Clifford Asness’ AQR Capital Management has had an exceptional year, and now, it’s taking on another challenge in the form of shorting AMC Entertainment (NYSE:AMC). Asness did not shy away from his position on AMC stock, detailing it on Twitter (NYSE:TWTR). However, his account was temporarily inactive this morning, possibly in relation to these statements.
The hedge fund’s Absolute Return fund is up 43.3% year-to-date (YTD) as of May, while its Equity Market Neutral fund has returned 52.5%. AQR has about $145 billion in assets under management, of which $52 billion is attributable to 13F securities. This makes AQR one of the largest hedge funds in the world.
Asness characterizes the movie theater chain as “super expensive, super unprofitable, and super high beta and volatility.” Still, the short position only accounts for 12 basis points, or 0.12%, of the fund’s overall portfolio. AQR operates as a quantitative fund and owns thousands of positions at a time. Therefore, the chances of the AMC short bringing down AQR’s portfolio significantly is close to zero.
Clifford Asness Deletes Twitter After Shorting AMC Stock
At the time of writing, Asness’ Twitter page is active again after a brief hiatus. One possible explanation is that AMC supporters may have caused a bit too much backlash for the hedge fund manager. Last month, he tweeted:
“I have tremendous respect for retail investors who’ve done their homework and invest well. I do not have respect for idiots with laser eyes talking about ‘stonks’ and calling themselves ‘apes’ who are PROUD they don’t know anything.”
Asness is clearly not a supporter of the popular meme stock, choosing instead to invest in value companies. In terms of growth companies, he still believes that “relative prices are crazy out there.”
The fund manager seeks out “cheap companies” with profitability, low risk and momentum. AQR’s top portfolio positions include names like Google (NASDAQ:GOOG, NASDAQ:GOOGL), Taiwan Semiconductor (NYSE:TSM) and Pfizer (NYSE:PFE).
In the end, it feels as if Asness will emerge as the winner in his feud with AMC supporters. The billionaire’s AMC short position is a tiny percentage of his overall portfolio, so even if AMC short squeezes, AQR will not feel much pain. Plus, the fund is outperforming the market by a wide margin this year.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
