated $200 million to UC Santa Barbara for state-of-the-art student dorms. It was a record gift that far surpassed his previous record-setting gift of $65 million to fund the Kavli Institute for Theoretical Physics on the UCSB campus.
But there was a caveat to Munger’s donation this time around: There can be no windows in the dorm rooms. They must be like Disney cruise ships’ artificial portholes, where “starfish come in and wink at your children,” he told the UC Board of Regents. “No one can tell it’s not a window.”
Weird? You bet. But animatronic portholes in the school’s dorms are no weirder than what’s been happening at the UCSB endowment, where in-house financial clinicians and well-heeled outside fund managers could not get the endowment’s five-year annual returns to match the average American’s 401(k) returns for the period. It’s enough to make donors want to open their virtual portholes and scream into the fake void.