Will be interesting to see how this affects math research. He has pumped unthinkable amounts of money into the field. The only first-class flights I've taken in my life were to get to Simons-funded conferences at super fancy hotels. (I found these conferences a bit ridiculous, but the luxury treatment did ensure that they could get together a lot of the biggest names in the field in one place.)
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.
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.
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.
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.
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’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.
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'
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.
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.
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.
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 :)
"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
> 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 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.
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.
Another important one! I think they pump a lot of money into the MoMath as well. It's just hard to come up with every way the math world depends on Simons money.
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
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.
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.
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?
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.
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.
“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.”
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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, ...
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.
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.
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 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.
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.
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.
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.
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.
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.
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.
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.
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.
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
Yeah there's a famous but outdated book called A Practical Guide to Quantitative Finance Interviews by Xinfeng Zhou that gives you some idea of what questions they like to ask.
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.
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.
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?"
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.
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.
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.
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.
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.
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.
> 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.
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.
> 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.
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.
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.
Last month an amazing biographical podcast came out describing his personal journey to starting rentech, and the factors that make the business so competitive.
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.
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).
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.
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.
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. :'(
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.
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.
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.
> 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.
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.
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.
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 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.
"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.
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.
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.
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.
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.
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 observing@simonsfoundation.org.
Information on memorial services and other events honoring Jim’s life and legacy will be posted on the Simons Foundation website.
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.
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.
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.
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.