The Long View Cliff Asness: ‘The Problem Was Never Beta. The Problem Was Paying Alpha Fees for Beta’
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Jul 29, 2025 
Cliff Asness, founder of AQR Capital Management and a renowned voice in financial research, returns to discuss pressing economic issues. He critiques the impact of tariffs and stagflation on investment strategies, advocating for diversification and uncorrelated assets. The conversation takes a humorous detour into the absurdities of meme coins while emphasizing the enduring value of well-chosen investments. Asness also examines the ongoing debate between value and growth stocks and explores the transformative role of AI in quantitative investing.
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Tariffs as Taxes Shrink Prosperity
- Tariffs act as taxes on buyers, reducing global prosperity and shrinking the economic pie.
- While some winners and losers emerge, collectively tariffs make everyone poorer.
Use Alternatives in Stagflation
- In stagflation, traditional stocks and bonds suffer, so allocate to uncorrelated alternatives as a diversifier.
- Trend-following strategies historically perform well during extended tough market periods and stagflation.
Flaws in Missing Best Days Argument
- Missing the market's best or worst days symmetrically impacts returns, debunking the 'miss best days' market timing argument.
- Market timing should only be attempted proportional to skill and with consideration of costs and diversification risks.