Jim Simons has died(simonsfoundation.org)
simonsfoundation.org
Jim Simons has died
https://www.simonsfoundation.org/2024/05/10/simons-foundation-co-founder-mathematician-and-investor-jim-simons-dies-at-86/
337 comments
Hopefully the Simons empire has enough people who will keep executing his vision and stave off bureaucratic rot.
Making money is one thing, but circulating so much of it back through math and science is a great legacy.
Making money is one thing, but circulating so much of it back through math and science is a great legacy.
The thing is that he genuinely loved math. I don't think there's really anyone in his orbit who loves math as much. His family is his family and his colleagues love money.
We'll see in the coming months and years whether he was able to create a structure that continues his legacy but usually the answer to that question is no.
We'll see in the coming months and years whether he was able to create a structure that continues his legacy but usually the answer to that question is no.
His foundation also donates a lot to neuroscience research, particularly for Autism. I think there was a family reason for that, so probably at least some of his scientific philanthropy will continue for awhile. But yeah it's extremely hard to create a structure that would perpetuate without the remaining people at the top truly buying into and understanding the mission.
I have heard that he had at least one child with autism, hence his desire to fund efforts to better fund autism and the brain.
It's hard watching venerable institutions rot into "just avoid administerial short term blame" death loops. You have to have skin in the game, not just hire a temporary manager for it.
subtweet @apple
I think it's doable. Institutions under top leadership can thrive long after its founders die. This is true of almost every Fortune 500 company. I am sure there is enough redundancy to continue the foundation's goal. Carnegie foundation or Ford foundation, or Apple computers after jobs died .
I don't understand the relationship with Steve Jobs. Nobody's arguing that Renaissance, his investment fund, will do well without him.
We're talking about the philanthropy that Simmons led in mathematics and science through his foundation.
Now, whether this support will continue depends on the will of Jim as well as his family.
We're talking about the philanthropy that Simmons led in mathematics and science through his foundation.
Now, whether this support will continue depends on the will of Jim as well as his family.
I’d argue that Ford and Carnegie foundations are not good examples here, having veered very far from the intention/goals of the original donors into directions that are arguably diametrically opposed. Essentially they were hijacked from within by hired “professional managers” who pursued their own agendas. Maybe in the future we can set up AIs to make the decisions on our behalf after we’re gone, because humans are extremely unreliable over longer time frames!
It’s also not unheard of to structure a foundation to just run their assets down over time exactly on the theory that, given enough time, who know how the money will be distributed.
https://en.m.wikipedia.org/wiki/John_M._Olin_Foundation
https://en.m.wikipedia.org/wiki/John_M._Olin_Foundation
sadly, the trend for these sorts of things is to sour after the original founder leaves...
There is an esoteric concept that has some dynamics that explain this phenomenon somewhat. Not to get to into the weeds (the origins of this concept are esoteric religious ideas - I mean this secularly, as it relates to business entities) but the concept is an 'egregore'
https://en.wikipedia.org/wiki/Egregore#:~:text=An%20egregore....
I don't see it on the Wikipedia page, but the theory that explains the degradation of a companies original mission statement can be summarized as this: "Within an organization(egregore) there exists three classes of individuals... the primary two of which are those that serve in the name of the egregore, and those that serve the egregore directly, the third (a smaller %) being those un-loyal to the current structure and would change the egregore to suit their needs. Of the main two: The dichotomy can be spilt along lines like developers/founders vs marketers/sales, where developers are interested in serving the mission statement and developing a good product, and marketers are interested in growth and survival, at the expense of everything else. So when the developers/founders leave, the vacuum that is created is filled either by those that would change the egregore, or corrupt the mission statement in the name of growth and profit."
This is a simplistic model - with a fair bit of predictive and explanatory power. I have found it useful to describe that shift inside a corporation.
There is an esoteric concept that has some dynamics that explain this phenomenon somewhat. Not to get to into the weeds (the origins of this concept are esoteric religious ideas - I mean this secularly, as it relates to business entities) but the concept is an 'egregore'
https://en.wikipedia.org/wiki/Egregore#:~:text=An%20egregore....
I don't see it on the Wikipedia page, but the theory that explains the degradation of a companies original mission statement can be summarized as this: "Within an organization(egregore) there exists three classes of individuals... the primary two of which are those that serve in the name of the egregore, and those that serve the egregore directly, the third (a smaller %) being those un-loyal to the current structure and would change the egregore to suit their needs. Of the main two: The dichotomy can be spilt along lines like developers/founders vs marketers/sales, where developers are interested in serving the mission statement and developing a good product, and marketers are interested in growth and survival, at the expense of everything else. So when the developers/founders leave, the vacuum that is created is filled either by those that would change the egregore, or corrupt the mission statement in the name of growth and profit."
This is a simplistic model - with a fair bit of predictive and explanatory power. I have found it useful to describe that shift inside a corporation.
Simons has been out of day-to-day management for quite some time. He was succeeded by co-CEOs who were then themselves succeeded, IIRC. (These are my recollections from reading The Man Who Solved the Market). Apparently his management style was always pretty hands off and they operated multiple successful quant strategies that were led by others. Their Medallion fund returned 22% after (huge) fees in 2022 according to the WSJ. [1] That's the employee only fund that has blown the doors off for 30+ years. They do have a few other funds that manage much more $ and manage external money that have never performed at Medallion's level. In other words, it seems like succession will not be a major risk for them in the near term.
[1] https://www.wsj.com/articles/big-hedge-funds-are-top-perform...
[1] https://www.wsj.com/articles/big-hedge-funds-are-top-perform...
It would imply good processes for keeping out those that would run it to the ground in the name of (short term) profits... That makes me hopeful...
But every succession is a risk. Every merger is a risk... ask Boeing.
But every succession is a risk. Every merger is a risk... ask Boeing.
This split exists not just in organizations but in society at large. Some people are builders and some are redistributors. Builders take pride in creating value and redistributors can provide useful service by making value available to more people. Very often engineers are not interested in marketing/selling their product and redistributors fill a useful niche.
However, some fraction of redistributors are willing to enrich themselves at the expense of others. These should never be allowed to make decisions affecting others. A founder should always look for people from the first group by looking at their past behavior and make sure those succeed him.
However, some fraction of redistributors are willing to enrich themselves at the expense of others. These should never be allowed to make decisions affecting others. A founder should always look for people from the first group by looking at their past behavior and make sure those succeed him.
HHMI is going strong. didn't really kick until gear until after Hughes died, but still
That's because the HHMI as planned by Hughes was kind of a scam. It took legal decisions against his family to establish HHMI as a serious biomedical funding agency.
Thank you for not dragging us into the weeds of esotericism.
What is the source for the quotation in your post?
What is the source for the quotation in your post?
I am struggling to find that, sadly I am coming up short. It was from an essay, I believe, with a secular view of these things. But I can't seem to find the author. that was before I had zotero to organize these sources :)
Interesting concept. Would love to learn more if you can think of a reference
Edit: Claude for the rescue
"Here are some additional sources that discuss the concept of an egregore and how it can be applied to understanding group dynamics and the evolution of organizations:
"The Anatomy of the Body of God" by Frater Achad (Charles Stansfeld Jones) - A detailed exposition on the occult concept of egregores from a ceremonial magic perspective.
"Web of Debt" by Ellen Hodgson Brown - This book discusses egregores in the context of economic systems and the power of collective beliefs shaping institutions.
"The Egregore Effect" by Jack Willis - Explores egregores as self-reinforcing memetic constructs that shape group behavior.
"The Cult of Information" by Theodore Roszak - While not directly about egregores, it discusses how ideologies and worldviews can take on a life of their own within organizations.
"The Organizational Hologram" by David Bohm - Applies concepts from quantum physics to understanding the undivided wholeness of organizations
"Here are some additional sources that discuss the concept of an egregore and how it can be applied to understanding group dynamics and the evolution of organizations:
"The Anatomy of the Body of God" by Frater Achad (Charles Stansfeld Jones) - A detailed exposition on the occult concept of egregores from a ceremonial magic perspective.
"Web of Debt" by Ellen Hodgson Brown - This book discusses egregores in the context of economic systems and the power of collective beliefs shaping institutions.
"The Egregore Effect" by Jack Willis - Explores egregores as self-reinforcing memetic constructs that shape group behavior.
"The Cult of Information" by Theodore Roszak - While not directly about egregores, it discusses how ideologies and worldviews can take on a life of their own within organizations.
"The Organizational Hologram" by David Bohm - Applies concepts from quantum physics to understanding the undivided wholeness of organizations
Thanks for sharing this, super interesting!
> Hopefully the Simons empire has enough people who will keep executing his vision and stave off bureaucratic rot.
I think that fear is why the Gates foundation (or was it the one by Buffett or both?) have to spend down their endowment within a few years of the founder's death and then close shop.
I think that fear is why the Gates foundation (or was it the one by Buffett or both?) have to spend down their endowment within a few years of the founder's death and then close shop.
For what it's worth, the foundation was actually kickstarted by his wife.
I used to think this kind of thing was because someone didn't care.
But I also think someone is at high level, a partner might be the only one who can look at things from above, seeing the big big picture.
Of course it could be the person doesn't care, but it could also be the person is busy, etc
But I also think someone is at high level, a partner might be the only one who can look at things from above, seeing the big big picture.
Of course it could be the person doesn't care, but it could also be the person is busy, etc
I actually think they both cared. My comment was more to point out that she is still alive and is a computer scientist, so the foundation still has founding leadership.
It is not about enough people, it is about THE PERSON. Every people is different and there are people who are more different and outliers.
I wonder if he left any of the rest of his money to the foundation, or if it all stays with his family.
https://givingpledge.org/pledger?pledgerId=288
giving it away
giving it away
Quanta Magazine is also funded by his foundation.
Even the Numberphile YouTube Channel.
He was very serious about improving maths education and actually did alot.
He was very serious about improving maths education and actually did alot.
Man. That Numberphile episode on Fermat's Last Theorem with Simon Singh had me on the edge of my seat like I was as a child when Darth Maul pulled out that double-bladed lightsaber during Phantom Menace. I'm not a math major either.
Quanta is by the Simons Foundation, whereas the Numberphile YouTube channel is simply sponsored by them.
I thought Numberphile is sponsored by Jane St. Another math focused quant firm.
They have many sponsors.
Jim Discovered their channel, liked it and invited them to his New York Apartment for an interview. [1]
From that time forward, all Numberphile videos have "Simons Foundation" at the end listed as a sponsor.
[1]: Here is the video https://youtu.be/QNznD9hMEh0?si=SVnDx77dQNepMRJW
Jim Discovered their channel, liked it and invited them to his New York Apartment for an interview. [1]
From that time forward, all Numberphile videos have "Simons Foundation" at the end listed as a sponsor.
[1]: Here is the video https://youtu.be/QNznD9hMEh0?si=SVnDx77dQNepMRJW
Good point! Far and away the best popularization of recent results, at least in the eyes of a mathematician.
And lots of great work in quantitative biology, which is hard to get funded elsewhere.
came here to mention this as well! fantastic ezine that i click everytime i see it linked here.
I believe Jim Simons is also one of the founders behind the National Museum of Mathematics in NYC.
https://momath.org/
https://momath.org/
His wife also helps run the foundation doesn’t she? Looks like she’s ~73 so hopefully has a few years left.
Geeze, phrasing. I meant "a few years of actively supporting the foundation", not "let's start a death clock."
73 is less than a decade into retirement age; hopefully she has much more than a few! Looks like 14.5 years life expectancy
> Looks like 14.5 years life expectancy
And I assume that's for normal people of her age and gender? She's probably far from normal.
And I assume that's for normal people of her age and gender? She's probably far from normal.
[deleted]
Been a mathematician, he also funds physics. See Simons Observatory that studies Cosmic Microwave Background.
I wasn't aware of this till a friend told me: the Simons foundation partly also funds the Perimeter institute [1].
[1] https://perimeterinstitute.ca/news/new-simons-foundation-sup...
[1] https://perimeterinstitute.ca/news/new-simons-foundation-sup...
He was worth an ungodly amount of money. His foundation or whatever vehicle he chose will surely be around for a long time.
This is what Elon musk could have been. Instead of that he became a 13 yr old guy.
Right, because spacex, starlink, tesla and neuralink don't exist. All he does is shitposting
this was posted down into the comments already but geometry has nothing to do with https://www.nytimes.com/2021/09/02/business/renaissance-irs-...
the simons foundation will have influence on machine learning and medicine for many decades to come though and will hopefully be a force of positivity in these fields
the simons foundation will have influence on machine learning and medicine for many decades to come though and will hopefully be a force of positivity in these fields
Simons was a geometer.
https://www.jstor.org/stable/1970273?origin=crossref
https://www.jstor.org/stable/1970273?origin=crossref
And the Simons Institute for the Theory of Computing at Berkeley!
> found these conferences a bit ridiculous
Was it the content/aims of the conferences, or just that they were so ostentatiously luxurious?
Was it the content/aims of the conferences, or just that they were so ostentatiously luxurious?
Magma. Only in the us. Sydney where it’s developed have to pay for it
That money for the arXiv was a decade late. arXiv barely survived the 2000s.
> That money for the arXiv was a decade late. arXiv barely survived the 2000s.
I find this kind of comment quite distasteful on someones death. Was he actively trying to destroy arXiv?
I find this kind of comment quite distasteful on someones death. Was he actively trying to destroy arXiv?
I'm not blaming Simons, I am blaming the people I worked for when I worked at arXiv who, again, took a decade to start looking for sustainable funding.
While this thread is by no means as formal of an event. Picture yourself at someones memorial service, before/during/after the service you bring up a topic that is orthogonal to the person's life and frames it about yourself instead of the person being memorialized. Its just a bit weird.
Now picture yourself a million miles from that, on a semi anonymous third-tier comment thread on a bulletin board
LARPing is likely Internet's favourite pass-time.
Life in general, really.
Check out Finite and Infinite Games by Carse.
Check out Finite and Infinite Games by Carse.
Memorial service? What are you on about? In all likelihood, nobody here had met the guy, and HN would hardly even be on his radar. Picture yourself at a coffee place discussing some celebrity's life event and maybe it won't be so weird anymore.
I think you are underestimating the reach of HN. While I personally didn't know Jim, I know several people who did. And I know many people, me included, who benefited from his generosity and support of science.
That's a strange sentiment, it's not like he had to donate at all?
How difficult is to run a glorified BBS over HTTP/HTML like that?
Like seriously?
It's not as difficult as the stuff being published there.
Like seriously?
It's not as difficult as the stuff being published there.
I’ve noticed this cycle for the past 30 years on the internet where a useful thing starts out really simply (host a BBS, or host a billion pdfs forever). It’s not trivial, but it seems like it should be pretty low resource.
Then people get hired and are into it and want to get paid (as people do). And costs go up. And slowly more people get added. And instead of looking for cheap ways to operate, they want to fund those people and give them 5% raises every year.
So they look for funders to cover “the bare minimum.”
So rather than figuring out how to operate efficiently, they look for benefactors.
I love arxiv and use it all the time. But why do they have employees? And what are their costs? And why not get it to the point of operating with volunteers.
I suppose someone can do that and set it up. Until then, I’ll just donate or applaud benefactors. And use scihub too I suppose. How much does that cost to run?
Then people get hired and are into it and want to get paid (as people do). And costs go up. And slowly more people get added. And instead of looking for cheap ways to operate, they want to fund those people and give them 5% raises every year.
So they look for funders to cover “the bare minimum.”
So rather than figuring out how to operate efficiently, they look for benefactors.
I love arxiv and use it all the time. But why do they have employees? And what are their costs? And why not get it to the point of operating with volunteers.
I suppose someone can do that and set it up. Until then, I’ll just donate or applaud benefactors. And use scihub too I suppose. How much does that cost to run?
When I worked there our estimates were that running costs came to about $5 per published paper compared to $5000-$20,000 at commercial journal publishers. It is still a lean operation but I think it’s a bad sign they moved most operations out of the Ithaca campus and right into high-cost NYC.
Ah, good looking out. It was on my list for this year https://info.arxiv.org/about/donate.html but if it's useless I'll skip it. More for GiveWell it is.
Why would you change your donation plans based on an unsubstantiated snarky comment about an event 15 years ago?
I have a spreadsheet. I take action at the end of the year depending on whether I'm itemizing or not (which I'll know at the end). I'm not going to do too much research. I'll add to it if I have a positive experience. If something annoying barely approaches the space of a thing I blacklist. I have some retention of some things on it but others I might fail to blacklist. In this case, I remembered.
I have a good base-case: GiveWell. So I'm content to dump everyone else on the slightest suspicion. I don't really care that much.
I have a good base-case: GiveWell. So I'm content to dump everyone else on the slightest suspicion. I don't really care that much.
Sorry to hear this. RIP.
“Be guided by beauty. I really mean that. Pretty much everything I’ve done has had an aesthetic component, at least to me. Now you might think ‘well, building a company that’s trading bonds, what’s so aesthetic about that?’ But, what’s aesthetic about it is doing it right. Getting the right kind of people, and approaching the problem, and doing it right […] it’s a beautiful thing to do something right.”
- Jim Simons
“Be guided by beauty. I really mean that. Pretty much everything I’ve done has had an aesthetic component, at least to me. Now you might think ‘well, building a company that’s trading bonds, what’s so aesthetic about that?’ But, what’s aesthetic about it is doing it right. Getting the right kind of people, and approaching the problem, and doing it right […] it’s a beautiful thing to do something right.”
- Jim Simons
man's a genius, enjoyed each of his interviews. rip
This beauty talk really needs to think.
With the current status of research it's clear humans have a very problematic relation with what most people think the term means.
A new word should really be crafted to disambiguate.
With the current status of research it's clear humans have a very problematic relation with what most people think the term means.
A new word should really be crafted to disambiguate.
I have a feeling that when academics or high status people talk about beauty they actually mean “surprising depth”, because I find that both terms as used by these people subconsciously encode a notion that hard work is required, something not fully appreciated by most humans.. (although Simons does tip his hat to that with his “be guided by”.) Anyways high status and academics tend to forget, due to early quality education, that appreciation of the sort of beauty that they refer to is not costfree.
Sadly I've never been able to snag an interview with RenTech (and I've applied like a dozen times), but they're the ones that actually made me start taking finance a lot more seriously. Maybe if I ever finish my PhD they'll hire me.
I had previously thought of HFT and Quant as a bunch of "finance bros", and kind of dismissed it as "not real CS" [1]. Reading about RenTech and Jim Simons made realize that there's actually a lot of really cool and interesting math and CS that goes into this stuff.
Jim Simons being a respected mathematician who just decided to change trajectories has always fascinated me, and it's sad that he's gone.
[1] I don't believe this anymore and I feel dumb for thinking it in the first place.
I had previously thought of HFT and Quant as a bunch of "finance bros", and kind of dismissed it as "not real CS" [1]. Reading about RenTech and Jim Simons made realize that there's actually a lot of really cool and interesting math and CS that goes into this stuff.
Jim Simons being a respected mathematician who just decided to change trajectories has always fascinated me, and it's sad that he's gone.
[1] I don't believe this anymore and I feel dumb for thinking it in the first place.
His whole RenTech story was fascinating.
Effectively an outsider in finance who gathered a bunch of other outsiders (aka big mathematicians), and decided to start a hedge fund that takes zero interest in the actual companies and trades solely on math. Which makes sense, since none of the main people involved in its creation had any corporate or finance experience, but tons of math experience and knowledge.
This is oversimplifying it like crazy, but I recommend anyone to anyone with even a passing curiosity for this look up the details (or read “The Man Who Solved The Market”, which is documenting the beginnings and growth of RenTech, as well as that of Simons; very enjoyable read).
Effectively an outsider in finance who gathered a bunch of other outsiders (aka big mathematicians), and decided to start a hedge fund that takes zero interest in the actual companies and trades solely on math. Which makes sense, since none of the main people involved in its creation had any corporate or finance experience, but tons of math experience and knowledge.
This is oversimplifying it like crazy, but I recommend anyone to anyone with even a passing curiosity for this look up the details (or read “The Man Who Solved The Market”, which is documenting the beginnings and growth of RenTech, as well as that of Simons; very enjoyable read).
“The Man Who Solved The Market” is fascinating because it spans almost the entire history quantitative finance (through the lens of RenTech) dating back to the 1970s.
Simmons was one of the first to realize the advantage of collecting and analyzing vast sums of data to identify patterns in financial markets. They were digitizing magnetic tapes and collecting more data than they could even process given technical limitations of the time.
Simmons was one of the first to realize the advantage of collecting and analyzing vast sums of data to identify patterns in financial markets. They were digitizing magnetic tapes and collecting more data than they could even process given technical limitations of the time.
I can second this book recommendation. Remarkable candor in such a secretive field.
Yep, not argument here at all, RenTech is a super fascinating outlier in finance.
It's kind of inspiring. I don't know a ton about finance or trading algorithms, but I know a fair bit (I think) about math and CS, and because of RenTech I've formulating my own trading strategies (just paper trades). Thus far all I've been able to do is lose all my pretend money by trying to play options, but it's still fun to try.
Will I be successful and make billions? Almost certainly not, but it's an excuse to play with different types of math that I don't play with very often, but RenTech proved that you can beat the market by taking advantage mathematics.
It's kind of inspiring. I don't know a ton about finance or trading algorithms, but I know a fair bit (I think) about math and CS, and because of RenTech I've formulating my own trading strategies (just paper trades). Thus far all I've been able to do is lose all my pretend money by trying to play options, but it's still fun to try.
Will I be successful and make billions? Almost certainly not, but it's an excuse to play with different types of math that I don't play with very often, but RenTech proved that you can beat the market by taking advantage mathematics.
There are some interesting interviews around rentech. It starts to feel like they made a lot of money out of being extremely thorough, by doing a lot of reasonably simple (at least by the standards of math phds) things extremely well.
IIRC his fund averaged around 30% gains per year, every year, over 30 years. (I'm going from memory here, too lazy to look it up). That is just such an unbelievable performance number.
Important to keep in mind that these returns ceased to be compounding quickly: they restarted from scratch 10bn each year to score 30%.
Successful quant stratégies tend to hit capacity limits...
Successful quant stratégies tend to hit capacity limits...
Their success is limited by what other party ready to lose, most of the time, these all are zero sum games.
Depends on how you look at it.
Eg selling insurance can be seen as a zero sum game, but it's a genuinely useful product for people, even when the expected value for them is negative. It works, because utility is not strictly proportional to money.
Similarly, market making delivers liquidity-on-demand for a fee.
Eg selling insurance can be seen as a zero sum game, but it's a genuinely useful product for people, even when the expected value for them is negative. It works, because utility is not strictly proportional to money.
Similarly, market making delivers liquidity-on-demand for a fee.
Insurance is positive-sum because the value-generating enterprise (the buyer) gets to continue generating value after the unexpected thing happen. The alternatives is that the value creation process just stop. It is only seemingly zero-sum for the point in time when the accident happens and one side has to pay for the other.
Your argument only works for catastrophic insurance.
In practice, people take out insurance even for events that would not put them out of business.
Btw, if you are talking about 'value-generating enterprises', ie businesses as buyers of insurance, then your argument doesn't really work either, or at least not without caveats:
When a business suddenly has a large liability, and it goes bankrupt, all that happens is that the equity owners are wiped out and the creditors take over. The underlying business can and often does continue uninterrupted, and has approximately the same value as a going concern as before.
Also, being able to run as a going concern is of finite value to a business. If your business can take a 51% chance of either doubling in value or alternatively going bust, then that _might_ be a good gamble to take if your shareholders are well-diversified. For example, if index funds are your main shareholders.
Humans need considerable better odds before they consider such a gamble. But people do regularly put their life on the line in return for very finite benefits. Eg every time you leave the house, and drive a car. Or even more stark, any time people conveniently 'forget' to put their seatbelts on.
In practice, people take out insurance even for events that would not put them out of business.
Btw, if you are talking about 'value-generating enterprises', ie businesses as buyers of insurance, then your argument doesn't really work either, or at least not without caveats:
When a business suddenly has a large liability, and it goes bankrupt, all that happens is that the equity owners are wiped out and the creditors take over. The underlying business can and often does continue uninterrupted, and has approximately the same value as a going concern as before.
Also, being able to run as a going concern is of finite value to a business. If your business can take a 51% chance of either doubling in value or alternatively going bust, then that _might_ be a good gamble to take if your shareholders are well-diversified. For example, if index funds are your main shareholders.
Humans need considerable better odds before they consider such a gamble. But people do regularly put their life on the line in return for very finite benefits. Eg every time you leave the house, and drive a car. Or even more stark, any time people conveniently 'forget' to put their seatbelts on.
Events that merely reduce the productivity of your business has the same calculus: insurance helps you get back to speed quickly, and there are values in doing so.
I am not saying that ALL insurances provide values. Like any other kind of trades, you can lose values if you make a bad decision. That does not make insurance inherently zero- or negative-sum.
> When a business suddenly has a large liability, and it goes bankrupt, all that happens is that the equity owners are wiped out and the creditors take over. The underlying business can and often does continue uninterrupted, and has approximately the same value as a going concern as before.
This assumes the original owner brings no value to the business. Even in that case, the disruption itself is harmful, not to mention the assumption that bankrupted business can restructure rather than closing down.
I am not saying that ALL insurances provide values. Like any other kind of trades, you can lose values if you make a bad decision. That does not make insurance inherently zero- or negative-sum.
> When a business suddenly has a large liability, and it goes bankrupt, all that happens is that the equity owners are wiped out and the creditors take over. The underlying business can and often does continue uninterrupted, and has approximately the same value as a going concern as before.
This assumes the original owner brings no value to the business. Even in that case, the disruption itself is harmful, not to mention the assumption that bankrupted business can restructure rather than closing down.
You can close down the business even without a bankruptcy. And you can have a bankruptcy, without closing down.
Closing down the business doesn't necessarily mean very much: all the machines, and workers and real estate and building still exist, whether the business closes or not.
Closing down the business doesn't necessarily mean very much: all the machines, and workers and real estate and building still exist, whether the business closes or not.
their success is limited by how much money they can move. When you are moving that kind of money through quant strats you start to move the market. It's easy to capture a triangle arb with 20k, almost impossible to do it with 10B, because by the time you enter and exit the trade the arb no longer exists or you were moving the market against yourself with your own trades.
One of the genious thing that rentech did was long out of the money bonds, and short newly issued bonds. Seems like such a simple strat, but when you crank up the leverage you can make alot of money.
One of the genious thing that rentech did was long out of the money bonds, and short newly issued bonds. Seems like such a simple strat, but when you crank up the leverage you can make alot of money.
I'd still wish to have details on this (I too heard of similar numbers for his fund before), because in my newb eyes .. such returns would mean they could absorb a huge chunk of the planet liquidity.
No, because such returns aren't scalable.
According to industry rumors, RenTech is somewhere between $10-20bn AUM (assets under management, i.e. the capital used for trading), and the profit that they make, they can't reinvest, they have to take it out as profit.
According to industry rumors, RenTech is somewhere between $10-20bn AUM (assets under management, i.e. the capital used for trading), and the profit that they make, they can't reinvest, they have to take it out as profit.
How come? Why do they have to take the profits out and can’t compound it?
I know literally zero about this stuff!
I know literally zero about this stuff!
The simplistic explanation is, if you're doing arbitrage - i.e. "fixing market mispricing", there's only so much arbitrage you can do before you fix the price...
This is of course a completely theoretical proposition, because in reality you don't know what the "fair price" is. You don't even have probabilities, because those are also unobservable, you only see one version of "history".
In practice, what happens is that if you trade "too much", "shit goes wrong". Both of these things require empirical estimation and are easy to get wrong.
The most obvious is the market liquidity, which you can observe at e.g. BitStamp TradeView [1] - there's only so many orders at a given price, so the more you trade, the worse price you get (the average/marginal trade).
No professional of course trades like that, especially not HFTs, but similar problems happen at every scale - you're competing with other traders, they might have better information, there's limited amount of stock in the market, the edge/alpha/expected profit you can earn decays over time as the price moves, if you trade too much you move the market and inform other participants who can then trade against you, ...
[1] https://www.bitstamp.net/market/tradeview/
This is of course a completely theoretical proposition, because in reality you don't know what the "fair price" is. You don't even have probabilities, because those are also unobservable, you only see one version of "history".
In practice, what happens is that if you trade "too much", "shit goes wrong". Both of these things require empirical estimation and are easy to get wrong.
The most obvious is the market liquidity, which you can observe at e.g. BitStamp TradeView [1] - there's only so many orders at a given price, so the more you trade, the worse price you get (the average/marginal trade).
No professional of course trades like that, especially not HFTs, but similar problems happen at every scale - you're competing with other traders, they might have better information, there's limited amount of stock in the market, the edge/alpha/expected profit you can earn decays over time as the price moves, if you trade too much you move the market and inform other participants who can then trade against you, ...
[1] https://www.bitstamp.net/market/tradeview/
When you scale up too much it creates market impact that affects returns. You basically become too much of the market.
I know literally zero about this stuff!
I guess you will not be getting a job there
But in seriousness, when you become so big relative to the market, you become the market.
I guess you will not be getting a job there
But in seriousness, when you become so big relative to the market, you become the market.
You'd have to sacrifice the returns if you want bigger size. For every trade you do, there will be expected return (+ve) and then some costs to pay (-ve). Commissions and similar costs are only linear so not terrible. With increasing size, the market impact cost that's non-linear will soon overwhelm all other costs. So you keep adding alpha in your forecasts (via your research pipeline), that will be eaten away by the impact cost, as you scale up. If you keep it small (-ish - still gross pfolio will be billions) - then you will get to keep high returns.
All investment strategies are limited as to the amount of money they will take. They probably couldn't have ran much more without reducing perfomance.
How do you 'absorb' liquidity? Are they like some kind of financial kitchen towel?
Aren't there some shenanigans with those numbers around their larger funds not doing as well?
It's easy to make a few high margin dollars, hard to make a lot of high margin dollars.
It's easy to make a few high margin dollars, hard to make a lot of high margin dollars.
They limited the fund size so employees frequently got distributions from the fund instead of just rolling over their investments. However, the distributions were still in the millions of dollars.
They also got into some tax trouble with uncle sam and had to pay 7b in back taxes (https://www.wsj.com/articles/james-simons-robert-mercer-othe...)
They also got into some tax trouble with uncle sam and had to pay 7b in back taxes (https://www.wsj.com/articles/james-simons-robert-mercer-othe...)
depends on your definition of "few". Rentech made a "few" for very large "few".
lol . Only made tens of billion. What a failure.
it was 62% per year for 33 years.
Their returns worked out to something like an average of 39% per year after fees, which is the figure I've heard cited. This may be what they were thinking of. Renaissance was/is known for having higher fees than likely the entirety of their competition, which they can get away with since their returns still outstrip the rest after the higher fees.
The fund is closed off to outsiders, so the fees are don't matter in the same way they do for most funds. In the podcast episode on Rentec done by Acquired, the hosts speculated that rentec kept the high fees as a way to ensure they have enough to handsomely pay less tenured employees who don't yet have much money in the fund.
I'd heard that the Medallion fund was closed off, so I wasn't really sure of the reasoning behind that continuing fee structure, but that line of speculation does make some sense.
That’s a great episode and covers a lot in depth. Would recommend Acquired in general - appeals to me as interested in tech, business and finance
That is insane. Like, completely insane, shouldn't-be-possible insane.
I guess the theoretical limit to how much money you could make in the market is "the sum of all volatility", but I wonder how realistically possible it would be to even dream of beating 62% yearly.
I guess the theoretical limit to how much money you could make in the market is "the sum of all volatility", but I wonder how realistically possible it would be to even dream of beating 62% yearly.
Mathematics can only take you so far. At the end of the day, people run the exchanges. Not math.
The returns of modern HFT market makers are even higher. With their unfair “business” advantages such as PFOF, privileged dark pool and block trade access, and military internet infrastructure.
Think 60%+, per year, at least. Over 10-20 years, of course.
The returns of modern HFT market makers are even higher. With their unfair “business” advantages such as PFOF, privileged dark pool and block trade access, and military internet infrastructure.
Think 60%+, per year, at least. Over 10-20 years, of course.
> The returns of modern HFT market makers are even higher.
The returns of a child's lemonade stand are even higher...
Market makers and lemonade stands are mostly about paying for labour (and ideas etc, but let's call that 'labour', too). Capital requirements are rather low. So taking all the profit and attributing it to capital returns tends to give you weird numbers.
The returns of a child's lemonade stand are even higher...
Market makers and lemonade stands are mostly about paying for labour (and ideas etc, but let's call that 'labour', too). Capital requirements are rather low. So taking all the profit and attributing it to capital returns tends to give you weird numbers.
> So taking all the profit and attributing it to capital returns tends to give you weird numbers.
Why does it matter? Returns are returns. Money in, money out.
After all, people compare HYSA bank interest with TreasuryDirect bond returns with equity ETFs like VTI and QQQ. Each with vastly different capital mechanics.
Why does it matter? Returns are returns. Money in, money out.
After all, people compare HYSA bank interest with TreasuryDirect bond returns with equity ETFs like VTI and QQQ. Each with vastly different capital mechanics.
Yes, but there any old schmuck can put some dollars in and get the same return.
Good luck trying that with one of those very profitable market makers and funds: they don't want your capital; or at least they don't want it at the same price (= returns) that we are quoting here. Which suggests that those returns aren't attributable to that capital at all (even though for tax reasons they might structured it so that legally these are counted as capital returns, but that just obscures the underlying economic reality).
This is very similar to observing that a particular company pays a lot of money for some very simple job; but then we notice that the job is only available for the son of the CEO. We can conclude that the extra pay isn't really for that simple job.
Or when we notice that a government contractor officially charges 5000 dollars for a hammer. Unless you and me could rock up and steal market share by offering to sell hammers for 4000 dollars, it's very likely that the 5000 dollars aren't really for the hammer at all; but just some accounting shenanigans.
Good luck trying that with one of those very profitable market makers and funds: they don't want your capital; or at least they don't want it at the same price (= returns) that we are quoting here. Which suggests that those returns aren't attributable to that capital at all (even though for tax reasons they might structured it so that legally these are counted as capital returns, but that just obscures the underlying economic reality).
This is very similar to observing that a particular company pays a lot of money for some very simple job; but then we notice that the job is only available for the son of the CEO. We can conclude that the extra pay isn't really for that simple job.
Or when we notice that a government contractor officially charges 5000 dollars for a hammer. Unless you and me could rock up and steal market share by offering to sell hammers for 4000 dollars, it's very likely that the 5000 dollars aren't really for the hammer at all; but just some accounting shenanigans.
That doesn't surprise me; doesn't Citadel keep the entire bid-ask spread for every transaction they facilitate? Presumably between that and arbitrage opportunities that pop up from option contracts alone, I have no doubt that market makers clean up pretty well.
They wouldn't hire me either!
They wouldn't hire me either!
Citadel has plenty of competition, eg from Jane Street. The markets for market making are some of the most efficient markets on the planet.
When I read "The Man Who Solved The Market”, I blown away with the story of Robert Mercer who arguably paved the way for Brexit and the election of Donald Trump. I wonder how different the world would be if Simmons didn't exist, the butterfly effect can sometimes have some massive unintended consequences.
Does the book cover anything about how the fund actually works? It's understandable that they'd want to keep a tight lid on it, but I'm so curious
The book covers some earlier aspects of the strategy. And I think the "spirit" of the strategies exists today, though tangibly very different and not actionable.
no. One can infer it involves analyzing data, but for obvious reasons the ingredients for possibly reconstructing it are omitted.
I believe they were doing ML based trading. Their edge was data collection, cleaning and standardisation and the ability to trade a lot at very cheap borrowing cost. This was way before computers became a thing in trading or ML became a thing.
> Does the book cover anything about how the fund actually works?
Basically, no.
Basically, no.
I remember the time that I went to a conference put on by Sun Microsystems in the early 2000s and asked a question about certain hardware being good for main memory databases which got me jumped on by a RenTech recruiter. Had I known what was about to happen to my current job at that time (mentioned in another comment in this thread) I would have taken more interest.
You should read these books:
https://www.goodreads.com/en/book/show/43889703
https://www.goodreads.com/en/book/show/25733505
And some of the myths you have may be dispelled :-)
https://www.goodreads.com/en/book/show/43889703
https://www.goodreads.com/en/book/show/25733505
And some of the myths you have may be dispelled :-)
Both are excellent, I'll add these two too:
https://www.goodreads.com/en/book/show/186124
https://www.goodreads.com/en/book/show/482347
https://www.goodreads.com/en/book/show/186124
https://www.goodreads.com/en/book/show/482347
The phone screen was hard and I didn't pass. It's not usual tech interviews they hit you with a lot of stats and math GRE style questions. Maybe the prep in finance is different
They don't really hire finance people so I suspect most/all of the interview processes are heavy on the match/stat side.
RT must be one of the most selective companies in the world. Even to get an interview you'd better have a damn good CV (medals in math/cs/science Olympiads, degree from a top tier school etc.). And then after a few years of working there you're a (multi)millionaire. It's totally bonkers.
I don't really blame them for not picking me, clearly whatever they've been doing has been working. I'm not entitled to a job from them, obviously. I don't really know what a "top tier" university is, but I can say for sure that my undergrad (WGU) wouldn't count as that.
The PhD I'm in is from a more prestigious university [1], and I guess FAANG experience isn't enough to snag an interview with them.
[1] University of York, though I don't know if that counts as "top tier" either.
The PhD I'm in is from a more prestigious university [1], and I guess FAANG experience isn't enough to snag an interview with them.
[1] University of York, though I don't know if that counts as "top tier" either.
I've heard stories of professors getting letters in the mail from RenTech totally out of the blue. They pay so well that I'm surprised they even accept applications. Don't feel too bad about not passing their bar. What they've accomplished is essentially unheard of, and believed to be impossible by a lot of market theorists.
If it makes you feel better, my CV isn't even good enough to get a FAANG interview..
I worked at Apple as a college dropout, and got an offer from Google I didn't accept also as a dropout.
Both of them only really cared more about work history and my ability to solve whiteboard problems. Pretty much all the interviews ended up "what's another clever way to use a hashmap?"
Both of them only really cared more about work history and my ability to solve whiteboard problems. Pretty much all the interviews ended up "what's another clever way to use a hashmap?"
Really?
Google harasses anyone with a live linkedin profile.
Getting to an onsite interview is a different matter though.
I know 3 people at google, all senior, either SE or people managers.
None had brilliant academic records.
One took almost 10 years to finish his sociology adjacent undergrad.
He's the most "successful" and has been there for almost 15 years, 10 in the states.
The others have been there for like 5.
Make of this info what you wish...
Google harasses anyone with a live linkedin profile.
Getting to an onsite interview is a different matter though.
I know 3 people at google, all senior, either SE or people managers.
None had brilliant academic records.
One took almost 10 years to finish his sociology adjacent undergrad.
He's the most "successful" and has been there for almost 15 years, 10 in the states.
The others have been there for like 5.
Make of this info what you wish...
I forgot to say, none were technically amazing, just good, one not even that but not awfull either.
None had impressive intelligence either.
None had impressive intelligence either.
I read you do not apply, rather you get recruited.
That is what they said about Google....
And RT has been around for about twice as long as Google. Has a headcount of around ~300.
It's truly inspiring that they've been able to keep their headcount low over a long period of spectacular success.
Most organizations would have choked themselves on tens of thousands of bad hires long ago.
Most organizations would have choked themselves on tens of thousands of bad hires long ago.
Probably because it was run by mathematicians who I assume have no love for managing lots of people.
Combine that with how most the company spend all their time thinking about making money and that's probably why the company never succumbed to bloat
Combine that with how most the company spend all their time thinking about making money and that's probably why the company never succumbed to bloat
I think you're right.
I also think they have sufficient career progression (in terms of problems solved and $$$ earned) that nobody feels the need to build a big team. Pure speculation though, I know nothing about RenTech except that the pay is... generous.
I also think they have sufficient career progression (in terms of problems solved and $$$ earned) that nobody feels the need to build a big team. Pure speculation though, I know nothing about RenTech except that the pay is... generous.
The incentives at rentec favor low employee counts. The main fund is both limited to insiders and limited in total capital, so every new hire is judged by how much they can improve returns, if they cost more than they improve, than they're a pure net negative.
This is different from most orgs who can grow revenue through expansion of some sort, in which case the incentive often favors adding new employees. Not to mention the tendency for people in tech to be evaluated by how many people are in their org, further incentivizing adding headcount to signify your importance.
This is different from most orgs who can grow revenue through expansion of some sort, in which case the incentive often favors adding new employees. Not to mention the tendency for people in tech to be evaluated by how many people are in their org, further incentivizing adding headcount to signify your importance.
That's one thing I find interesting about hedge funds and (some, not all) finance organizations: their ability to make huge amounts of money with small staffs. IIRC RenTech's revenue per employee is something entirely absurd, in the millions.
It's just leverage. You can leverage people, capital, technology. Many companies were built leveraging large numbers of people. Many companies leverage technology. Many companies leverage capital. Gotta lever up.
Yep, they don't have products they need to maintain. Just enough infra to figure out the next profitable trade. Once heir models stop being ahead the curve, they can be just scrapped.
We had leaks from even the NSA...But never from the RT fund.
From Wikipedia: “Employees: Classified (est. 30,000–40,000)”
Obviously the number of people working on the super secret stuff is smaller, not to mentioned each project has a compartmentalized staff, but keeping secrets at this size is going to be a tough ask. They seem to do a pretty good job, but we know they’re not infallible at it. I imagine RenTech at 1/100th the size would have a vastly easier time.
Obviously the number of people working on the super secret stuff is smaller, not to mentioned each project has a compartmentalized staff, but keeping secrets at this size is going to be a tough ask. They seem to do a pretty good job, but we know they’re not infallible at it. I imagine RenTech at 1/100th the size would have a vastly easier time.
That and I believe RT has a low turnover rate.
I have to confess that I still think that. Where would you recommend I start reading to find financial enlightenment?
I think Veritasium made a really good video talking about some of the differential equations governing option pricing [1] which I found really fascinating. Patrick Boyle's video about Jim Simons' history is really interesting too [2].
Also just reading about Jim Simons' being an already-very-successful mathematician dropping everything to start a hedge fund and ending up extremely successful at the end of it was a bit of a wakeup call. Clearly this was an extremely smart dude (he was the chair of the math department at Stony Brook!), and so if this is interesting enough for someone like him, then it's probably something worth looking into.
I read through a book on basic trading strategies and I thought it was pretty interesting [3], though I've gone in a pretty different direction from what they taught.
[1] https://youtu.be/A5w-dEgIU1M
[2] https://youtu.be/xkbdZb0UPac
[3] https://www.amazon.com/Machine-Learning-Algorithmic-Trading-...
Also just reading about Jim Simons' being an already-very-successful mathematician dropping everything to start a hedge fund and ending up extremely successful at the end of it was a bit of a wakeup call. Clearly this was an extremely smart dude (he was the chair of the math department at Stony Brook!), and so if this is interesting enough for someone like him, then it's probably something worth looking into.
I read through a book on basic trading strategies and I thought it was pretty interesting [3], though I've gone in a pretty different direction from what they taught.
[1] https://youtu.be/A5w-dEgIU1M
[2] https://youtu.be/xkbdZb0UPac
[3] https://www.amazon.com/Machine-Learning-Algorithmic-Trading-...
Why would you think it was a bunch of "finance bros"? You can BS your way to the top in such things as Sales because raw intellect and mental ability is not required. The same can be said for many aspects of finance. But you can't just do HFT or Quant because you want to - you actually need skills. Same way I can't BS my way into designing a rocket - you either can or you can't.
Because I didn't know what they actually did, I assumed it was just another rebranding of the same seemingly-useless stuff that I associated with finance bros.
I mentioned in the very comment that you're replying to that I was wrong.
I mentioned in the very comment that you're replying to that I was wrong.
When have high frequency traders and quants ever been finance bros? Wut?
Again, I was wrong and I acknowledged that, but I guess I grouped HFT and Quants into the same camp as the characters from American Psycho.
They're different groups, I respect them now and feel dumb for not respecting them before.
They're different groups, I respect them now and feel dumb for not respecting them before.
The very early quants (people who did rough mental options math in the Chicago pits in the 1970s) were finance bros by osmosis. You had to be.
It changed at some point during the '80s, probably to no little degree thanks to Renaissance.
It changed at some point during the '80s, probably to no little degree thanks to Renaissance.
What a loss. I hope I join the community in wishing the best for his loved ones.
But also what a life. He could have quit 10, 20, 30, 40, 50 years ago and been in the history books. What’s now called Chern-Simons is a monumental result in topology that IIRC dates to the mid-60s.
Then he empirically disproved the strong-form EMH, a result in economics of which I’m unaware of any peer in its conclusiveness.
Then he built SUNY Stoneybrook into possibly the best lab for topology and differential geometry in the world.
Geometer, topologist, cryptographer, outspoken and fearless critic of needless war, trader, teacher, monument.
Legend. May he rest.
But also what a life. He could have quit 10, 20, 30, 40, 50 years ago and been in the history books. What’s now called Chern-Simons is a monumental result in topology that IIRC dates to the mid-60s.
Then he empirically disproved the strong-form EMH, a result in economics of which I’m unaware of any peer in its conclusiveness.
Then he built SUNY Stoneybrook into possibly the best lab for topology and differential geometry in the world.
Geometer, topologist, cryptographer, outspoken and fearless critic of needless war, trader, teacher, monument.
Legend. May he rest.
> Then he empirically disproved the strong-form EMH
Not clear as we do not really know exactly how RenTech works. It is believed that there are substantial tax loopholes that were taken advantage of - which would go a long way (not all the way) to explaining the incredible performance of his fund.
Not clear as we do not really know exactly how RenTech works. It is believed that there are substantial tax loopholes that were taken advantage of - which would go a long way (not all the way) to explaining the incredible performance of his fund.
Every serious finance company knows how to optimize taxes.
Simons was returning 25-50% on 8BN AUM at Medallion every year with one or two exceptions every year for 30 years.
Even the hedge funds we let openly operate with black edge in plain sight can rarely do that for 3-5 years.
It’s obviously debatable unless they open the books, but it’s pretty much common knowledge which funds are bending the rules (flagrantly violating securities law), and I’m unaware that Medallion was anything other than just there first.
Simons was returning 25-50% on 8BN AUM at Medallion every year with one or two exceptions every year for 30 years.
Even the hedge funds we let openly operate with black edge in plain sight can rarely do that for 3-5 years.
It’s obviously debatable unless they open the books, but it’s pretty much common knowledge which funds are bending the rules (flagrantly violating securities law), and I’m unaware that Medallion was anything other than just there first.
Rentec gets a lot of leverage and gets ridiculous pricing on option trades from the banking desks because of the flow they bring.
> Rentec gets a lot of leverage and gets ridiculous pricing on option trades from the banking desks because of the flow they bring.
So do about 200 other funds world wide. Their leverage and sell side pricing isn't what makes them successful, as most other large funds trade as much as them and get atleast the same pricing as they do.
So do about 200 other funds world wide. Their leverage and sell side pricing isn't what makes them successful, as most other large funds trade as much as them and get atleast the same pricing as they do.
RenTec’s volume is much higher. They are the sheikhs of the street.
Leverage makes a huge difference. If a strategy nets on average 0.1% a day and if RenTec can trade at 2x more leverage than their counterparts, they will post 60% pa vs 30% pa.
Leverage makes a huge difference. If a strategy nets on average 0.1% a day and if RenTec can trade at 2x more leverage than their counterparts, they will post 60% pa vs 30% pa.
I recommend the book “When Genis Failed” for a blow by blow of how fucking stupid you can be and still get a Nobel in Ecobnomics.
Economists are stupid or wrong or bought. Or all of the above.
Friedman? Come back when you’ve got someone better.
Economists are stupid or wrong or bought. Or all of the above.
Friedman? Come back when you’ve got someone better.
huh?
RenTech trades far less than many of the market makers in the US, and they get the same funding rates as the rest of the big players. I don't know their specific situation, but the fact that all the big players get the same rates indicates RenTech isn't special in this way.
They have no size or leverage advantage that 200 other funds in the US don't have.
They have no size or leverage advantage that 200 other funds in the US don't have.
@dang I think this merits a black bar.
Last month an amazing biographical podcast came out describing his personal journey to starting rentech, and the factors that make the business so competitive.
Certainly worth a listen https://www.acquired.fm/episodes/renaissance-technologies
Certainly worth a listen https://www.acquired.fm/episodes/renaissance-technologies
I listen to Acquired religiously, but felt this particular episode was pretty weak. They went through Zuckerman's The Man Who Solved the Market [0] chapter by chapter, butchering a few parts because the hosts don't know quant finance well (though they seem to know VC and product very well).
I'd recommend just reading the book instead. I'd also recommend Derman's My Life as a Quant [1] for a broader take at other firms around the same time that Renaissance was taking off.
[0] https://a.co/d/6x7ALkr
[1] https://a.co/d/5vWBOce
I'd recommend just reading the book instead. I'd also recommend Derman's My Life as a Quant [1] for a broader take at other firms around the same time that Renaissance was taking off.
[0] https://a.co/d/6x7ALkr
[1] https://a.co/d/5vWBOce
It's tough because of how little material is out there.
I will say, I thought their hypothesis on why the fees are so high was very astute. Can't know if it's true or not, but it feels very compelling.
I will say, I thought their hypothesis on why the fees are so high was very astute. Can't know if it's true or not, but it feels very compelling.
The wealth transfer hypothesis I didn’t really get, but their other hypothesis that it’s a way to nudge non-employees out of the fund is probably right.
I think "wealth transfer" is a poor description. Really it's just a way to ensure they have enough money to compensate (very highly) less tenured employees, and to align incentives better (i.e. not just being paid because you're already rich and tenured).
Yes, I agree. That's a less loaded way of explaining it.
This is by far my favorite podcast series, I’d recommend the ones on Costco, Amazon, and Nvidia as well.
Acquired is amazing. They recently did one on Microsoft which is great too.
Their Novo Nordisk one is really great too!
The podcast seems like a death sentence. They did one on Charlie Munger and he died a few weeks after. Jim Simons also died a few weeks after his episode aired.
Came here to recommend this. This podcast is a good overview for RenTech and their other episodes are good for other companies. Especially the Nintendo series.
They also did an interview with Charlie Munger right before he died. They have good...timing, for sure.
They also did an interview with Charlie Munger right before he died. They have good...timing, for sure.
As an alum of Stony Brook, I’m grateful for all Jim Simons did for the university. Aside from having been the chairman of the math department, he’s the reason we have the Simons Center for Geometry and Physics, as well as the “Renaissance” School of Medicine. Not to mention his recent gift of $500 million—the largest unrestricted donation to a public university in American history. I’m sure there’s much, much more that he’s done that I’m not even aware of.
The Simons Foundation has had an enormous, transformative impact on neuroscience as well. It’s widely considered among the most incisive, forward-looking sources of funding in the field, pushing for fundamental advances to solve “tomorrow’s problems.” https://www.simonsfoundation.org/collaborations/#global-brai...
I'm personally grateful to Jim Simons -- and his foundation -- for supporting and extending mathematical research in Berkeley, and throughout the world.
Jim Simons did fundamental research in topology; his work in mathematics, cryptography, and topological quantum field theory.
Beyond this, he pressed for higher quality public education in math and encouraging training and presige for math teachers.
Jim Simons did fundamental research in topology; his work in mathematics, cryptography, and topological quantum field theory.
Beyond this, he pressed for higher quality public education in math and encouraging training and presige for math teachers.
Archive link for original article: https://archive.ph/zIx9b
Simons also funded Quanta magazine: https://www.quantamagazine.org/about/
His Wikipedia page is interesting: https://en.wikipedia.org/wiki/Jim_Simons_(mathematician)
Simons also funded Quanta magazine: https://www.quantamagazine.org/about/
His Wikipedia page is interesting: https://en.wikipedia.org/wiki/Jim_Simons_(mathematician)
thank you, the page renders empty for me.
Yeah, it's effectively a placeholder for me. No content whatsoever.
https://youtu.be/QNznD9hMEh0?si=XrLiIDUV4WMfIz2V
Interesting Numberphile interview with Jim, if you're not aware who he is
Interesting Numberphile interview with Jim, if you're not aware who he is
I was lucky enough to see him speak at the Simons' Center for Geometry and Physics at Stony Brook as an undergrad, even though I had no idea what he was talking about (he was explaining the math behind the sculpture he had contracted for the university). He's always been an inspiration to me and I would strongly recommend (as other commenters already have) the book "The Man who Solved the Market" which gives the history of Renaissance Technologies. Whether it's his career in Math/Physics, or career in the stock market, he was at the top of the game. His contributions to the university in combination with his Philanthropic efforts to improve Math education are likely his greatest contributions to humanity. It's highly likely that my tuition was paid for by someone who worked for him at the Hedge Fund, or maybe even Simons himself. Rest In Peace Jim. :'(
This person made a lot of money, so it’s easy to say that he’s part of the machine. But, the man had principles. And he stood by them. Grateful for him showing us the way.
"the machine"? What is "the machine", the economy?
I meant the financial-industrial complex that dictates our economy.
Other principles that he famously stood for against the machine was opposing the Vietnam war when he was a cryptographer for the US government machine.
He wasn't really dictating anything. He was just in the casino playing a better game of poker (I don't mean that in a bad way).
https://en.wikipedia.org/wiki/Jim_Simons_(mathematician)#Pol...
> Since 1990, Renaissance Technologies has contributed $59,081,152 to federal campaigns and since 2001, and has spent $3,730,000 on lobbying as of 2016.
Let's not kid ourselves, people at this level of wealth and power can very much make their voice heard by the people who make policy. He's definitely not the only one in this position, but to frame him as a "better casino player" who is "not really dictating anything" is naive at best.
> Since 1990, Renaissance Technologies has contributed $59,081,152 to federal campaigns and since 2001, and has spent $3,730,000 on lobbying as of 2016.
Let's not kid ourselves, people at this level of wealth and power can very much make their voice heard by the people who make policy. He's definitely not the only one in this position, but to frame him as a "better casino player" who is "not really dictating anything" is naive at best.
That's just rich people being rich. Rentech had people donating to both sides based on their personal ideology. The "financial industrial complex" generally refers to large financial institutions systematically driving regulation and/or PE controlling a large chunk of economic activity.
Rentech is a bunch of gamblers gambling and spending their money no different to any other rich people.
Rentech is a bunch of gamblers gambling and spending their money no different to any other rich people.
Simon’s business partner, Mercer, bet big on Trump in 2016:
https://www.newyorker.com/magazine/2017/03/27/the-reclusive-...
I am under the impression this might have been a bad look for RenTech hence Mercer leaving the firm.
https://www.newyorker.com/magazine/2017/03/27/the-reclusive-...
I am under the impression this might have been a bad look for RenTech hence Mercer leaving the firm.
He took money out of the machine and donated it to good causes. Arguably he was anti machine
Not only that.
He was intellectual honest and technically exceptional.
He was intellectual honest and technically exceptional.
I went to a Simons Foundation lecture in like 2014. The topic and speaker escapes me now, but at the reception beforehand there there was an old man smoking. At the time I indulged myself so I asked the guy that invited me if I could smoke there too. He said, "only Jim can smoke in here." And that's the first time I had any idea who Jim Simons was.
Jim never gave a fuck and smoked even in investor meetings.
This is sad news indeed. The Simons Institute [1] in the UC Berkeley campus has had a positive impact in my life in terms of the many high quality talks (both in terms of content and recording quality) that they continue to put up on YouTube [2], while making it free to attend in online or in person (you have to register online). My wife and I have attended quite a few of them in person, and for people like us who are interested in learning but have no direct line into academia, this was one of the few avenues where we could learn what various researchers and research groups were working on, and interact with them. I had heard of the Medallion fund before I was aware of the Simons Institute but I never put the two together till a comment, either here or on reddit, mentioned Jim Simons as the connection.
[1] https://simons.berkeley.edu/homepage
[2] https://www.youtube.com/@SimonsInstituteTOC
[1] https://simons.berkeley.edu/homepage
[2] https://www.youtube.com/@SimonsInstituteTOC
I highly recommend the book "The Man Who Solved the Market" by Gregory Zuckerman which explains how Simons build his infamous company.
https://www.amazon.com/Man-Who-Solved-Market-Revolution/dp/0...
https://www.amazon.com/Man-Who-Solved-Market-Revolution/dp/0...
+1 for this book. It's a great way to understand what he did.
I started reading the last chapter this afternoon.
infamous implies bad.
Well it’s an algo trading company.
I have algos running that trade for me in personal accounts. Of course it's not the volume that the big shops are trading, but the whole "algo traders/market makers bad" thing is always a fun one to see.
Finding anomalies that develop into a mean reversion trading algorithm is actually one of the more fulfilling things I've done. Only a few other things in my life have matched the amount of grit and brainpower I've had to use to get something like this accomplished. A team or company stretching the limits of statistics and computer science to do the same seems like something worthwhile to me.
Now we can get into some areas that may be borderline unethical, like certain types of front running, but a blanketed statement isn't a fair thing to cast on the industry as a whole.
Finding anomalies that develop into a mean reversion trading algorithm is actually one of the more fulfilling things I've done. Only a few other things in my life have matched the amount of grit and brainpower I've had to use to get something like this accomplished. A team or company stretching the limits of statistics and computer science to do the same seems like something worthwhile to me.
Now we can get into some areas that may be borderline unethical, like certain types of front running, but a blanketed statement isn't a fair thing to cast on the industry as a whole.
Please explain why quantitative algo (not HFT) trading is “bad”?
Why do you make the distinction from HFT? At their heart they're both the same thing. You're using algorithms to trade and eventually manipulate markets. What kind of value are you adding to the whole system?
The distinction in my mind is HFT is “worse” for market participants because of the front running of large orders between exchanges.
I’d argue this cross exchange arbitrage does still provide some value by keeping prices of securities across exchanges/the world in sync, despite being quite unfair and taking value from those putting in large orders.
Liquidity provided by algo market makers is also a service to market participants because they take risk to ensure there is always someone to buy or sell - this reduces volatility and risk for everyone.
Algo trading is also required for keeping ETFs in line their benchmarks, which is an entirely separate subject you could fill a book with.
So no, all algo trading is not the same thing, there are valid and productive uses of code rather than people shouting across a pit or running slips up and down roads to keep capital flowing through markets efficiently.
I’d argue this cross exchange arbitrage does still provide some value by keeping prices of securities across exchanges/the world in sync, despite being quite unfair and taking value from those putting in large orders.
Liquidity provided by algo market makers is also a service to market participants because they take risk to ensure there is always someone to buy or sell - this reduces volatility and risk for everyone.
Algo trading is also required for keeping ETFs in line their benchmarks, which is an entirely separate subject you could fill a book with.
So no, all algo trading is not the same thing, there are valid and productive uses of code rather than people shouting across a pit or running slips up and down roads to keep capital flowing through markets efficiently.
His interview on Numberphile is great- very smart guy:
https://www.youtube.com/watch?v=QNznD9hMEh0
https://www.youtube.com/watch?v=QNznD9hMEh0
I work at a trading firm. RIP to the GOAT, the god of quants.Reading about him and RenTec, back in high school, was one of the first things that got me attracted to the field.
Acquired Podcast did a 3 hours episode on the history of Renaissance Technologies last month.
https://www.youtube.com/watch?v=2KjW4BqNFy0
https://www.youtube.com/watch?v=2KjW4BqNFy0
"My algorithm has always been: You put smart people together, you give them a lot of freedom, create an atmosphere where everyone talks to everyone else. They're not hiding in the corner with their own little thing. They talk to everybody else. And you provide the best infrastructure. The best computers and so on that people can work with and make everyone partners"
> create an atmosphere where everyone talks to everyone else.
The company is an interesting example of Conway's Law[1]. I learned from the recent Acquired episode on RenTech[2] that in contrast to how most other firms work, there is only a single model within RenTech that everyone contributes to. You don't have a bunch of small teams working in silos building specialized or competing models. As a result, every new development gets shared with the whole group.
1. [O]rganizations which design systems are constrained to produce designs which are copies of the communication structures of these organizations.
2. https://www.acquired.fm/episodes/renaissance-technologies
The company is an interesting example of Conway's Law[1]. I learned from the recent Acquired episode on RenTech[2] that in contrast to how most other firms work, there is only a single model within RenTech that everyone contributes to. You don't have a bunch of small teams working in silos building specialized or competing models. As a result, every new development gets shared with the whole group.
1. [O]rganizations which design systems are constrained to produce designs which are copies of the communication structures of these organizations.
2. https://www.acquired.fm/episodes/renaissance-technologies
if only more companies fostered the idea of employee wellbeing
A somewhat cynical take is that "smart people" is doing a lot of work here. If you get to restrict your hiring to people who have proven themselves to be world-class in something, they are probably much more likely to respond to freedom by pursuing something than by coasting (or worse).
Yeah an unpopular and maybe socially inconvenient thing to say at parties, but the more I manage operational teams, the more I find this true. Bureaucracy stoops down to the lowest common denominator of the group. Smart people capable of self-motivating and self-organizing don’t need a lot of bureaucratic structure if given enough incentive and freedom.
Being promised millions is a lot of incentive.
Being promised millions is a lot of incentive.
Employee wellbeing is overrated.
In fact, standard economic theory would say that it is better to pay people more instead doing anything else.
In fact, standard economic theory would say that it is better to pay people more instead doing anything else.
Pretty good run for an adult life-long heavy smoker.
I forgot which interview that was, but Jim mentioned that some folks are genetically less affected by smoking - and the he did such a test and he seems not to be affected by it and that this was the reason why he didn't stop.
This is really sad. Simons definitely had some views I don't agree with, but he was one of the good ones overall.
Specifically, I hope the Simons Foundation continues to fund Math for America. My wife participated in this program, and it helped her become an excellent educator while also _significantly_ helping her financially.
Specifically, I hope the Simons Foundation continues to fund Math for America. My wife participated in this program, and it helped her become an excellent educator while also _significantly_ helping her financially.
what views of his do you disagree with?
Simmons is one of the greatest people and a true inspiration as a mathematician, even though my career drifted from academia. He and Andrew Wiles are the reason why I always say I am a mathematician, even though I work elsewhere.
RIP
RIP
The news item is blocked by many ad-blockers, including my Brave browser. Using Firefox I see the text:
Simons Foundation Co-Founder, Mathematician and Investor Jim Simons Dies at 86 By Thomas Sumner May 10, 2024 Simons Foundation co-founder and chair emeritus Jim Simons. © Béatrice de Géa
It is with great sadness that the Simons Foundation announces the death of its co-founder and chair emeritus, James Harris Simons, on May 10, 2024, at the age of 86, in New York City.
Jim (as he preferred to be called) was an award-winning mathematician, a legend in quantitative investing, and an inspired and generous philanthropist.
Together with his wife, Simons Foundation chair Marilyn Simons, he gave billions of dollars to hundreds of philanthropic causes, particularly those supporting math and science research and education. In 1994, they established the Simons Foundation, which supports scientists and organizations worldwide in advancing the frontiers of research in mathematics and the basic sciences.
Jim was active in the work of the Simons Foundation until the end of his life, and his curiosity and lifelong passion for math and basic science were an inspiration to those around him. He was determined to make a meaningful difference in the level of support that mathematics and basic sciences received in the United States, notably by sponsoring projects that were important but unlikely to find funding elsewhere.
Over its 30-year history, the Simons Foundation’s work has led to breakthroughs in our understanding of autism, the origins of the universe, cellular biology and computational science. Jim and Marilyn’s giving continues to support the next generation of mathematicians and scientists at schools and universities in New York City and around the world.
Jim frequently said that he went through three phases in his professional life: mathematician, investor and philanthropist. He previously chaired the math department at Stony Brook University in New York, and his mathematical breakthroughs during that time are now instrumental to fields such as string theory, topology and condensed matter physics.
In 1978, Jim founded what would become Renaissance Technologies, a hedge fund that pioneered quantitative trading and became one of the most profitable investment firms in history. He then turned his focus to making a difference in the world through the Simons Foundation, Simons Foundation International, Math for America and other philanthropic efforts.
“Jim was an exceptional leader who did transformative work in mathematics and developed a world-leading investment company,” says Simons Foundation president David Spergel. “Together with Marilyn Simons, the current Simons Foundation board chair, Jim created an organization that has already had enormous impact in mathematics, basic science and our understanding of autism. The Simons Foundation, an in-perpetuity foundation, will carry their vision for philanthropy into the future.”
Jim Simons is survived by his wife, three children, five grandchildren, a great-grandchild, and countless colleagues, friends and family who fondly recall his genuine curiosity and quick wit.
We know that many people have stories, messages and memories they would like to share about Jim. Please send them to [email protected].
Information on memorial services and other events honoring Jim’s life and legacy will be posted on the Simons Foundation website.
Simons Foundation Co-Founder, Mathematician and Investor Jim Simons Dies at 86 By Thomas Sumner May 10, 2024 Simons Foundation co-founder and chair emeritus Jim Simons. © Béatrice de Géa
It is with great sadness that the Simons Foundation announces the death of its co-founder and chair emeritus, James Harris Simons, on May 10, 2024, at the age of 86, in New York City.
Jim (as he preferred to be called) was an award-winning mathematician, a legend in quantitative investing, and an inspired and generous philanthropist.
Together with his wife, Simons Foundation chair Marilyn Simons, he gave billions of dollars to hundreds of philanthropic causes, particularly those supporting math and science research and education. In 1994, they established the Simons Foundation, which supports scientists and organizations worldwide in advancing the frontiers of research in mathematics and the basic sciences.
Jim was active in the work of the Simons Foundation until the end of his life, and his curiosity and lifelong passion for math and basic science were an inspiration to those around him. He was determined to make a meaningful difference in the level of support that mathematics and basic sciences received in the United States, notably by sponsoring projects that were important but unlikely to find funding elsewhere.
Over its 30-year history, the Simons Foundation’s work has led to breakthroughs in our understanding of autism, the origins of the universe, cellular biology and computational science. Jim and Marilyn’s giving continues to support the next generation of mathematicians and scientists at schools and universities in New York City and around the world.
Jim frequently said that he went through three phases in his professional life: mathematician, investor and philanthropist. He previously chaired the math department at Stony Brook University in New York, and his mathematical breakthroughs during that time are now instrumental to fields such as string theory, topology and condensed matter physics.
In 1978, Jim founded what would become Renaissance Technologies, a hedge fund that pioneered quantitative trading and became one of the most profitable investment firms in history. He then turned his focus to making a difference in the world through the Simons Foundation, Simons Foundation International, Math for America and other philanthropic efforts.
“Jim was an exceptional leader who did transformative work in mathematics and developed a world-leading investment company,” says Simons Foundation president David Spergel. “Together with Marilyn Simons, the current Simons Foundation board chair, Jim created an organization that has already had enormous impact in mathematics, basic science and our understanding of autism. The Simons Foundation, an in-perpetuity foundation, will carry their vision for philanthropy into the future.”
Jim Simons is survived by his wife, three children, five grandchildren, a great-grandchild, and countless colleagues, friends and family who fondly recall his genuine curiosity and quick wit.
We know that many people have stories, messages and memories they would like to share about Jim. Please send them to [email protected].
Information on memorial services and other events honoring Jim’s life and legacy will be posted on the Simons Foundation website.
At least for me, even with adblock turned off it still doesn't appear. Thank you for reposting!
He was writing his memoir.
I really hope he finnished it, I was looking forward to reading it.
I really hope he finnished it, I was looking forward to reading it.
While I'm not one to fawn after billionaires, I found his life story and personality really fascinating. He really seemed to maintain a humble approach, and in the Numberphile interview, which is excellent, he really emphasized the notion of luck in success. He donated a ton of money in very targeted ways that have been extremely successful. I think because of his humble approach, lack of self-promotion, etc., he's a bit unknown outside certain circles, but his impact in certain areas has been big.
While I wish that our country didn't have to rely on billionaires spearheading initiatives, which often goes the wrong way, Simons was absolutely an example of one of the good ones.
https://www.youtube.com/watch?v=QNznD9hMEh0
While I wish that our country didn't have to rely on billionaires spearheading initiatives, which often goes the wrong way, Simons was absolutely an example of one of the good ones.
https://www.youtube.com/watch?v=QNznD9hMEh0
If you are interested in learning about the history of Rentech and Jim Simon’s life I highly recommend this podcast: https://www.acquired.fm/episodes/renaissance-technologies
This is a huge loss for both the scientific community and the quant investing community!
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Just to add to the list of this Jim Simons did and funded, he also established the Simons Foundation Autism Research Initiative (SFARI).
"SFARI’s mission is to improve the understanding, diagnosis and treatment of autism spectrum disorders by funding innovative research of the highest quality and relevance."
SFARI in turn funds a lot of foundational neurological and rare disease research, since autism is such a common phenotype.
"SFARI’s mission is to improve the understanding, diagnosis and treatment of autism spectrum disorders by funding innovative research of the highest quality and relevance."
SFARI in turn funds a lot of foundational neurological and rare disease research, since autism is such a common phenotype.
There is a nice book that goes into detail of his life called: "The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution"
RIP. He did a lot of great things w/ his life. Per the books about him, he was a life long smoker. Lucky he got to 86!
https://twitter.com/quant_arb/status/1631052354408665091?lan...
https://twitter.com/quant_arb/status/1631052354408665091?lan...
Here’s a New Yorker profile from 2017
https://www.newyorker.com/magazine/2017/12/18/jim-simons-the...
https://www.newyorker.com/magazine/2017/12/18/jim-simons-the...
Heads up: website breaks on Fennec with uBlock Origin turned on (and all filters enabled). Website unbreaks when uBlock Origin is turned off. Looks like a new way to punish uBlock.
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My favorite Simons interview.
https://www.youtube.com/watch?v=QNznD9hMEh0
https://www.youtube.com/watch?v=QNznD9hMEh0
I hope there will be people who really like mathematics to inherit his legacy and continue on. The world cannot develop without mathematics
[deleted]
A great scientist. Rest peacefully Prof Simons. He probably deserved the Nobel for Chern-Simons theory.
I'm literally reading the last chapter of "The Man Who Solved the Market" right now. RIP
[deleted]
I would not be surprised if RenTec had developed GPT way before OpenAI and kept mum about it.
RIP, I regularly read quanta magazine. It seems he has supported science a lot.
Tragic news; he was my personal inspiration for getting into algotrading and founding https://grizzlybulls.com. The ultimate counter-example to the Efficient Market Hypothesis. RIP
One of the most impactful men of our generation.
He will be remember for lifetimes
He will be remember for lifetimes
Damn! - with all anyone has to say - thats really sad to hear.
Oh my god, may he rest in peace. I enjoyed listening to him
RIP. A good guy and a good foundation.
Anyone knows the cause of death?
Anyone knows the cause of death?
A true legend. RIP.
So sad. He seamed like an extraordinary man.
Did he share some book recommendations?
you'd think Jim would get a black bar on this site.
What actually is the criteria? Or it just depends on how @dang is feeling.
Jim is a hero in science, data, computing and finance. What else did he need to do?
What actually is the criteria? Or it just depends on how @dang is feeling.
Jim is a hero in science, data, computing and finance. What else did he need to do?
Sometimes people act like guys like Bill Gates or Elon Musk are coming from deep personal scientific knowledge and accomplishment, but they're absolutely nothing compared to Simons. His contributions to geometry in the 60s and 70s, from minimal surfaces to Berger's classification of special holonomy to Chern-Simons theory, were fundamental and are still well-remembered. His name would be known even if he'd never gone into finance or philanthropy.
Bill Gates did graduate study in math and computer science as a first-year undergraduate at Harvard College, and published the fastest pancake-sort algorithm (held the record for 30 years), before dropping not to start Microsoft. And of course he invented Microsoft's early technology, which advanced the state of the art. He was highly likely to be a great computer scientist if he chose to stay in school.
I can read both the Gates-Papadimitriou paper and Simons' work, and it doesn't compare. Maybe Gates could have been a great scientist, who knows, but no matter how many advanced classes he took, he never was. It doesn't even matter if he got good grades in them.
Bill gates did math 55. legit smart guy
I was classmates with several people who did well in Math 55, and knew some people who were teaching fellows for it. Very smart folks but they themselves would not have compared themselves to Simons as mathematicians, esp. at age 18.
You don't need to be a smart guy to take math 55, nor is 'being a smart guy' what I'm even talking about.
maybe you should have written what you meant to talk about
Friend, there's a world of difference between being a smart guy who completed a hard math class and being one of the world's best researchers in differential geometry.
> Bill Gates had the aptitude to be a leading researcher at probably anything if he set out to do it. He was already doing coding whilst working on math courses, so his attention was divided. Simons focused 100% on math until doing trading.
Ok, I guess you're right. A smart guy who completes a hard math class and is even also doing coding can probably do anything he wants.
Ok, I guess you're right. A smart guy who completes a hard math class and is even also doing coding can probably do anything he wants.
Bill Gates had the aptitude to be a leading researcher at probably anything if he set out to do it. He was already doing coding whilst working on math courses, so his attention was divided. Simons focused 100% on math until doing trading.
Need a tracker for medallion fund
One of the greatest. RIP
He was a legend. RIP.
Maybe a black bar on top of HN?
Maybe a black bar on top of HN?
Medallion fund
@dang may we have a black banner? thank you.
RIP
RIP.
He was a real cool guy.
He was a real cool guy.
Really sad. I looked up to him. Trying to achieve brilliance in a field and then gathering a brilliant team and making money and then giving back is a great way to live.
dukeofdoom(1)
xqcgrek2(1)
I might be naive but it seems unfortunate that so many bright minds end up using their talents to catch trillions of pennies in the financial markets.
What you said might be true, but he's like THE outlier of this trope though.
[deleted]
Don't think about the money. Money flows in one direction, but corporate decisions, organization of resources, manufacturing activity -- real physical flows, energy flows, mass flows -- move opposite. What "finance" really is is improving allocation of those real resources, and then skimming a little bit off of the improvement. Fundamentally, money is a signal for the expenditure of energy. The flow of money, the signal, can be analyzed and applied optimally to improve the expenditure of energy.
If the world's production capacity is a giant muscle, finance is like the brain. Spending 20 watts of brainpower to move a 100 watt muscle in the right way can be hugely effective, far more effective than a 1000 watt muscle with 5 watts of brain.
This is really what finance does. They improve the movement of the muscle.
If the world's production capacity is a giant muscle, finance is like the brain. Spending 20 watts of brainpower to move a 100 watt muscle in the right way can be hugely effective, far more effective than a 1000 watt muscle with 5 watts of brain.
This is really what finance does. They improve the movement of the muscle.
Your comment just made me wonder if the catching of those trillions of pennies makes the markets more efficient.
(Not an economist, and I don't pretend to know.)
(Not an economist, and I don't pretend to know.)
I think the efforts do make the markets more efficient, and it would be hard to argue the opposite.
I'm just wondering out loud if that's a meaningful use of such a large percentage of top talent. I'm not faulting anyone who chooses to go that way. There's a lot of money to be made. To me, it seems unfortunate that we don't better incentive pursuit of science/engineering.
This paper breaks down how many people from top schools (MIT, Yale, Harvard) get jobs in finance. It's between 20-30% of the graduating class every year.
https://www.hbs.edu/ris/Publication%2520Files/16-067_3d306ef...
I'm just wondering out loud if that's a meaningful use of such a large percentage of top talent. I'm not faulting anyone who chooses to go that way. There's a lot of money to be made. To me, it seems unfortunate that we don't better incentive pursuit of science/engineering.
This paper breaks down how many people from top schools (MIT, Yale, Harvard) get jobs in finance. It's between 20-30% of the graduating class every year.
https://www.hbs.edu/ris/Publication%2520Files/16-067_3d306ef...
Trading is just like, a lot of fun you know?
Atleast that's my primary motivation for it.
Atleast that's my primary motivation for it.
I bet it's partially that the money is good, and partially that the puzzles are enticing.
dumb comment. he did more than that. consider his catching pennies helped others who chose other vocations.
He did a few other things also. RenTech didn't even require all his time.
[deleted]
Anyone got a link to the rentec money machine source code? I fancy an early retirement.
Jokes aside, really sad to hear this. The guy did a lot of good with the money from what I understand
Jokes aside, really sad to hear this. The guy did a lot of good with the money from what I understand
(If the source were available to you, then it would be available to all the other funds, and so it would instantly stop making money.)
It is not just one source. probably constant revision
The reality is that most extremely wealthy people are very far on the right tail of intelligence. People exist that can predict the market, they are just very rare.
> People exist that can predict the market, they are just very rare.
It's not hard to predict the market. It's hard to beat the market.
I can very easily predict that Tesla will continue to lose share price (as one example). I cannot use that prediction to make money.
As they say, "It's Priced In"
It's not hard to predict the market. It's hard to beat the market.
I can very easily predict that Tesla will continue to lose share price (as one example). I cannot use that prediction to make money.
As they say, "It's Priced In"
If by prediction you mean a statement in which there is nothing at stake, yes, anyone can do that
While mister Simons might not be the best example, I sometimes feel that you can easily beat the market if you are well connected and have access to information that can move the markets before anyone else. For example how much know-how do you need to beat the market if you're a US senator? You know before anyone else what's going to happen regarding policy and can plan accordingly.
There were rumours about this even regarding Simons' Medallion fund. About how all the talk about math and algorithms was just a red herring to divert from the fact that it was mostly insider knowledge that did the heavy lifting. Alas these rumours were never confirmed as far as I know.
"There are 3 ways to make a living in this business: be first, be smarter or cheat" - Margin Call
it would seem like RenTec is the first two
You have no clue, sorry. Insider trading cannot generate the consistency and returns as RenTec does. Even insider traders lose money if the market does not react as expected.
There are tons of strategies out there that does not involve insider trading or fraud. One such example is simply shorting Bitcoin at the market open whilst going long QQQ. This has paid a lot , like today , in which Bitcoin is down 3% and QQQ down a tad. There are people running this strategy now which despite being public knowledge, is still profitable. Shorting bitcoin during market hours, in fact, realizes all of the downside of Bitcoin without the upside from shorting it.
There are other strategies like this. now imagine you assemble the greatest minds in the world and tons of computing power to find many strategies and run them 24-7.
There are tons of strategies out there that does not involve insider trading or fraud. One such example is simply shorting Bitcoin at the market open whilst going long QQQ. This has paid a lot , like today , in which Bitcoin is down 3% and QQQ down a tad. There are people running this strategy now which despite being public knowledge, is still profitable. Shorting bitcoin during market hours, in fact, realizes all of the downside of Bitcoin without the upside from shorting it.
There are other strategies like this. now imagine you assemble the greatest minds in the world and tons of computing power to find many strategies and run them 24-7.
Whether it’s a scam or not, I’ve seen a couple .onion sites for trading insider knowledge. You have to tell something to get in.
Beating the S&P 500 is difficult and there are now zero fee funds to mimic it.
Beating the S&P 500 is difficult and there are now zero fee funds to mimic it.
Big funds usually dont try to beat the market, they try to dampen volaility while tracking the S&P 500
even small funds, this was the investment thesis at the hedgefund that my dad worked for circa 2006-2008. they promised super dampened volatility but, as you might guess, they went belly up during the great recession.
The cause? Someone, somewhere in their financial product chain was not being faithful about the volatility of the asset they were basing their whole model on so when the market went tits up they did to.
The cause? Someone, somewhere in their financial product chain was not being faithful about the volatility of the asset they were basing their whole model on so when the market went tits up they did to.
yeah. 'market neutrality' often means misplaced/unseen risk elsewhere
It is difficult but doable. most people would be better served to not try.
One can make any sort of outlandish claim, but there's little point in giving undue attention to entirely baseless speculation.
That kind of theory is the same as chemtrails are real.
Insider trading exists but the amount of secrecy to make that theory a reality would be unobtainable.
Insider trading exists but the amount of secrecy to make that theory a reality would be unobtainable.
There are US senators that make millions by using their spouses as intermediaries to buy and sell shares. Insider trading as a crime only exists for those that are not well connected enough
I am not denying small cash is being made like that. I am referring to the argument that the Medallion fund was a purely a play on insider trading.
Those senators just trade on their own behalf because its not illegal to.
Why would they involve their spouse? If it was illegal for them to trade but their spouse made a trade it would be trivial for the SEC to trace it back to intel they learned.
Why would they involve their spouse? If it was illegal for them to trade but their spouse made a trade it would be trivial for the SEC to trace it back to intel they learned.
It is illegal. https://www.congress.gov/bill/112th-congress/senate-bill/203...
You are right that enforcement is weak, but that is not because it is legal. The notion that members of Congress can legally trade on knowledge derived from or used in the performance of their duties has not been true for over a decade at this point.
You are right that enforcement is weak, but that is not because it is legal. The notion that members of Congress can legally trade on knowledge derived from or used in the performance of their duties has not been true for over a decade at this point.
https://campaignlegal.org/update/stock-act-failed-effort-sto...
No congress can trade on insider information full stop
https://blogs.luc.edu/compliance/?p=4459
> Simply put, insider trading is illegal. But, if you are a member of Congress, there is a loophole. Members of Congress and their families are allowed to trade stocks with almost no limitations. There isn’t a limit on lawmakers trading stocks based on classified information nor is there oversight regarding the trades that lawmakers are allowed to make based on other information they are privy to as part of their job. This is in glaring contrast to the strict insider trading laws that ban the same kind of behavior of everyone else in the county.
No congress can trade on insider information full stop
https://blogs.luc.edu/compliance/?p=4459
> Simply put, insider trading is illegal. But, if you are a member of Congress, there is a loophole. Members of Congress and their families are allowed to trade stocks with almost no limitations. There isn’t a limit on lawmakers trading stocks based on classified information nor is there oversight regarding the trades that lawmakers are allowed to make based on other information they are privy to as part of their job. This is in glaring contrast to the strict insider trading laws that ban the same kind of behavior of everyone else in the county.
Did he put a lot of money into politics or did he stay away from it?
Not sure why this was downvoted. IQ almost certainly plays a large role. Why do these top quant firms so aggressively filter for IQ, like puzzles and test scores?
I’m doubting. Simons might be an exception given that he got a PhD in maths at age 23. He was always smart, and I think he was bound to excel in whatever field he chose.
But people don’t need be extremely smart to get wealthy. Just executing well on a simple idea can make one extremely wealthy, and there’s considerable luck involved. There’s also the need to have persuasive skills, connections, charisma, and all that to convince people to follow their vision, aka Steve Jobs and Elon Musk.
But people don’t need be extremely smart to get wealthy. Just executing well on a simple idea can make one extremely wealthy, and there’s considerable luck involved. There’s also the need to have persuasive skills, connections, charisma, and all that to convince people to follow their vision, aka Steve Jobs and Elon Musk.
Both of the people you mention are/were fairly obviously of high intelligence. A conservative lower bound would be the top 5%.
As intelligent as Jim Simons? Almost certainly not.
As intelligent as Jim Simons? Almost certainly not.
It's like a snowball effect. If something does not 'take' no amount of IQ or connections will help.
Besides the conferences, there is the SCGP at Stony Brook, the Simons Center in Manhattan, whatever MSRI is called now, AMS-Simons travel grants, tons of money for the arXiv, the Magma license deal... and that's just the stuff that I've benefited from personally. I know there's more, Simons Collaboration grants and probably other things I've never heard of. He was very good to us all.
We've always joked that Phds in geometry-adjacent fields have to have one of the highest average incomes of any degree, probably at least $1 million a year. Simons making $3 billion, the rest of us making 90k apiece.