
A private high school in California makes $24M gain on Snapchat investment - rak00n
http://www.foxnews.com/tech/2017/03/03/california-high-school-makes-24-million-from-snapchat-ipo.html
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pwnna
Kind of clickbait title? It's an investor that convinced a local school to
invest $15k in a $500k investment that his partners couldn't put down. This
time they lucked out... but isn't this in general kind of reckless as there's
no guarantee for RoI at all and the school is kind of taking away the money
from the kids?

Also how are schools allowed to invest like this at all?

~~~
josephpmay
I happen to know a lot about this situation, and there wasn't anything sketchy
at all:

1) St. Francis is an expensive ($17k a year, which is actually pretty low for
the area) private school, not a public school that receives funding from the
government.

2) Most private schools have endowments and investment vehicles to manage
those endowments. Tuition money generally isn't going into these funds, rather
they're for donations and capital campaigns.

3) Many of the parents of the kids at St. Francis are tech executives or VCs,
so it's not surprising that they're investing in startups instead of more
traditional mutual or index funds.

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nodesocket
Note to self, send my future kids to St. Francis.

~~~
andyjsong
Take a look at Bellarmine, Castilleja, and Harker as well.

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atomical
So normal people can't get into deals like this?

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nefitty
You know, I spent a few hours this morning almost fuming at how insanely lucky
it is to get a return on $15k like that. I started panting at the possibility
that I might somehow get this lucky, but of course, turns out it was $15k of a
$500k investment -_-'

~~~
atomical
I had similar thoughts. I realized that these are "get rich quick" thoughts
and for most people that never ends well.

~~~
skookumchuck
There was a story on Reddit a while back about a soldier who bought a Rolex in
the 1960s for $120, and it was worth $70,000 today. Pretty lucky, right? But
then someone pointed out that if he'd invested in the S&P 500 instead, it
would be worth $25,000 today (if I remember the figures correctly).

It's pretty hard to outdo investing in the S&P 500, and most anyone can do it.

~~~
stagbeetle
> _There was a story on Reddit a while back about a soldier who bought a Rolex
> in the 1960s for $120, and it was worth $70,000 today._ [0]

> _Pretty lucky, right? But then someone pointed out that if he 'd invested in
> the S&P 500 instead, it would be worth $25,000 today (if I remember the
> figures correctly)._

What's not said is that from 1960 till 1980, you'd only make 200% (10%
annualized). Compared to angel investing giving you 250% over 4 years (62.5
annualized).[1]

This is also assuming you know how to time your trades properly and get in at
a bottom. If you got in at the floor of the dot com crash you'd make, at most,
180% in the 15 years you held (12% annualized). If you got in at the floor of
the 07-09 crash you'd make, at most, 250% in the 9 years you held (28%
annualized). These are best case scenarios and it's unlikely for someone that
believes in the S&P will know about market timing.

The base of this argument is laden with guilt and regret over not having 20/20
hindsight. "If you got in at X you would have Y." The same is said with BTC,
"if you got in at the beginning you would have been an Xillionaire!"

However, this is no longer practical in the ironed-out, risk-adjusted world we
live in now. The S&P's risk has been priced in and over-sized returns are no
longer possible. You'll start seeing this with startups in the coming years
too. As people start understanding them more, risk will be lower, and thus
returns will be lower.

[0]
[https://www.youtube.com/watch?v=li0mRLcGbU8](https://www.youtube.com/watch?v=li0mRLcGbU8)

[1] [https://techcrunch.com/2012/10/13/angel-investors-
make-2-5x-...](https://techcrunch.com/2012/10/13/angel-investors-
make-2-5x-returns-overall/)

~~~
skookumchuck
It is not practical to guess at picking the right unicorn investment,
collectible, or market timing. It remains practical, however, to invest in
broad market indices. You won't become a zillionaire, but with consistent
investing and discipline, such boring strategies pay off in the long term.

If you're willing to accept more risk/return than the S&P 500, there are
Nasdaq index funds, too.

To play with various scenarios, there's a calculator:

[https://dqydj.com/sp-500-return-calculator/](https://dqydj.com/sp-500-return-
calculator/)

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jnordwick
I hope he gets his tuition waved for the next couple years.

