Surprise, surprise: Low-key investment funds that diversify their portfolios across asset classes to protect them for the long term are again proving their value. So-called “risk parity” funds—run by prominent investment firms like Bridgewater Associates, AQR Capital Management and Invesco—are up an average of 3.3 percent through March, according to data from Morningstar, easily beating returns for stocks and bonds. That also is better than a classic 60-40 percent stock-bond allocation, which gained 1.87 percent in the first quarter. [NetNet]
The AQR chief has made clear that there are many things he doesn’t like: Democrats. The real Warren Buffet when a robotic alternative is available. College professors talking to him when he’s enjoying a bottle of wine. But these, friends, are just the beginning.
Saying I have a pet peeve, or some pet peeves, just doesn’t do it. I have a menagerie of peeves, a veritable zoo of them.
And now, you’re gonna hear about them. Or some of them, for, unluckily for readers, rather than writing a book-length airing of grievances like some other prominent hedge fund manager might, to say nothing of attempting to equal his ideological lodestone in verbosity, he plans to strictly limit himself to 10 for the purposes of this Financial Analysts Journal article, which runs a mere eight pages (nine including footnotes).
Luckily for readers, I will restrict this editorial to only those related to investing (you do not want to see the more inclusive list) and to only a mere 10 at that.
And that 10 will be a subset of the extremely stupid things Cliff Asness is forced to hear on a daily basis. And even then, he will restrain himself in mowing down the piffle that puts him in a bad mood. Read more »
Ringleader Of Insider-Trading “Fight Club” Didn’t Want Any Sarcastic Comments With His Inside InformationBy Matt Levine
I suppose in like 1985 there were people who worked on Wall Street and un-self-consciously ate cheeseburgers for breakfast, got shoeshines at their desks, went to strip clubs every night, and slammed down their phones hard enough to break them, but my assumption is that in 2013 any remaining “stereotypical Wall Street behavior” is mediated through popular culture. Some people go into finance with the goal of having a memoir that reads exactly like Liar’s Poker,1 and no one wears contrast-collar shirts because they look good. You wear them – if you do (do you?) – because you saw them in that movie.
In 2009, Tortora e-mailed a group that included Abbasi and Adondakis: “Rule number one about email list, there is no email list, fight club reference. Rule number two, only data points can be sent, no sarcastic comments. Enjoy. Your performance will now go up by 100 percent in 09 and your boss will love you. Game theory, look it up.”
Look it up, yo. That’s also from Bryan Burrough and Bethany McLean’s amazing Vanity Fair article on the endless pursuit of Steve Cohen, and while the fact that Tortora and his crew of cheeseballs called themselves “Fight Club” has been reported before, the fact that Tortora had to remind them of it BY SAYING “FIGHT CLUB REFERENCE” AFTER HIS FIGHT CLUB REFERENCES is new to me and makes me ashamed to be a human.
Why did these tools insider trade? Read more »
Do you want to invest like Warren Buffett? Sure you do. You know who will tell you how? Strangely, some guys at AQR:*
[W]e create a portfolio that tracks Buffett’s market exposure and active stock-selection themes, leveraged to the same active risk as Berkshire. We find that this systematic Buffett-style portfolio performs comparably to Berkshire Hathaway.
They acknowledge that Robo-Buffett doesn’t incur transaction costs that flesh-Buffett does (because R.-B. is as of yet just a simulation) but, that aside, “comparably” is an understatement:
Whee! Go Robo-Buffett! Who, intriguingly, looks a lot like … AQR: Read more »
Cliff Asness Wants To Be Thanked For Paying Taxes, Is Pissed Cash For Clunkers Didn’t Involve Killing NazisBy Bess Levin
Something you may or may not know about Cliff Asness is that by day, he is a hedge fund manager but by night he is the second coming of his hero, Captain America. Like the Captain, the AQR founder believes his duty is to defend America, only instead of fighting Axis Powers, Asness’s enemies are liberal Commie Socialists hell-bent on destroying this country. Because his shield has been in the shop for repairs for the past couple years, Cliff has been forced to use other weapons to pummel his foes, namely writing amazingly witty1 emails to his friends and colleagues about how much Obama et al suck. Most recently, Captain Asness circulated “Some Useful Definitions to Understand Our Modern Progressive World,” a little glossary of unalphabetized terms he put together sure to cut his adversaries deeply. (The Captain also helpfully pointed out in a footnote that many of the definitions were “written sarcastically as a faux left-winger, [while] some [are] just conservative/libertarian interpretations of what the left really means,” in case that was lost on his audience.) They include: Read more »
Earlier today, Politico ran a story titled “Can Chuck Schumer win back Wall St. for Democrats?” Apparently the New York Senator recently “embarked on a fence-mending campaign with senior Wall Street executives, many of whom have grown furious with the Democratic party,” in a charm offensive that has included “holding private dinners [including one put on by Pershing Square manager Bill Ackman], organizing high-end fundraisers for Democratic candidates and quietly pressing for super PAC donations.” According to Politico, “the outreach appears to be working: Hedge fund and private-equity executives have held six different fundraisers for Democratic challengers and senators at Schumer’s request, sources say.” Some financial services employees, however, are not so easy. Take Cliff Asness for example. The AQR manager happened to read the piece and here’s what he had to say about it: Read more »