Friday, December 15, 2017

Jim Simons: Renaissance Man, Crypto Billionaire

Crypto in the older, accurate sense.
From the New Yorker, December 18 & 25, 2017 Issue:

Jim Simons, the Numbers King
Algorithms made him a Wall Street billionaire. His new research center helps scientists mine data for the common good.
A visit to a scientific-research center usually begins at a star professor’s laboratory that is abuzz with a dozen postdocs collaborating on various experiments. But when I recently toured the Flatiron Institute, which formally opened in September, in lower Manhattan, I was taken straight to a computer room. The only sound came from a susurrating climate-control system. I was surrounded by rows of black metal cages outfitted, from floor to ceiling, with black metal shelves filled with black server nodes: boxes with small, twinkling lights and protruding multicolored wires. Tags dangled from some of the wires, notes that the tech staff had written to themselves. I realized that I’d seen a facility like this only in movies. Nick Carriero, one of the directors of what the institute calls its “scientific-computing core,” walked me around the space. He pointed to a cage with empty shelves. “We’re waiting for the quantum-physics people to start showing up,” he said.
The Flatiron Institute, which is in an eleven-story fin-de-si├Ęcle building on the corner of Twenty-first Street and Fifth Avenue, is devoted exclusively to computational science—the development and application of algorithms to analyze enormous caches of scientific data. In recent decades, university researchers have become adept at collecting digital information: trillions of base pairs from sequenced human genomes; light measurements from billions of stars. But, because few of these scientists are professional coders, they have often analyzed their hauls with jury-rigged code that has been farmed out to graduate students. The institute’s aim is to help provide top researchers across the scientific spectrum with bespoke algorithms that can detect even the faintest tune in the digital cacophony.

I first visited the Flatiron Institute in June. Although the official opening was still a few months away, the lobby was complete. It had that old-but-new look of expensively renovated interiors; every scratch in the building’s history had been polished away. Near the entrance hangs a Chagall-like painting, “Eve and the Creation of the Universe,” by Aviva Green. Green’s son happened to be spending the year at the institute, as a fellow in astrophysics. “Every day, he walks into the lobby and sees his mother’s picture,” Jim Simons, the institute’s founder, told me.

Simons, a noted mathematician, is also the founder of Renaissance Technologies, one of the world’s largest hedge funds. His income last year was $1.6 billion, the highest in the hedge-fund industry. You might assume that he had to show up every day at Renaissance in order to make that kind of money, but Simons, who is seventy-nine, retired eight years ago from the firm, which he started in the late seventies. His Brobdingnagian compensation is a result of a substantial stake in the company. He told me that, although he has little to do with Renaissance’s day-to-day activities, he occasionally offers ideas. He said, “I gave them one three months ago”—a suggestion for simplifying the historical data behind one of the firm’s trading algorithms. Beyond saying that it didn’t work, he wouldn’t discuss the details—Renaissance’s methods are proprietary and secret—but he did share with me the key to his investing success: he “never overrode the model.” Once he settled on what should happen, he held tight until it did.

The Flatiron Institute can be seen as replicating the structure that Simons established at Renaissance, where he hired researchers to analyze large amounts of data about stocks and other financial instruments, in order to detect previously unseen patterns in their fluctuations. These discoveries gave Simons a conclusive edge. At the Flatiron, a nonprofit enterprise, the goal is to apply Renaissance’s analytical strategies to projects dedicated to expanding knowledge and helping humanity. The institute has three active divisions—computational biology, computational astronomy, and computational quantum physics—and has plans to add a fourth.

Simons works out of a top-floor corner office across the street from the institute, in a building occupied by its administrative parent, the Simons Foundation. We sat down to talk there, in front of a huge painting of a lynx that has killed a hare—a metaphor, I assumed, for his approach to the markets. I was mistaken, Simons said: he liked it, and his wife, Marilyn, did not, so he had removed it from their mansion in East Setauket, on Long Island. (Marilyn, who has a Ph.D. in economics, runs the business side of the foundation, and the institute, from two floors below.) An Archimedes screw that he enjoyed fiddling with sat on a table next to a half-filled ashtray. Simons smokes constantly, even in enclosed conference rooms. He pointed out that, whatever the potential fine for doing so is, he can pay it.

Simons has an air of being both pleased with himself and ready to be pleased by others. He dresses in expensive cabana wear: delicate cotton shirts paired with chinos that are hiked high and held up by an Indian-bead belt. He grew up in the suburbs of Boston, and speaks with the same light Massachusetts accent as Michael Bloomberg, with frequent pauses and imprecisions. He sometimes uses the words “et cetera” instead of finishing a thought, perhaps because he is abstracted, or because he has learned that the intricacies of his mind are not always interesting to others, or because, when you are as rich as Simons, people always wait for you to finish what you are saying.
On a wall, Simons had hung a framed slide from a presentation on the Chern-Simons theory. He helped develop the theory when he was in his early thirties, in collaboration with the famed mathematician Shiing-Shen Chern. The theory captures the subtle properties of three-dimensional spaces—for example, the shape that is left if you cut out a complicated knot. It became a building block of string theory, quantum computing, and condensed-matter physics. “I have to point out, none of these applications ever occurred to me,” he told me. “I do the math, they do the physics.”

High-level mathematics is a young person’s game—practitioners tend to do their best work before they are forty—but Simons continued to do ambitious mathematics work well into adulthood. In his sixties, after the death of his son Nick, who drowned in Bali in 2003, he returned to it. “When you’re really thinking hard about mathematics, you’re in your own world,” he said. “And you’re cushioned from other things.” (Simons lost another son, Paul, in a bike accident, in 1996.) During these years, Simons published a widely cited paper, “Axiomatic Characterization of Ordinary Differential Cohomology,” in the Journal of Topology. He told me about his most recent project: “The question is, does there exist a complex structure on the six-dimensional sphere? It’s a great problem, it’s very old, and no one knows the answer.” Marilyn told me she can tell that her husband is thinking about math when his eyes glaze over and he starts grinding his jaw.

Our discussion turned to the Flatiron Institute. Renaissance’s computer infrastructure, he said, had been a central part of its success. At universities, Simons said, coding tends to be an erratic process. He said of the graduate students and postdocs who handled such work, “Some of them are pretty good code writers, and some of them are not so good. But then they leave, and there’s no one to maintain that code.” For the institute, he has hired two esteemed coders from academia: Carriero, who had led my tour, had been recruited from Yale, where he had developed the university’s high-performance computing capabilities for the life sciences; Ian Fisk had worked at cern, the particle-physics laboratory outside Geneva. Simons offered them greater authority and high salaries. “They’re the best of the breed,” he said. Carriero and Fisk sometimes consult with their counterparts at Renaissance about technical matters.

Simons’s emphasis on what most of us think of as back-office functions is of a piece with the distinctive computational focus of the institute. The Flatiron doesn’t conduct any new experiments. Most of its fellows collaborate with universities that generate fresh data from “wet” labs—the ones with autoclaves and genetically engineered mice—and other facilities. The institute’s algorithms and computer models are meant to help its fellows uncover information hidden in data sets that have already been collected: inferring the location of new planets from the distorted space-time that surrounds them; identifying links to mutations among apparently functionless parts of chromosomes. 

As a result, the interior of the institute looks less like a lab than like an ordinary Flatiron-district office: casually dressed people sitting all day at desks, staring at screens, under high ceilings.
Simons has amassed the same processing capacity as would normally be present in the computer hub of a mid-sized research university: the equivalent of six thousand high-end laptops. This is powerful, but not ostentatiously so. And, as Carriero conceded, it “cannot be compared to the corporate-wide resources of an Amazon or a Google.” But, because there are far fewer people at the Flatiron Institute, each researcher has immediate access to tremendous computing power. Carriero said that, by supplying scientists with state-of-the-art “algorithms guidance” and “software guidance,” he can help them maintain a laserlike focus on advancing science.

Simons has placed a big bet on his hunch that basic science will yield to the same approach that made him rich. He has hired ninety-one fellows in the past two years, and expects to employ more than two hundred, making the Flatiron almost as big as the Institute for Advanced Study, in Princeton, New Jersey. He is not worried about the cost. “I originally thought seventy-five million a year, but now I’m thinking it’s probably going to be about eighty,” he said. Given that Forbes estimates Simons’s net worth to be $18.5 billion, supporting the Flatiron Institute is, in financial terms, a lark. “Renaissance was a lot of fun,” he told me. “And this is fun, too.”....MUCH, MUCH MORE
If interested see also January's "Rare Interview With Renaissance Technologies' Jim Simons"
One quick heads-up. Simons considers RenTech's secrets to be secret.
And he's good at keeping secrets....
(see also: Crypto

And a post from 10 years ago:
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