Rest In Peace: Jim Simons
If you'd like to learn about capital markets, peak investing performance, and creative innovation, I recommend listening to this fascinating Acquired podcast on Renaissance Technologies — available on your favorite podcast app.
Renaissance Technologies is the best performing investment firm of all time, with their flagship Medallion Fund posting 66% (!) average annual returns, before fees, for over 30 years.
More interestingly, Renaissance was founded in 1978 by mathematician Jim Simons, who passed away this week at the age of 85.
Simons has been called the pioneer of quantitative trading, and was one of the first to use machine learning, information theory, and state of the art computing, to build automated trading systems to identify and profit from investment opportunities.
Simons studied mathematics at MIT, and later Berkeley, from where he received his PhD at age 23. He went on to work for the US government on code breaking, taught math at Harvard, won the Oswald Veblen prize in Geometry for major contributions to the field, and chaired the math department at Stony Brook University.
At the age of 40, looking for a new challenge and with no formal training in trading or capital markets, he founded Renaissance to identify trading opportunities using innovative mathematical techniques, and large troves of market data.
In his later years, he founded Math for America, and became an established philanthropist.
What I loved about this story is learning how messy the process of innovation is, and how creativity is often harnessed by bring perspectives and ideas from different fields towards a common problem.
If you'd like to learn more about Jim Simons and Renaissance, besides the podcast, I enjoyed and recommend the excellent book "The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution" by Gregory Zuckerman.
