Cliff Asness Will Try Anything Once, Including Gorging On Big Data

I mean, he also thought he’d like “Iron Fist," so he can be wrong.
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Attempts to make sense of the complexities of our benighted world are necessarily reductionist. “Alabama,” for instance, did not redeem America (as if such were possible) and save itself from further embarrassment last night. Non-white Alabama did (again, to the extent that such was done at all). There’s really no such thing as a unified body of bitcoin marks: Crypto-enthusiasts have some radically different ideas about what fake currencies ought to be (to the extent that things that don’t exist can really “be” anything).

IronAsness

And so it goes with the hottest of hot categories, quants. It certainly seems that this group is unified in its ceaseless pursuits of more data and more artificial intelligence, but this is in fact not the case. Take, for instance, superhero enthusiast Cliff Asness. Certainly, the AQR chief is a quant. But Asness is of the “factor investing” flavor of quant, which basically means that the only numbers he believes in are market numbers, and not “alternative data” like satellite photos or rising global temperatures.

“In the factor investing world we worry a lot about finding spurious patterns by data mining. In big data combined with machine learning this is even more dangerous because the data sets are so big and machine learning is so good at finding patterns,” Mr Asness said….

“You have to fight the next war all the time,” he said. “People doing this are probably occasionally finding good signals, but in a matter of months they are competed away.”

That said, what’s the harm in giving it a whirl?

That is now shifting, with AQR running several experiments to see whether it can find profitable patterns in markets using machine learning to parse through novel data sets such as satellite pictures of shadows cast by oil wells and tankers, according to Mr Asness.

“We’re feeling our way,” Mr Asness said. “If our first few experiments bear fruit, we’ll do more of them. If we find out we’re good at this, it will become a bigger part of AQR.”

AQR to explore use of ‘big data’ despite past doubts [FT]

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Chuck Schumer's Gonna Have To Do A Lot Better Than Dinner If He Wants A Piece Of Cliff Asness

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: From: Cliff Asness Sent: Tuesday, June 19, 2012 01:08 PM To: AQR lieutenants, other top hedge fund managers Subject: Can Chuck Schumer win back Wall St. for Democrats? Good title question. Only if Wall Street is so f---ing stupid as to defy credulity, honor, and morality. So, yeah, probably. Best line: “Chuck Schumer is pro-business". Yeah, ones that buy him off in explicit crony-capitalism, but he wants to regulate and tax to death ones that don't. Don Corleone was also pro-business. You guys say this stuff with a straight face huh? C p.s. Sorry about the multiple emails, merging lists (though that is probably not the thing that upsets people) While the above response should come as a shock to exactly no one, we don't think Schumer should give up on Asness so easily. The guy just wants to be wooed. Start with some limited edition action figures, add some $700 bottles of wine, and go from there.  You whip out a Mego Elastic Batman, he's listening. You show up with a a matching Captain America shield tattoo but instead of on your forearm it's on your face? He's nominating you for President. You're welcome.