
Cliff Asness, co-founder and chief investment officer of AQR Capital Management, joins Jim O'Shaughnessy on Infinite Loops to discuss quantitative investing, market anomalies, and behavioral finance. Asness reflects on prospect theory, noting how losses affect him more profoundly than gains please him. He recounts aggressive communication strategies during AQR's challenging periods, particularly when losses stem from market irrationality rather than fundamental issues. The conversation explores the GameStop saga and meme stock phenomenon, with Asness expressing concern over the gamification of trading and its potential impact on young investors. They delve into the complexities of leverage, illiquid assets, and the risks associated with strategies like the basis trade, and also discuss the role of machine learning in quant investing.
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