Orion's The Weighing Machine

Cliff Asness of AQR - Balancing Risks and Rewards for a Quantitative Approach

Nov 19, 2024
Cliff Asness, co-founder of AQR Capital Management and a leading voice in quantitative finance, dives into the evolving world of investing. He discusses the shift towards passive investing, market inefficiencies, and the merits of high-volatility alternatives. Cliff emphasizes how disciplined investors can leverage these inefficiencies for better returns and shares strategies to navigate behavioral biases. He reflects on the journey of building AQR, highlighting the importance of diversification and continuous learning in the investment landscape.
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INSIGHT

From Academia To Applied Quant Investing

  • Cliff Asness transitioned from academia to industry by taking a research role at PIMCO then Goldman Sachs before co-founding AQR.
  • Luck, opportunity, and applying academic work to markets shaped his early career path.
ANECDOTE

Dissertation, Work, And Four Kids

  • Asness wrote his dissertation while working at Goldman and PIMCO, juggling family life with four children in short periods.
  • He recalls those intense stretches as hard then but rewarding in retrospect.
INSIGHT

Markets May Be Less Efficient Than Before

  • Asness argues markets feel less efficient now, especially across medium horizons of about three to five years.
  • He links episodic extreme mispricings to technology, social media, and changes in investor behavior.
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