Cliff Asness: Timely & Timeless Investment Wisdom | #528
Today's guest is Cliff Asness, co-founder, managing principal and Chief Investment Officer at AQR Capital Management. In today’s episode, Cliff & I start by talking about some quotes he may or may not have said in the past. Then we kick around a bunch of topics. We talk about diversifying by both asset class and geography, the challenge of managing short-term expectations while keeping a long-term perspective, and how AQR is implementing AI and machine learning in their investment process.
Key Points
- Cliff Asness discussed the potential benefits of leveraging a diversified portfolio and indicated that even Warren Buffett could have improved his returns by diversifying and adding bonds to his equity-heavy investment strategy.
- Asness highlighted the importance of diversification in investing, cautioning against concentrating all investments in a single asset class such as the S&P 500, and suggested that true diversification should extend beyond market cap-weighted indexes to include a variety of global assets and investment strategies.
- The conversation touched on the evolving role of AI and machine learning in finance, with Asness expressing the view that while these technologies can improve investment processes, they are evolutionary rather than revolutionary and won't drastically change the understanding of fundamental investment concepts like the equity risk premium.
Learn more about Cliff:
Twitter: https://twitter.com/cliffasness AQR: https://www.aqr.com/About-Us/OurFirm/Cliff-Asness-Bio
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For detailed show notes, click here: https://mebfaber.com/2024/04/05/cliff-asness/
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Sponsors:
Today’s episode is sponsored by The Idea Farm: https://theideafarm.com/. The Idea Farm gives you access to over $100,000 worth of investing research, the kind usually read by only the world’s largest institutions, funds, and money managers. Join today and get access to quarterly CAPE ratios, an excel quant backtester and the entire research library. To learn more about our products and follow us, subscribe to our mailing list: https://theideafarm.us1.list-manage.com/subscribe/post?u=6750faf5c6091bc898da154ff&id=7249739cdb
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Past guests include:
Ed Thorp: https://mebfaber.com/2017/02/08/10017/ Richard Thaler: https://mebfaber.com/2021/08/04/e337-richard-thaler/ Jeremy Grantham: https://mebfaber.com/2021/02/08/episode-286-jeremy-grantham-gmo-what-day-is-the-highest-level-of-optimism-its-the-day-the-market-hits-the-peak/ Joel Greenblatt: https://mebfaber.com/2020/10/28/episode-260-joel-greenblatt-gotham-asset-management-nine-out-of-ten-families-in-the-top-fifth-of-the-income-chain-have-retirement-savings-nine-in-ten-in-the-bottom-fifth-have-none/ Campbell Harvey: https://mebfaber.com/2019/08/28/episode-172-cam-harvey-this-is-a-time-of-considerable-risk-of-a-drawdown/ Ivy Zelman: https://mebfaber.com/2022/03/30/403-ivy-zelman/ Kathryn Kaminski: https://mebfaber.com/2021/05/12/e310-kathryn-kaminski/ Jason Calacanis: https://mebfaber.com/2017/08/30/episode-69-jason-calacanis-little-secret-way-dark-art-becoming-truly-wealthy-massive-wealth/ Whitney Baker: https://mebfaber.com/2022/01/31/e387-whitney-baker/ Aswath Damodaran: https://mebfaber.com/2019/05/10/episode-155-aswath-damodaran-they-uber-and-the-ride-sharing-companies-collectively-have-disrupted-this-businessthats-the-good-news-the-bad-news-is-i-dont-thin/ Howard Marks: https://mebfaber.com/2018/10/03/episode-124-howard-marks-its-not-what-you-buy-its-what-you-pay-for-it-that-determines-whether-something-is-a-good-investment/ Tom Barton: https://mebfaber.com/2018/10/10/episode-125-tom-barton-the-biggest-problem-investors-have-is-things-changeand-they-dont-change/
… and many more.
Meb's invested in some awesome startups that have passed along discounts to our listeners. Check them out here: https://mebfaber.com/mebs-deals/
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Transcript
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