I Can’t Define Short-Term Silliness But, Like Justice Stewart, I Know It When I See It

Updated on

I Can’t Define Short-Term Silliness But, Like Justice Stewart, I Know It When I See It by Cliff Asness, AQR

There is just way too much focus on short-term performance. The media write about it constantly, and investor flows in aggregate (not everyone!) seem to follow it too much. We certainly enjoy these stories and flows a lot more when they are in our direction (not a bad picture either, considering the source material), and certainly believe the recent inflows highlighted are a good long-term allocation (that’s mighty big of us, no!?). But we remind everyone that these decisions should be occasional, based on long-term assessments (and even if based on a tactical view, last month’s performance isn’t a great place to start!), and revised rarely. Good strategies will have bad years or even bad multi-year periods, and conversely bad ones will often shine in a world with so much short-term randomness. We (and all other managers, as we’re all in the same boat) are not as good as many implicitly believe when we did great last month (or year or even sometimes longer), and certainly not as dumb as some will think after bad times.

Just a friendly reminder to keep our eyes on the long-term prize.


 

  • This material contains the opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Please note that changes in the rate of exchange of a currency may affect the value, price or income of an investment adversely.Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions, there can be no assurance that actual results will not differ materially from expectations. Past performance is no guarantee of future results. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from AQR.

    Information contained on third party websites that AQR Capital Management, LLC, (“AQR”) may link to is not reviewed in its entirety for accuracy and AQR assumes no liability for the information contained on these websites.

  • AQR Capital Management, LLC, (“AQR”) provide links to third-party websites only as a convenience, and the inclusion of such links does not imply any endorsement, approval, investigation, verification or monitoring by us of any content or information contained within or accessible from the linked sites. If you choose to visit the linked sites, you do so at your own risk, and you will be subject to such sites’ terms of use and privacy policies, over which AQR.com has no control. In no event will AQR be responsible for any information or content within the linked sites or your use of the linked sites.

Leave a Comment