“Never has a venial sin been punished this quickly and violently,” says Cliff Asness of AQR, the quantitative-investing giant that manages around $185bn. Back in November, AQR began increasing its exposure to value stocks on the basis that they then looked exceptionally cheap compared to the wider market – despite the firm’s long-standing principle that trying to time the market in this way amounts to an investing “sin” (because market timing is hard to get right and likely to backfire).
Thankfully, “we only sinned a little”, by increasing exposure a small amount. That turned out to be very fortunate, because the timing of AQR’s decision could not have been worse.
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