151: Volatility Laundering in Private Equity, the Merits of International Diversification, Value Vs Growth and Systematic Investing - With Cliff Asness

Money Maze Podcast

Business, Investing, Management, News, Business News

4.8 • 216 Ratings

🗓️ 27 August 2024

⏱️ 78 minutes

🔗️ Recording | iTunes | RSS

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Summary

Simon introduces Cliff Asness, Co-Founder and CIO of AQR (Applied Quantitative Research), highlighting the firm's systematic approach to investing in a variety of assets.

Cliff Asness shared his background, mentioning that he was initially an underachiever in school but transitioned to a highly driven person during college at the University of Pennsylvania.

He explained that market efficiency is a spectrum, and even Fama admitted that markets are not perfectly efficient, despite what many might assume.

Discussing current markets, Asness emphasized the importance of global diversification and noted that the U.S.'s prolonged outperformance mostly stemmed from its increasing valuation premium over international markets.

He highlighted "volatility laundering" in private assets, where the infrequent marking of private investments creates an illusion of lower volatility, cautioning that this could lead to misinformed investment decisions.

Asness touched on philanthropy, saying he finds joy in charitable giving despite the difficulty in assessing the best use of funds and mentioned the importance of concentrating philanthropy for more impact.

The Money Maze Podcast is kindly sponsored by Schroders, IFM Investors and the World Gold Council.

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Transcript

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0:00.0	Welcome to the Wall Street Shuffle, in the money wrestle.
0:16.0	Welcome to the MoneyMays podcast. I'm Simon Brewerwer and along with my co-founder, Will Campion.
0:22.2	We created this show in 2020 to explore and unravel some of the mysteries surrounding the
0:27.4	investment and business worlds.
0:31.3	You need the luck to make a buck if you want to make money. You need the luck to make a buck if you want to be good.
0:42.7	Yeah. episodes are available on audio via our YouTube channels and we're available on audio via most podcast platforms and on video via our YouTube channel and we're active on all major social media
0:48.7	platforms to stay up to date with every episode please do sign up up to our newsletter at moneymasepodcast.com.
0:55.9	And we'd like to thank you for listening if we could ask one favour. We'd love you to tell a friend
1:00.8	or colleague about us. Thank you. Discipline, diversification and discovery might be the three
1:10.2	terms you'd apply to our guest and his firm today,
1:14.1	an organisation that has an explicit culture of exploring economics, data, statistics and technology
1:20.9	in order to improve their understanding of what drives markets and how it can be applied to client
1:26.3	portfolios.
1:30.4	In a world of competing approaches to investing,
1:35.4	such a systematic approach to constructing and managing portfolios isn't for everyone,
1:39.3	but the firm's reputation and execution and its admirers have earned a seat at the top table of global managers.
1:42.8	So today from Connecticut, it's a great pleasure to welcome
1:45.8	Cliff Asniss, co-founder and CIO of AQR, applied quantitative research. Cliff, welcome to the
1:52.2	Moneybase podcast. Thank you. I'm very happy to be here. Great. Well, I have, of course,
1:57.7	studied you, which gives me an early advantage. I read that you were an
2:02.0	underachiever at school. You're a happy-go-lucky child. You were a wise ass and a class clown.
2:08.0	Now, when did all that change? Well, somehow I have preserved the class clown part, I think.
	...

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