Cliff Asness: If You Think You’re Right, HODL!

In this interview with Infinite Loops, Cliff Asness explains why if you think you’re right about an investment, you should hold on for dear life (HODL). Here’s an excerpt from the interview:

Asness: It does not make all sock companies attractive at any valuation in any financial condition. I don’t want to get more into this world, but you could write a little primer on common investing mistakes that they take to great extremes just based on this. I like movies as a way of investing, but the best part of this world is learning the acronyms. One famous one which is now I think used outside of there, which I might even use for some strategies is HODL, hold on for dear life.

The funny part of this one is if applied correctly, my self-serving view of correctly, like late 2020 to value strategies. I actually think if you’ve really done the work, really think you understand why it’s not been working and really feel it’s going to make you a lot of money, hold on for dear life is half the success in investing at times. If you go back to the beginning of my career, I probably would’ve said all of investing success is this would’ve been arrogant, it’s about being cleverer or smarter than the market or the next person. I think that’s half.

I think half of it might be some form maybe milder than dear life, but it’s some form of sticking with something. So I’m naturally predisposed to that. You can’t take it and apply it to anything and magically make that thing a good investment by holding it forever. If the thing is expensive and the company is in bad shape, hold on for dear life doesn’t suddenly make it a good investment, but that’s not the best, that’s the last thing I’ll say.

You can watch the entire discussion here: