Money Talks: The king of quants
Money Talks from The Economist
The Economist
4.4 • 1.2K Ratings
🗓️ 16 February 2023
⏱️ 42 minutes
🧾️ Download transcript
Summary
Quantitative investors are known for their cool, mathematical approach to investing. They build models which search for patterns across huge data sets to discern where they should invest. The frenzied “bubble in everything” wrongfooted many quants in 2020–but the stock markets return to Earth, which crippled many traditional funds, generated huge returns for the quants in 2022. Nowhere was this clearer than in the performance of AQR Capital Management, a quant fund run by Cliff Asness. Its long-running strategy returned 43.5% last year, net of fees.
On this week’s podcast, hosts Alice Fulwood, Tom Lee-Devlin and Mike Bird speak to Cliff Asness, the co-founder and chief investment officer of AQR, one of the world’s biggest quant fund managers. He tells them why he’s more open than his competitors and what still keeps him up at night. Sign up for our new weekly newsletter dissecting the big themes in markets, business and the economy at www.economist.com/moneytalks For full access to print, digital and audio editions, subscribe to The Economist at www.economist.com/podcastoffer
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Transcript
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| 0:00.0 | Money talks from the economist is sponsored by Invest Puerto Rico. |
| 0:06.0 | More than just a Caribbean paradise, Puerto Rico is a business powerhouse. |
| 0:11.0 | This U.S. territory is a fast-growing hub for innovators. |
| 0:15.0 | Puerto Rico boasts numerous tax credits, business incentives, |
| 0:19.0 | and world-class talent that take your business to the next level. |
| 0:23.0 | Find out why at InvestPR.org. |
| 0:26.0 | Gamechangers, welcome home. |
| 0:31.0 | Last week, I sat down with Cliff Asnes, the co-founder and chief investment officer |
| 0:39.0 | of AQR Capital Management, one of the biggest quant fund managers in the world. |
| 0:43.0 | Cliff Asnes, welcome to Money Talks. |
| 0:46.0 | Thank you for having me. |
| 0:47.0 | His firm makes investment decisions using data, algorithms, |
| 0:51.0 | and quantitative models that try to eliminate bad decisions that arise |
| 0:55.0 | from human emotion or biases. |
| 0:59.0 | Investors have entrusted AQR with about $100 million in assets |
| 1:03.0 | to manage using those principles. |
| 1:09.0 | Instead of picking stocks based on, say, what a CEO is planning, |
| 1:13.0 | the algorithms his firm has built look for patterns, evaluations, |
| 1:17.0 | or other metrics in search of what quant school signals. |
| 1:21.0 | These signals form the basis of their investment decisions. |
| 1:26.0 | The firm was launched 25 years ago to follow this quantitative |
| 1:31.0 | rather than qualitative approach to investing. |
... |
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