Yellow Peril Alert: NBA owners have more than $10 billion invested in China

How worried should we be about ESPN's report that NBA owners have invested over $10B in China?  This is clearly a sizable nominal amount, but how should we react?  Let's perform a back-of-the-envelope assessment to see if this level of exposure to China is cause for the concern that ESPN is clearly intimating.

With the given $10B as the numerator, let's determine the denominator, or total value, for the objective function, starting with the value of the National Basketball Association as asset.  The total value of all NBA franchises is $77.5B, according to Sportico.  Given that the article focuses on NBA owners who may have far greater assets than just their teams, we find that the cumulative net worths of just the ten wealthiest NBA owners is $180.2B, per Sportsbrief.com.  To round out the net worths of the remaining 20 owners, the majority of whom are billionaires, let's use a SWAG of $220B.

By this calculation, $10B accounts for 4.5% of the NBA owners' net worth in aggregate.

Since each owner is a high net worth global investor, let's investigate recommended investment allocation to the Chinese economy.  Let's evaluate three alternatives:

1. By share of total GDP: China is currently the second largest economy in the world, accounting for 18.62% of the total global Gross Domestic Product on a purchase-power-parity basis.  
2. By MSCI ACWI Index: This is MSCI's flagship global equity index that covers approximately 85% of the global investable equity opportunity set.  As of April 2022, China represented 3.47% of the total exposure.
3. Portfolio manager recommendation: In 3Q21, Blackrock recommended allocation to Chinese assets “two to three times” that of diversified global portfolios such as MSCI's index.  This would result in a range of 7-10%.

BlackRock is presently reviewing that call given recent macro circumstance, but 4.5% is well below the previously recommended 7-10% range.  Given that Joe Tsai's stake in Alibaba alone accounts for up to 45% of the $10B, one may even suggest that the owners of the other 29 NBA teams may be underweight in their exposure to the second largest economy in the world. 

The point: While there are certainly complications around specific investments, casting aspersions on the NBA owners’ $10B exposure to China by nominal value alone is jingoistic and devoid of perspective.

Asian-Pacific American History Month at Cornell: Campus partners spotlight

As part of Cornell's celebration of Asian-Pacific American History Month, I had the honor of moderating a conversation by leaders of two amazing campus partners -- Professor Christine Balance and Dr. Nancy Martinsen -- to discuss how their programs have helped raise the profile of the Asian/Asian American experience, becoming part of the academic and cultural fabric of the University

Christine is Associate Professor and Director of the Asian Alumni Studies Program, the first such program amongst the Ivies that will be celebrating its thirty-fifth anniversary in the coming 2022-23 academic year.  Nancy is the Kent G. Sheng '78 Associate Dean of Students and Director of the Asian and Asian American Center. 

Why investing in women is just good business

A change.org petition from Cornell Female Founders and Funders...

"We propose the following commitments that college endowments can pursue as part of the quest to further support a more diverse set of women and BIPOC founders and funders by June 2022:

• College endowments should transparently share the amount of funding going to women and BIPOC funders
• College endowments should formulate a strategy released by June 2022 for investing in emerging women and BIPOC fund managers

As students, faculty, staff, and alumni, we can pioneer this opportunity. As Cornellians, let’s lead this initiative."

David Swenson once wrote that endowments have "a time horizon measured in centuries." 

Let's ponder the multi-generational impact of backing a cohort that "typically invest a higher proportion of their earnings in their families and communities." (source: OECD)

The ultimate desktop appraisal FAQ?

Desktop appraisal... the very name is an artifact -- highlighting the distance the real estate tech/proptech sector needs to close on the innovation front.  The related matter of appraisal modernization is a real and pressing concern, even beyond the Biden Administration's a task force to develop the Property Appaisal and Valuation Equity Plan (PAVE).  The average age of appraisers is 50, a cohort that is 63.6% male who also happen to make over 50% more than female counterparts.  Such disparities make it hard to defend when stories of disparate outcomes crop up -- like how "Wells Fargo Rejected Half its Black Applicants in Mortgage Refinancing Boom."

But I digress, for desktop appraisals, or as I call it "collective intelligence (human/machine) real estate valuations" can drive more transparent, objective appraisals.  As you can readily conclude from my preferred term, I'm no branding expert, so for now, here's the "ultimate desktop appraisal FAQ"