How is Jim Simons so rich???

Does Jim Simon's have some secret formula for his trading computers' that is worth millions? Do all quants use similar formula's? Does Renaissance Technologies have 1 formula that makes them billions? enlighten me

James Simons of Renaissance Technologies: Finance's Mad Scientist

The 3.3 billion dollar Medallion fund has amassed 35.6 percent annually since its inception in 1988. Cumulative returns? 2,478.6 percent

James Simons is an award-winning mathematician.

He is the winner of the American Mathematics Oswald Veblen Prize in Geometry. He surrounds himself with equally intellectually gifted individuals. One-third of his employees hold PhDs. They don't hire people from business schools. They hire scientists.

What does he contribute his success to? Luck. Is that really it? Hardly

from the Institutional Investor The Secret World of Jim Simons

Like all quantitative money managers, Renaissance aims to find small market anomalies and inefficiencies that can support profitable trading on billions of dollars of capital. Though all quant shops are alike in their dedication to models -- Let the best algorithm win! -- Renaissance's approach differs from the "convergence trading" popularized by John Meriwether's Long-Term Capital Management and similar arbitrage shops. Convergence traders price financial instruments based on complex mathematical models, find two different instruments that are cheap and expensive on a relative basis and then buy one and sell the other, betting that the prices will, at some point, have to return to their proper level. The Renaissance approach requires that trades pay off in a limited, specified time frame. And Renaissance traders never override the models.

On the intellect of RenTech founders from certified user @syntheticshit

If you read More Money Than God, the two current guys that run RenTech made groundbreaking research in machine translation. In short, artificial intelligence guys would teach computers to learn French like a 7th-grader; grammar rules, exceptions, dictionary, etc....they said screw it, what we're going to do is feed it a Canadian government document that had been translated in both English and French. And then they had it scan it over and over and over again for correlations and rough translations..

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Comments (16)

May 3, 2012

jim simons is reallly really fucking smart. and he hires, really really really smart people. that's a pretty good start.

May 3, 2012

I just looked up HMM's on wikipedia... lol thats some deep crap lol "I think I read somewhere that RenTec was one of the first quant firms to make extensive use of HMMs to predict the market." thanks mass_marines that answered my question

May 3, 2012

There is a profile of Simons from almost ten years ago floating around the internet that goes into his career. It's definitely not about "one formula." Generally speaking, his team looks for statistical patterns that can be exploited and uses a modified Kelly Criterion to size trades. He's been managing mostly his own money for 30 years and compounding at 40% does wonders for your bank account.

May 3, 2012

. nvm

May 3, 2012

Look up his lecture at MIT

He is a boss

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May 3, 2012
M Friedman:

Look up his lecture at MIT

He is a boss

Is it on trading or math?

May 3, 2012
mb666:
M Friedman:

Look up his lecture at MIT

He is a boss

Is it on trading or math?

If it's the same one I saw, it's addressed to a CS class, but it's a general lecture on his path to success. He's not a very good speaker though, so it was kind of boring. Still worth a watch if you're interested though.

In any case, Simons is by far the most successful and consistent HF manager in my eyes. Yeah, Paulson has had better years, but that dude is all over the place. Take a look at Simons historical personal take for the past 7 years.

2011: 2.1B
2010: 2.5B
2009: 2.5B
2008: 2.5B
2007: 2.9B
2006: 1.7B
2005: 1.5B
2004: 600M

The guy has made over 16B in the last 7 years. It's just mind boggling.

May 3, 2012

Although Mr. Simons is legend in hedge funds, it should be noted that the Medallion Fund is where the roughly 35% annual return is achieved; and that fund is for the owners, partners, and employees. Everyone else who wants to invest gets the crappier secondary fund with a 5% management fee and astonishing 44% performance fee.

And yes, Renaissance Technologies does has secret formulas and algorithms. And, no, they will not share it.

May 3, 2012
rls:

Although Mr. Simons is legend in hedge funds, it should be noted that the Medallion Fund is where the roughly 35% annual return is achieved; and that fund is for the owners, partners, and employees. Everyone else who wants to invest gets the crappier secondary fund with a 5% management fee and astonishing 44% performance fee.

Medallion is the fund with the outrageous fees; the funds that are open to the public have much lower fees.

May 3, 2012
alonamaloh:
rls:

Although Mr. Simons is legend in hedge funds, it should be noted that the Medallion Fund is where the roughly 35% annual return is achieved; and that fund is for the owners, partners, and employees. Everyone else who wants to invest gets the crappier secondary fund with a 5% management fee and astonishing 44% performance fee.

Medallion is the fund with the outrageous fees; the funds that are open to the public have much lower fees.

Medallion returned all outside money ages ago. RIEF and RIFF had the 5 and 44 structure, but because of their shitty performance it was reduced later on. But yes, when Medallion was open to outside investments, it also used the 5 and 44 fee structure.

May 3, 2012

KISS was one of the best selling rock bands of all time, duh!!

Money Never Sleeps? More like Money Never SUCKS amirite?!?!?!?

May 3, 2012

Ridiculous website, but this article is legit:

http://chinese-school.netfirms.com/abacus-hedge-fu...

May 5, 2018

Read through this today, definitely worth it. Didn't know about his VC efforts and the investment in other funds.

May 3, 2012
sambotanman:

Does Jim Simon's have some secret formula for his trading computers' that is worth millions? Do all quants use similar formula's? Does Renaissance Technologies have 1 formula that makes them billions? enlighten me

his secret formula is correct apostrophe usage, so it looks like you're screwed!

May 3, 2012
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