Big box retailer JC Penney (JCP) reported 2nd quarter earnings this morning. With the stock already down 37% for 2012, expectations were low. Specifically, the analysts were looking for a loss of $0.25 on $3.2 billion in revenue. What JCP reported instead was a loss of $0.37 on sales of $3.02 billion.

Ron Johnson, formerly Apple's (AAPL) head of retail operations, is leading JCP's turnaround effort. Warren Buffett once said "when a great manager takes over a bad business it's the business that emerges with its reputation intact." That sums up Johnson's tenure at JCP perfectly, where the man once thought to be a retail genius is risking being known as the guy that drove a once-proud company into bankruptcy.

Here's what CEO Ron Johnson had to say in the company's press release [Numbers added]:

(1) We have now completed the first six months of our transformation and while business continues to be softer than anticipated, we are confident the transformation of JC Penney is on track.

(2) The transition from a highly promotional business model to one based on everyday value will take time and we will stay the course.

(3) We continue to learn and adjust, and fully expect that our unique, specialty department store experience will drive JC Penney's long term success.

(4) Our rock solid balance sheet will support the execution of our transformation and position us for growth beginning in 2013.

These were less boilerplate statements common to all earnings releases than they were a cry for help. Every single sentence provides more than enough reason to avoid the stock. Taking them in the order they were presented...

The Ivy League consists of eight schools that are widely regarded as being some of the finest in the United States. Where the SEC is synonymous with football and the PAC-12 is known for the stereotypical "Left Coast" lifestyle, the Ivies are known for both their rigorous athletics and inflated self-esteem.

Some of the reputation is bluster, but when it comes to their endowments, the Ivies are everything they're cracked up to be. Five of the top 10 largest university endowments in the U.S. belong to Ivy League schools — Harvard topping the list at $32 billion, Yale in second at $19 billion, and Princeton third, with a fund of $17.5 billion as of October 2011.

Larry Swedroe, director of research for Buckingham Asset Management and author of Investment Mistakes Even Smart Investors Make, joined Breakout to walk us through the endowment investment process.

Why do schools have endowments?

Generally consisting of money from donations, endowments are typically put to work funding construction, scholarships, and other operational needs not fully covered by school tuition.

Money sitting idle or parked in Treasuries earning next to nothing does no one any good. The greater the return, the larger the endowment, and the bigger the buffer between the schools and poverty. Essentially, schools have endowments for the same reason people have savings.

What strategies do they use?

Schools with larger endowments have more than they need for annual operations. That excess gives them an investing time frame of as as long as the school may exist. (Harvard was founded in 1636 and has no plans to close up shop.) "Eternity" is longer than even the staunchest buy-and-hold investor, but that doesn't mean there aren't lessons to be learned.