AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Excess Returns
Bigger Extremes, Better Returns | Cliff Asness on the "Less Efficient Market Hypothesis"
Nov 20, 2024
Cliff Asness, founder of AQR Capital Management and a leading voice on market efficiency, dives into the intriguing concept of the 'Less Efficient Market Hypothesis.' He discusses how social media and constant connectivity might be fueling market extremes. Through humor and insight, Asness explores the implications of passive investing and its distortion of market dynamics. He advises on the importance of intuition in factor investing, inflation's effects on markets, and shares valuable tips for individual investors navigating today's volatile landscape.
01:15:57
Episode guests
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- Market inefficiency presents both challenges and opportunities for investors, suggesting that rational strategies could yield better long-term returns despite greater difficulty during swings.
- Market psychology significantly influences investor behavior, leading to extreme valuations that are exacerbated by social media and constant connectivity, urging a long-term perspective amidst short-term irrationality.
Deep dives
Market Efficiency and Investment Strategies
Markets may be less efficient than in the past, presenting both challenges and opportunities for investors. This inefficiency does not imply that markets are grossly inefficient; instead, it suggests that rational investing strategies might yield better returns over time. Historical phenomena, such as the dot-com bubble and the recent growth-value disparity, indicate that valuation extremes can present pain for investors sticking with rational strategies. Therefore, those committed to rational investing could potentially reap larger rewards, albeit with greater difficulty during market swings.
Get the Snipd
podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any
moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share
& Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode