Capital Allocators – Inside the Institutional Investment Industry Top 5 of 2024: #3: Cliff Asness - EP.385
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Jan 1, 2025 
In this engaging discussion, Cliff Asness, the innovative mind behind AQR, dives into his amusing journey through academia and the investment world. He challenges the myth of perfect market efficiency and discusses the nuances of AI in finance, likening it to the strategic depth of Go. Asness also tackles the rise of pod shops, sharing insights on managing investor expectations. The conversation is peppered with humor, as he reflects on personal hobbies like comic book collecting and the intricacies of navigating modern streaming frustrations.
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Early Life and Academic Journey
- Cliff Asness, despite high standardized test scores, was an underachiever in high school, earning B's and C's.
- He embraced a more serious approach to academics in college, overcoming initial anxieties and excelling.
Path to AQR
- Cliff Asness's career path, influenced by his father, started with a dual degree in computer science and finance at Penn.
- This led to a PhD at the University of Chicago under Eugene Fama and eventually to Goldman Sachs and founding AQR.
From Market Efficiency to Inefficiency
- Even Eugene Fama acknowledges that markets are not perfectly efficient.
- Asness's dissertation explored momentum strategies, challenging efficient market hypotheses, with Fama's encouragement to follow the data.