Factor/Style Investing

Superstar Investors

Topics - Factor/Style Investing Multi-Style Portfolio Construction

Read Time - 25 mins

${ numberSection } ${ text }
Superstar Investors

Many famous investors are outspoken about their investment philosophies, and carefully apply them to a select number of securities. In this paper, we seek to apply their wisdom systematically; to ask whether their philosophies applied broadly might still generate “alpha.” 1 1 Close We are not the first to try to demystify successful investment strategies: for other studies see Siegel, Kroner and Clifford (2001) for a range of public and private funds and institutions; Gergaud and Ziemba (2012); Pedersen (2015) for hedge fund managers; Frazzini, Kabiller and Pedersen (2012) for a deeper treatment of Berkshire Hathaway than covered in this article; Hurst, Ooi and Pedersen (2013) for trend-following strategies; and Chambers, Dimson and Foo (2015) for Keynes. Additionally, see Asness et al. (2015) for more background on the styles underlying our analysis.

Our analysis suggests there are many ways to achieve long-run investment success. The takeaway for investors is to identify structural edges and commit to seeing them through inevitable periods of underperformance. As each of our superstars shows, “merely good” edges over time may compound to great long-term performance.

Published in

The Journal of Investing

This document has been provided to you solely for information purposes and does not constitute an offer or solicitation of an offer or any advice or recommendation to purchase any securities or other financial instruments and may not be construed as such.


Past performance is no guarantee of future results.


The information contained herein is only as current as of the date indicated, and may be superseded by subsequent market events or for other reasons. Neither the author nor AQR undertakes to advise you of any changes in the views expressed herein.


The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation.


The views and opinions expressed herein are those of the author and do not necessarily reflect the views of AQR Capital Management, LLC, its affiliates or its employees..


This information is not intended to, and does not relate specifically to any investment strategy or product that AQR offers. It is being provided merely to provide a framework to assist in the implementation of an investor’s own analysis and an investor’s own view on the topic discussed herein.


No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from AQR.



© Morningstar 2016. All rights reserved. Use of this content requires expert knowledge. It is to be used by specialist institutions only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied, adapted or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information, except where such damages or losses cannot be limited or excluded by law in your jurisdiction. Past financial performance is no guarantee of future performance.