Cliff Asness & co. have crunched the numbers, and they’re the equivalent of several million gallons of cold water to the face and coffee at the same time.

Last year, the whiz-kids at AQR Capital Management ran their new streams of big data and everything else through the As-Bot and got an unpleasant surprise: Nothing was gonna return even 5% over the next five to 10 years.

For masochism or science or whatever, they decided to do it again this year. And while stocks outside of the U.S. broke the 5% barrier, it wasn’t exactly something to celebrate, least of all for AQR.

The improvements over last year are mainly due to cheaper prices after 2018’s annus horribilis. AQR expects a traditional 60/40 portfolio of U.S. assets to earn just 2.9 percent after inflation over the medium term, compared with a long-term average of 5 percent.

“These estimates are mostly higher than they were a year ago, but compared to historical norms, they remain soberingly low,’’ the firm wrote in a research note.

If only there were an investing superhero around who could get us out of this mess…

AQR Quants Gaze Into Crystal Ball, See ‘Soberingly Low’ Returns [Bloomberg]


People Still Launching Hedge Funds Faster Than They Can Fail

Well, the numbers are finally in for 2012 and it was, relatively speaking, a bloodbath for hedge funds, with more going to their grave or down the drain than in 2010 or 2011. But there were still 235 more hedge funds at the end of the year than at its beginning, because those who have previously shuttered a hedge fund due to their failure to raise/make enough money gave it another go last year. Look for more of the same this year, as fresh-faced and not-so-fresh-faced hedge fund managers hang out a new shingle for a few months, only to find out that investors are only interested in having Ray Dalio manage their money.