The New Yorker Profiles Jim Simons

The New Yorker profiles math-hedge-quant-gabillionare Jim Simons. He’s very, very, very smart.

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

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

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

Posted by on December 11th, 2017 at 8:48 pm


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