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B. G., Opalesque Geneva: On the 1st of April, Cliff Asness, managing and founding principal of AQR, published an interesting list of 13 sets of contradicting beliefs held by investors, about which he has written over the years. He then asks his readers if he is missing anything.
Here is the list in his own words:
1) International diversification stinks for U.S. investors…
…but is fantastic for non-U.S. investors in perpetuity, as the U.S. will always win.
2) Not owning the bad companies (however you define ESG) is making the world a better place…
…but shorting them doesn't work even better.
3) Investing in privates makes us more patient, better investors because, even though we know prices are changing constantly, we don't have to see or acknowledge them change…
…but even after we say that quiet part out loud, this self-deception somehow still works for us.
4) Illiquidity is a "bug" that investors in private assets should get a return premium for bearing, as you get paid for putting up with a "bug"…
…but illiquidity is also something that makes private assets easier to hold (a "feature"), and that benefit should be free and not impair the premium at all...................... To view our full article Click here
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