Buffer BS

+ Cliff Asness, Carson Block, Morgan Housel, Jason Zweig, Mohnish Pabrai, Apollo & More

Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.

John Kenneth Galbraith

Research

Cliff Asness follows up on AQR’s recent piece, which was critical of options-based strategies such as "defined outcome funds" and "buffered ETFs". He addresses the six main criticisms of the original piece and offers a theory for why an industry that lacks compelling data and economic rationale to support it still has diehard fans.

Apollo shares charts with brief commentary explaining the shrinking role of banks, the evolution of public and private markets, and the impact of tariffs on corporate borrowing.

Man Group reiterates the benefit of focusing on the fundamental concepts of diversification, volatility-based exposure management and systematic risk overlays to safeguard the tail.

Source: Bloomberg, MSCI, Man Group Database. Date range: Jan 2019 – Apr 2025.

Despite weaker public equity market returns and GDP growth since 2000, European private equity returns have outperformed U.S. PE returns during the same period. Davidson Kempner believes the factors driving private market outperformance—less capital chasing deals and more potential for “operational alpha”—will persist for the foreseeable future.

Bonus Content

Jason Zweig says be wary of alternative funds that cost too much, disclose too little and are higher risk than they sound. Link

Morgan Housel wrote about managing expectations. Link

A cybercrime group stole a quarter billion worth of crypto. Thanks to $500,000 bar tabs and a mysterious kidnapping attempt, they were caught in less than a month. Link

An analysis found that investors in funds with the most volatile cash flows earned significantly less than investors in funds with stable flows. Link

Podcasts

5/9/2025 - 89 minutes

Short-seller Carson Block discusses how activist short-sellers expose fraud, some of his biggest shorts, the problem with CEO compensation, and more.

5/1/2025 - 47 minutes

Former Brown endowment chief Joe Dowling covers how colleges allocated such a large amount to alternative investments and the pressures they’re facing today as a result.

5/9/2025 - 82 minutes

Investor Mohnish Pabrai explains his long-term, value-focused investment strategy, which emphasizes simplicity, conviction, and patience.

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