Part 8/9:
Addressing prevalent practices within the hedge fund industry, Asness critiques high fees that often fail to deliver commensurate value. Reflecting on AQR's own pricing structure, he believes that many hedge funds struggle to justify traditional fee models given their market correlation, advocating for more transparent and advantageous pricing strategies.
As an investor, Asness warns against common pitfalls, such as a failure to maintain an appropriate time horizon, overlooking portfolio consistency, and mistaking price changes for inherent truths about value. He emphasizes the tendency for investors to focus on short-term momentum instead of recognizing longer-term trends, which can lead to erroneous strategies.