Five Minutes with
Clifford Asness, MBA ’91, PhD ’94
Image by Matthew Gilson
What do you consider your greatest accomplishment?
Keeping our firm together during a disastrous start, and then being right about the bubble of 1999. We were putting our money where our mouth was, risking our financial lives and convincing others to do so, which was equally important because if nobody believes you, it doesn’t matter if you’re right.
Also, having two sets of twins in a year and a half.
What’s been your most humbling experience?
Go back to the previous answer. When you are on the floor cleaning up something rather disgusting at 3 a.m., it is very hard to feel like a master of the universe!
Professionally, though, it’s the flip side of the same bubble. Losing clients a ton of money in the first year and a half we were in business, even though we were eventually proven right and eventually made them more than that back, losing that was a very humbling experience—humbling in terms of realizing that markets may not be smarter than you, but can beat you to death even if you are smart. Markets are humbling things to try to beat, and managing other people’s money is a real responsibility. When you don’t do it well, it’s not easy to have to go back to them and explain yourself .
What do you wish you had known at the start of your career?
That very early success can go to the most level head. When we left Goldman, I probably didn’t think we could ever have as bad a start as we had.
And no matter how successful you may think you are, you’re very dishonest if you don’t acknowledge a lot of luck along the path. I think people writing an autobiography often make it seem like “it had to happen” based on some characteristic of theirs, and a lot of times they indeed have characteristics that are conducive to something good happening. But if you ever do something that ends up being extremely successful in any way, you probably got lucky along the way in some aspect. I think that’s an important lesson.
What’s the hardest part of your job?
If there’s anyone on earth who should grasp statistics work with regard to a portfolio like ours, it’s me. I’m not saying I’m better than other people, I just do it full time. And I’m still mad every day we don’t go up. And we go up only a small but important fraction over 50 percent of the days. I still take it personally. I still ride every blip. I don’t do anything about it because I believe in our models, and I believe our models are better than me. And the way you screw up investing like this is to tinker when you’re having a bad day or week or month. But I am way too emotionally invested in the daily movements, based on my knowledge. I will go home in a bad mood if we lost money that day.
What’s the best part of your job?
No one answer. Doing well for clients who’ve trusted us; watching young people here develop and being able to permanently influence their careers; the immense intellectual— and emotional—challenge posed by the markets. There are lots of good parts.
If you had to choose another line of work, what would it be?
I’d like to go back and study for a PhD in history—American history, European history. I’m pretty much of an avid historical fiction and nonfiction reader. Now if life had taken a different path, I probably would have been a trial attorney; a lot of my family was. That’s where I would have ended up. I do like to argue, but I’m pretty happy that my life took a different turn.—P.H.