Cliff Asness on Bubbles, Private Equity and His Research Greatest Hits
Cliff Asness on Bubbles, Private Equity and His Research Greatest Hits  
Podcast: Excess Returns
Published On: Sat May 23 2026
Description: Cliff Asness returns to Excess Returns for a greatest hits tour through some of his most important and entertaining investing ideas.We discuss bubble logic, today’s AI market comparisons, why volatility still matters as a risk measure, private equity “volatility laundering,” international diversification, market timing myths, pulling the goalie, and how machine learning is changing quantitative investing.Cliff Asness on Xhttps://x.com/CliffordAsnessAQR Capital Managementhttps://www.aqr.com/Papers DiscussedBubble Logic: Or, How to Learn to Stop Worrying and Love the Bullhttps://www.aqr.com/Insights/Research/Working-Paper/Bubble-Logic-Or-How-to-Learn-to-Stop-Worrying-and-Love-the-BullRubble Logic: What Did We Learn From the Great Stock Market Bubble?https://www.aqr.com/Insights/Research/Journal-Article/Rubble-LogicMy Top 10 Peeveshttps://www.aqr.com/-/media/AQR/Documents/Insights/Journal-Article/My-Top-10-Peeves.pdfVolatility Launderinghttps://www.aqr.com/Insights/Perspectives/Volatility-LaunderingI Did Not Predict What Is Going on in Privateshttps://www.aqr.com/Insights/Perspectives/I-Did-Not-Predict-What-is-Going-on-in-Privates(So) What If You Miss the Market's N Best Days?https://www.aqr.com/Insights/Perspectives/So-What-If-You-Miss-the-Markets-N-Best-DaysInternational Diversification Works (Eventually)https://www.aqr.com/Insights/Research/Journal-Article/International-Diversification-Works-EventuallyInternational Diversification - Still Not Crazy after All These Yearshttps://www.aqr.com/Insights/Research/Journal-Article/International-Diversification-Still-Not-Crazy-after-All-These-YearsPerhaps the Most Important Essay I Will Ever Co Authorhttps://www.aqr.com/Insights/Perspectives/Perhaps-the-Most-Important-Essay-I-Will-Ever-Co-AuthorMain topics covered:How the dot-com bubble created its own internal logicWhy Dow 36,000 and Cisco message boards captured bubble thinkingWhat investors learned, and failed to learn, from the tech bubbleHow today’s AI market compares with the dot-com eraWhy long periods of underperformance make even good strategies hard to stick withWhy Cliff still defends volatility as a useful risk measureWhy “cash on the sidelines” is a misleading market narrativeHow private equity smoothing can make risk look lower than it really isWhy the private markets debate is not a short-term predictionWhy the “missing the best 10 days” argument against market timing is incompleteWhy international diversification can still matter after decades of US outperformanceWhat pulling the goalie can teach investors about risk, incentives and career riskHow machine learning changes quant investing without eliminating economic intuitionTimestamps:00:00 Why certainty is dangerous in investing04:58 Why Bubble Logic never became a book10:18 Cisco, Yahoo message boards and bubble psychology14:16 Rubble Logic and the lessons investors failed to learn18:04 What today’s AI market has in common with the dot-com bubble22:23 Why the long run can lie to investors26:02 Volatility, permanent loss of capital and real risk control30:19 Why there is no cash on the sidelines34:00 Private equity, smoothing and volatility laundering39:47 Why Cliff did not call the private markets downturn43:19 The flaw in the missing the best 10 days argument49:00 Why international diversification still works eventually53:35 Why crashes are global but lost decades are local57:30 Pulling the goalie and asymmetric risk01:01:00 Why coaches and investors avoid optimal decisions01:07:36 Machine learning, overfitting and economic intuition01:10:50 Leverage, short selling and derivatives in quant portfolios01:16:26 Where to follow Cliff Asness