Friday, May 10, 2024

"Jim Simons, ‘Quant King’ at Renaissance Technologies, Dies at 86"

Nobody lives forever but if anyone could have figured out a way it would have been Mr. Simons. There's brilliant, brilliant², and Simons.

From Bloomberg, May 10:

  • He hired scientists and code breakers to decipher markets
  • Creator of Medallion fund was one of world’s richest people

Jim Simons, the mathematician-investor who created what many in finance consider the world’s greatest moneymaking machine at his secretive firm, Renaissance Technologies, has died. He was 86.

He died today in New York City, according to his charitable foundation, which didn’t cite a cause.

In turning from academia to investing as he entered his 40s, Simons eschewed standard practices of money managers in favor of quantitative analysis — finding patterns in data that predicted price changes. His technique was so successful that he became known as the Quant King.

At Renaissance, located about 60 miles east of Manhattan in quiet East Setauket, New York, Simons avoided employing Wall Street veterans. Instead he sought out mathematicians and scientists, including astrophysicists and code breakers, who could ferret out usable investment information in the terabytes of data his firm sucked in each day on everything from sunspots to overseas weather.  

Over more than three decades, his returns consistently trounced markets even as computer power got cheaper and competitors tried their best to mimic Renaissance’s success by building their own complex algorithms to run their funds.

“There are just a few individuals who have truly changed how we view the markets,” Theodore Aronson, founder of AJO Vista, a quantitative money management firm, told Bloomberg Markets magazine in 2008. “John Maynard Keynes is one of the few. Warren Buffett is one of the few. So is Jim Simons.”

A onetime code breaker for the US government, Simons refused to give specifics about how he produced more than four times the return of the S&P 500 Index in his most famous fund, Medallion. From 1988 through 2023, the fund generated an astounding average annual return of almost 40%, even after hefty fees, turning Simons and as many as three colleagues into billionaires.

He was worth an estimated $31.8 billion, making him the 49th-richest person in the world, according to the Bloomberg Billionaires Index.

Clients and insiders paid handsomely to entrust their funds to Simons. He eventually raised fees to 5% of assets and 44% of profits, among the industry’s highest. Believing that the algorithms the firm used to trade stocks, bonds and commodities wouldn’t work if Medallion got too large, he soon started limiting access to the fund.....



Among his legacies is Quanta Magazine, a publication of the Simons Foundation.

Some previous posts:
Jim Simons: Renaissance Man, Crypto Billionaire
Crypto in the older, accurate sense.

"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....
Attention Investors: Here's Your Competition-Bookmark this Link

Climateer Line of the Day: RenTech's Jim Simons Talks Politics Edition

Today's winner of the prestigious CLoD is brought to us by DealBreaker.
DealBreaker, for when reality just isn't funny enough.
“Now even if those two candidates had the same expected return — which I doubt — but even if Trump’s was as good as Hillary’s, his volatility is so enormous that his Sharpe ratio is terrible,” Simons said....

The article says 'Renaissance Capital' but meant Renaissance Technologies.
RenCap is a research provider.
As we noted...:
...One interesting point about the recent election is that while Mr. and Mrs. Simons' politics skew left (99.99% this cycle), the firm's co-CEO Robert Mercer's, and his daughter's, skew right (100%) and in this election cycle were the fifth and ninth largest contributors nationally, at $$23,539,900 (Mercer) and $19,734,650 (Simons)...
Investing AI: "Why Machines Still Can’t Learn So Good"
Everyone wants to be the next Renaissance Technologies and are looking for undiscovered data sources and/or connections, some of it gets pretty strange, some links after the jump....

An Interview With RenTech's Jim Simons: Quantitative Finance and Building a Firm

I am obviously doing something wrong 

Jim Simons' Simons Foundation Is Running The World's Greenest Supercomputer