December 30, 2008
Yeshiva University revises losses to $14.5 million
Two weeks ago, Yeshiva University President Richard Joel wrote in a letter to the YU community that the New York college had lost $110 million in investments made with Bernard Madoff. Today YU drastically recharacterized its losses as only $14.5 million. Why the massive mark down?
The Jewish Community Foundation of Los Angeles also has chosen to focus on how much it had invested with Madoff ($18 million) and not how much it believed that investment was worth ($25.5 million). But sticking to the smaller investment doesn’t mean YU only lost $14.5 million. Think of it this way:
Let’s say you put $10,000 in the bank. Over a few years, that investment grows to $15,000. You’re up $5,000 but if your account was wiped out, you’d wouldn’t be down $10,000—you’d be down $15,000.
Losses on paper are still losses, especially if those “fictitious” profits have been used in planning for future spending.