Hi SmallBalIs, Truzaar Dordi here. I'm a Ph.D. Candidate in climate finance and a member of Fossil Free UW. First, thanks for engaging in this conversation and for asking great questions. I just want to make a couple of quick points in addition to u/actualpeach_.
First on the study of potential losses; yes 2014 was a particularly bad year and the industry does undergo periods of growth and contraction. However, research by Trinks and Scholtens (2018) finds that as far back as 1927 to 2016, "fossil fuel company stocks do not outperform other stocks on a risk-adjusted basis and provide relatively limited diversification benefits". That is, the industry generally trails the market. The potential losses analysis took several liberties, assuming for example that the University invested in all fossil fuel companies equally - of course, this is open to critique, but the takeaway is, it is quite likely the University did lose some money over that period. In fact, research from the Canadian Center for Policy Alternatives estimates that Canadian pension funds collectively lost over 5.8 billion dollars in that commodity downturn. Nevertheless, there is a research gap in performance between 2016 to 2020 that's ripe for future research!
Second, on the point of easy money by shorting stocks - yes this is a viable investment strategy, however, it is a riskier strategy than investing in a diversified portfolio. The University's endowment and pension fund (like many institutional investors) are highly risk-averse and often have highly-diversified and long-term portfolios that are representative of global capital. Thus, it's even more important to have a long term perspective when making these investment decisions.
Thanks again for coming in with an open mind. It sounds like you have some good ideas and questions. I encourage you to attend our upcoming panel discussion hosted by the Interdisciplinary Centre on Climate Change, this Monday, October 20, at 11 am - and I look forward to chatting more. https://uwaterloo.ca/climate-centre/events/unpacking-divestment-what-it-means-uwaterloo