Cliff Asness

Cliff Asness Has A Lot Of Problems With You People

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 »

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.

Former Diamondback Capital analyst and insider trader Jesse Tortora actually wrote this:

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 »

“The only way to finance a big European-style state is to have it paid for by massive taxation of everyone, mostly the middle class. Right now, we are avoiding honest debate on this fact…The first truth is that the current tax rates cannot support the promises made to middle-class Americans. The most unaffordable items in fiscal projections are Social Security for everyone and government-sponsored health care for the middle class. You cannot preserve these even with Draconian slashing of military, infrastructure, welfare, education, and other expenditures. The second truth is that you cannot pay for the Life of Julia, or any vision of a cradle-to-grave welfare state, without massive and increasingly regressive middle-class taxes. The poor don’t have the money to pay for a European-style welfare state, and the rich, rich as they are, don’t have anywhere near enough. Not only that, it’s easy to tax middle-class assets and transactions — things like payrolls, sales, and real estate — but soaking the rich means taxing investments. Investments are complicated and can be restructured to minimize taxes. Also, investments are the lifeblood of economic growth. Raising significantly more taxes from the rich also requires higher marginal tax rates — and their rates are already quite high. High marginal rates distort the economy and yield less revenue than anticipated because they increase the rewards for legal and illegal tax avoidance…to achieve anything like the European-style entitlement state they advocate, we need to tax everyone a lot more, not just the 1 percent. Despite all the drum circles protesting the inequitable distribution of resources, the wealthy just don’t have enough. The middle class and even the poor must step up to carry more of the burden if this is our desired endgame.” [The American via Heidi Moore, related]

Exhibit A:

Friday morning at AQR, August 10. Cliff Asness glanced pensively at a candy-colored array of Marvel superhero figurines lined up along his east-facing window. Spiderman. Captain America. The Hulk. Iron Man. Comic book heroes of his boyhood days on Long Island.The Quants, by Scott Patterson, page 100.

“Hedge funds charge far too much in general by claiming to be geniuses,” says Asness, lounging on a sofa in his corner office, surrounded by foot-high plastic models of comic book heroes like Captain America and Spider-Man.  Fortune, December 19, 2011

As a child, Clifford Scott Asness gave no sign of his future as a Wall Street tycoon. He was born in October 1966 in Queens, New York. When he was four, his family moved to the leafy suburban environs of Roslyn Heights on Long Island. In school Asness received good grades, but his interest in Wall Street didn’t extend beyond the dark towers of Gotham in the pages of Batman. Obsessed with little besides girls and comic books, Asness was a listless teenager, without direction and somewhat overweight. At times he showed signs of a violent temper that would erupt years later when he sat at the helm of his own hedge fund.The Quants, by Scott Patterson, page 12.

“His super-villains are intellectual dishonesty and ignorance,” says Jonathan Beinner, a managing director at Goldman Sachs Group Inc. and a former classmate of Asness. “When someone offers an opinion that Cliff feels is incorrect or dishonest, whether it be related to investments, politics or pizza, he feels it is his duty to stand up, even if it’s not in his best interest.” Asness admits to a superhero complex. His favorite Marvel comic book character is Captain America, who gains strength with the help of a secret serum and whose shield can be used as an indestructible weapon. Asness has an image of the shield tattooed on his left arm.Bloomberg Markets Magazine, October 7, 2010

Exhibit B:
Read more »

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 »

Robert C. Jones is also a devoted practitioner of transcendental meditation. Now that he has his own firm, System Two Advisors L.P, he’ll promote “TM” among his employees, and fellow quants. “‘This would be good for you,’ he told me. He knows I’m kind of tightly wound,” says Mr. Asness, who’s known for tantrums involving smashed computer screens, and who says he would consider meditation if it could be done competitively, like investing. [WSJ, related]