Cliff Asness

Weekend Reading: Charged With Obstruction

No! I am not talking about President Trump but rather the crash in both Technology stocks, and Oil prices, which are obstructing the continuation of the “bull market.”

"Last Time US Stocks Were So Expensive, This Happened"

The best argument for avoiding US stocks is simple: valuation.  Using the Shiller PE Ratio (price divided by a 10 year lookback at earnings), domestic equities trade for 29.9x earnings versus a long run average of 16.7x.  The last time they were this expensive was early 2002, or 15 years ago.

Dave Collum's 2016 Year In Review - "And Then Things Got Really Weird..."

"Markets don’t have a purpose any more - they just reflect whatever central planners want them to. Why wouldn’t it lead to the biggest collapse? My strategy doesn’t require that I’m right about the likelihood of that scenario. Logic dictates to me that it’s inevitable..."

Bullish Or Bearish - This Is The Real Risk

"As a money manager, I am currently long the stock market. I must be, or I potentially suffer career risk. However, my job is not only to make money for my clients, but also to preserve their gains, and investment capital, as much as possible... The real risk to investors is not “missing out” on a further rise in the markets, but catching the bulk of the reversion that will wipe out most of the gains from the previous advance."

Low-Volatility Stocks At Risk As Credit Cycle Ends, UBS Warns A Crash Is Coming

UBS' Paul Winter believes we are witnessing the end of the credit cycle - earnings growth rates are flat, and the stock market impact has been increasing. Importantly, from a risk perspective, Winter warns that Systemic Risk is rising, and Economic Policy Uncertainty has hit all-time highs, warning that the key risk today lies in low-volatility stocks and the broad market's equity risk premia - "either earnings need to pick up dramatically, or alternately, equities would need to correct by around 20% to bring the equation back into equilibrium."

Teachers Unions Vs Hedge Funds: The Battle Over Billions

Randi Weingarten is the president of the American Federation of Teachers, and is a name Wall Street is beginning to know quite well. Since the beginnging of her reign in 2013, having sifted through the personal charitable donations of hedge fund managers, focusing on those who want to end defined benefit pensions, and entities backing charter schools and the overhauling of public schools, she implemented a 'suggestion' to Teachers' pension fund adminstrators that if asset managers don't support unions, the unions won't invest with the funds. Some hedge fund managers - with exceptional return records - did not take kindly to her 'influence'.