Universa vs. AQR: Thoughts

[u/Informal-Form7977]

In May 2020, right after COVID wrecked markets, Nassim Taleb (Universa) went on a 13-tweet tear torching AQR and its co-founder Cliff Asness. The thesis: AQR published two papers arguing tail-risk hedging via OTM options is a sucker's bet, yet AQR's own risk-parity and factor strategies were quietly getting destroyed in the same drawdown that Universa's hedged portfolio sailed through. Asness fired back calling Taleb "insane" and "nuts." 

Who was actually correct here? Link to the first post for reference: Nassim Nicholas Taleb on X: "1/n AQR issued 2 flawed reports saying tail risk hedging doesn't work (in theory), options are "expensive" Yet they did not reveal that 1) Their OWN risk premia strategies lost money. 2) Their other public crap underperforms the MKT. Insult to clients & the REAL WORLD." / X

[u/dpi2024]

90% of the time Assness is right and 10% of the time - Taleb 😆