Jim Simons

Jim Simons is a hedge fund manager and a mathematician. He is a quantitative investor and the founder of the hedge fund Renaissance Technologies. His hedge fund specializes in systematic trading using quantitative models derived from mathematical and statistical analyses. Mr. Simons primary models were on pattern recognition. He  contributed to the development of string theory by providing a theoretical framework to combine geometry and topology with quantum field theory. Jim Simons was a mathematics professor from 1968 to 1978, and chair of the mathematics department at Stony Brook University. He founded his hedge fund in 1982. His net worth is currently estimated at $21.5 billion.

“Renaissance’s flagship Medallion fund, which is run mostly for fund employees, “Is famed for one of the best records in investing history, returning more than 35 percent annualized over a 20-year span”. From 1994 through mid-2014 it averaged a 71.8% annual return.Renaissance offers two portfolios to outside investors—Renaissance Institutional Equities Fund (RIEF) and Renaissance Institutional Diversified Alpha (RIDA).” via Wikipedia 

Here are some of his top trading quotes that distill some of his wisdom:

“We search through historical data looking for anomalous patterns that we would not expect to occur at random.” – Jim Simons 

“Patterns of price movement are not random. However, they’re close enough to random so that getting some excess, some edge out of it, is not easy and not so obvious-thank God. God probably doesn’t care. Thank whoever.” – Jim Simons 

“Past performance is the best predictor of success.” – Jim Simons

“The system is always leaking, and we keep having to add water to keep it ahead of the game.” – Jim Simons

“I wasn’t the fastest guy in the world. I wouldn’t have done well in an Olympiad or a math contest. But I like to ponder. And pondering things, just sort of thinking about it and thinking about it, turns out to be a pretty good approach.’ – Jim Simons

“One can predict the course of a comet more easily than one can predict the course of Citigroup’s stock. The attractiveness, of course, is that you can make more money successfully predicting a stock than you can a comet.” – Jim Simons

It’s supply and demand. If gold is discovered, then it gets harder to make money mining gold because everyone’s competing with you.” – Jim Simons 

“We have three criteria: If it’s publicly traded, liquid and amenable to modeling, we trade it.” – Jim Simons 

There’s no such thing as the goose that lays the golden egg forever.” – Jim Simons

“In this business it’s easy to confuse luck with brains.” – Jim Simons

“The things we are doing will not go away. We may have bad years, we may have a terrible year sometimes. But the principles we’ve discovered are valid.” – Jim Simons

 “We don’t override the models.” – Jim Simons

 

 

By Steve Burns

After a lifelong fascination with financial markets, Steve began investing in 1993 and trading his accounts in 1995. It was love at first trade. After more than 30 successful years in the markets, Steve now dedicates his time to helping traders improve their psychology and profitability. New Trader U offers an extensive blog resource with more than 4,000 original articles, online courses, and best-selling books covering various topics.