Key ideas from Cliff Asness

• Prospect theory is very real - good years feel about a third as good as equivalent bad years feel bad, affecting even quantitative investors emotionally
• Value spreads at the end of 2020 got wider than the dot-com bubble, making it the craziest valuation environment in 60+ years of data
• Private equity uses 'volatility laundering' - marking illiquid assets at artificially low volatility when they're actually levered active equity with higher risk
• Machine learning forces quants to surrender some intuition for better results, moving from 50% story/50% evidence to roughly 67% evidence/33% story
• The average hedge fund delivers zero alpha after fees, making active management an inherently arrogant act that assumes you're better than average
• ESG constraints are costly by design - they can only help the world by raising cost of capital for 'bad' companies, meaning ESG investors should expect lower returns
• Statistics should be taught in junior high instead of calculus, as understanding randomness is crucial for functional citizenship and informed decision-making