Cliff Asness on Marvel vs. DC and Why Never to Share a Gym with Cirque du Soleil (Ep. 5 — Live at Mason)

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On momentum and value investing

If your car worked like this, you’d fire your mechanic, if it worked like I use that word. I think it is harder than you might guess, even if something works long term, to have it go away because a lot of investors can’t live through the bad periods. They decide why it’s never going to work again at the wrong time.

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On less than perfect market efficiency

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I take the other side from [Fama and French]. I love these guys. We agree on 9 out of 10 things. I don’t see how momentum is not their sixth factor. It adds a tremendous amount of return versus their model.

On the inscrutability of risk

If it’s a good measure of risk, it doesn’t just hurt occasionally. It hurts you when it hurts to be hurt.

On debt and diversification

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On the next bubble, or lack thereof

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On things under- and overrated

COWEN: Spider‑Man versus Batman? Who wins that fight?

ASNESS: Batman wins every time, because unlike most superheroes, he cheats violently.

On small-time investing

On the fairness of high frequency trading

High frequency trading has made the world more just and fair, particularly for small investors.

Credit: Nick Donner Photography

On how well hedge funds hedge

In some parts of the world, if you said, “my daddy runs a hedge fund,” I’d say, “what’s a hedge fund?” In Greenwich, Connecticut, the kids say, “what kind of hedge fund is your daddy running? Is he event arbitrage? Trend following? What does dad do?”

“I will never get an economic law named after me. I gave that up when I went to try to make money. If I got one, I’d want it to be: There’s no investment process so good that there’s not a fee high enough that can’t make it bad.”

On Ayn Rand

On training up a child

My parents shared that way too much with me. I’ve told them that. I had a sense of impending doom as a child that I think was oddly a positive for achievement. It made me very focused on not being nervous about those kind of things, but doesn’t make you a happy, relaxed person and is impossible to turn off after it’s no longer useful.

I think the thing people don’t appreciate is how dangerous things are that you think protect you, but only mostly protect you.

Q&A

Credit: Nick Donner Photography

I’ve done well…[b]ut if I wanted to go build a Batcave at my house, it would take approximately 600 times my wealth, and everyone would know about it.


Conversations with Tyler

A podcast in which esteemed economist Tyler Cowen engages with today's most underrated thinkers in wide-ranging explorations of their work, the world, and everything in between.

Mercatus Center

Written by

The Mercatus Center at George Mason University is the world’s premier university source for market-oriented ideas.

Conversations with Tyler

A podcast in which esteemed economist Tyler Cowen engages with today's most underrated thinkers in wide-ranging explorations of their work, the world, and everything in between.