Now, let me give you an example of something that I'm telling mayors more and more these days. We're saying, because CDBG is often the largest allocation of money that they get, cities get from HUD. We're saying, look, what we see out there is that we need more housing. We need more affordable housing. And at thesame time, only about 29% of CDBG money is being used directly for housing. They're using it for infrastructure projects. Because it's flexible.
users of financial services-- the kinds of function which I described at the beginning in terms of payment system, wealth management, capital allocation , and risk mitigation.And we need to address some of the personal behavior of individuals within it as well.
So if you took two companies with identical operating results, same level of revenue and the same level of profitability, and two different approaches to capital allocation , over long periods of time, they drive two very different per share outcomes for their share holders.Second piece is that if you looked at this group of eight, they fit an interesting sort of personal profile.
I would guess again that most people in this room are dealing with two things day-to-day. Prioritization and resource allocation . Right? Prioritization. If you realize, once the light goes on, you can't get to everything, all right?What are you going to get to? What's the priority? Right? Because once you realize you're not going to do everything, at least get the most
countries have started to collect data. But up until today, with covet, we are not able to see countries classifying that information by race and ethnicity allocations . Resources are being allocated in most of these countries, and that's why many of these programs feel, you know, because most of these governments don'tnecessarily have targeted programs that addresses that identity and cultural elements that is embedded within the within the black community. At the corporate
it was passed to initiate major changes through-- fund allocation with environmental and climate justice block grants, clean energy, and emission reductions, and nature-based solutions. And so we see in the aggregation of these efforts, support given to Native Hawaiians and others
So, what is the secret to anti-aging? It's the proper allocation of energy. Can you can you How What's the simplest way you can explain that to me?
benefit other people, but who are denied access to capital, one of the things that you do is you start to change the narrative we have about whether capital allocation is efficient, and whether inequality means that we are actually just taking random lottery winners and heaping enormous riches on them to the detriment of their soul and to the detriment of our society.
to have an assortment of what are known as low-correlation assets. a more conservative allocation until they see how they react going through volatility or a bear market and making sure they can handle that sort of, you know,
And the thing here, though, is that it's very constrained science fictioning, which is that the science fictioning is predicated This is another allocation of scarce resources.
schedules are in different neighborhoods, even garbage pickup schedules in various neighborhoods. Also the allocation of resources to them, the study of crops, decisions on trade.
simplification purposes we're going to talk about a 6040 portfolio you could increase your Equity allocation so is that a good idea now in the market when valuations aren't really screaming the Buy Signal this is an equation known as the
the long-term view is always the biggest critical success factor so the younger that's an asset allocation plan where you're Diversified across asset classes you know You' got us Equity exposure
And there's a lot of metrics we can look at to try to improve this thing, but we're going to focus on two here just because of time constraints. And one is asset allocation . So trying to determine how much stocks do we own?
What's the bottom line? When it comes asset allocation , complexity does not work. It's just the evidence.
There was a cover story in Fortune magazine, 1995, 1996, and Roberto Goizueta who was the CEO was lauding this EVA approach to capital allocation . And Coke at that time had a 10-year track record of creating some serious amounts of stockholder wealth.
The same asset allocation ?
It's about asset allocation and why it doesn't work.
the solution um spectrum allocation should not be a shovel ready idea it should be an incentive ready idea um in
of treatment and allocation of resources, see which one works.
So asset allocation is basically your investment plan.
Let's shift how we shift resource allocation but not shift the purpose vision.
even the rules that govern capital allocation .
And I think it's a resource allocation hack in the sense that most people are spending a good portion of their time
Tell me the percentages of your asset allocation .
to have an assortment of what are known as low-correlation assets. And that's the reason why asset allocation and buying
to have an assortment of what are known as low-correlation assets. So if having that bond allocation or having some portion of your portfolio in commodities or in real estate or just keeping an excess in cash
And the thing here, though, is that it's very constrained science fictioning, which is that the science fictioning is predicated Is that it means an allocation of scarce resources.
We want managers that have good capital allocation skills, they make constructive acquisitions, and you know, they really think long-term when they make investments.
at how there was different allocation for funding in white school versus Black schools.
that you would like to see? My understanding of sort of the HUD that you've inherited is, because you have a Republican Congress, there's not much that can be changed in the sense of financial allocation , the rules that you've been given in the few years that you've been able to be at HUD. In other words, your degrees of freedom of fixing this are lower than it might appear to an outsider, because you can't get the money moved around and things like that. >>Sect. Julian Castro: Yeah.
The pattern of earnings over our lifetime is different from the pattern of consumption we want to maintain. We need finance for capital allocation . That is to take the savings of the country and translate them into the capital stock of the country.
A comment that's been attributed to him is he's sort of said your margin is my lunch. But their approaches to capital allocation and to running their businesses are very different.
That's 50% of your weight allocation right there.
And the same with asset allocation .
What if we ditched teams and headcount allocation ?
as though you have a resource allocation problem. Something I'll actually just mention this. Something I've often wondered. You're really talking about designing
is probably true in time allocation , but wh-, one of the most interesting stories that we have captured in our teenage work is that texting is alive and well in part because
blind as a bat in its allocation of resources as it stumbles along in its blindness ignoring the consequences of its actions that are represented by the externalities it creates.
Therefore, the allocation of resources is much better.
How do you think about a division and risk and capital allocation as you have been an operator or a manager of a business?
how do you decide for you specifically, rather than just some rule of thumb? Like how do I decide what my personal asset allocation should be? That's also a good question.
to have an assortment of what are known as low-correlation assets. So if you talk to 100 different people about asset allocation , you're going to hear 101 different responses.
And the consequence is that because we're not solving the allocation problem at the front, it gets solved on the back end a lot.
And I think it is the worst possible allocation of resources to have people tie up every free penny they can
or maybe we don't want to add complexity. So first, asset allocation . So before I tell you what's going on here, this paper is a 2009 paper in the "Review of Financial Studies." Which if you don't read geeky finance research,
And they're also really effective because they're really cheap, too. OK, that's asset allocation . Next is stock selection.
And the primary area of overlap was in the area of capital allocation . And so I think the easiest framework for thinking about capital allocation is that to be a successful CEO, over long periods of time, you need to do two things well-- you need to optimize the profits of the business you're running and you then need to invest or allocate those profits.
A comment that's been attributed to him is he's sort of said your margin is my lunch. profitable that you don't have to make capital allocation trade offs.
Real estate like REITs should be part of your asset allocation because it is sort of a hedge to inflation, but what you're talking about is being a landlord or investing