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.
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TOPICS:
00:00:00 - Introduction
00:05:30 - Choosing between Wharton, Chicago, and Stanford
00:15:49 - Discovering Momentum
00:20:53 - Joining Goldman Sachs Asset Management
00:31:34 - The Evolution of Investment Models and Strategies
00:36:45 - The Value of Small Bets and Diversification
00:42:10 - The Importance of International Diversification
00:52:23 - The Inevitability of Being Wrong
00:57:28 - The Definition of Risk
01:08:06 - Lessons from Dealing with Media
01:18:26 - Philanthropy
01:23:23 - General Information and Disclaimer
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