
Renaissance’s Medallion hiked investment caps 50 percent after Trump’s election - champagnepapi
https://www.bloomberg.com/news/articles/2017-08-16/renaissance-s-medallion-made-stunning-shift-after-trump-election
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rayuela
It's interesting that the Medallion fund generated an 11.6 percent return
during the first six months of this year, lower than the gains of 21 percent
and 18 percent during the first halves of 2016 and 2015, respectively. It's
also only marginally better than what a passive investment in the SP500 during
that same period would have returned.

~~~
aphextron
That makes sense. The point of investing is not to beat the market in any
given year, but to minimize losses. The market in general is doing fantastic
right now, so it's hard to beat even for Rennaisance. But when the downturn
comes you can bet they'll be ahead of the game.

~~~
pedrocr
What makes you confident in this fund in particular vs the rest given that in
aggregate they can't beat the market? The history of past returns I assume?

~~~
jacobkranz
I don't have a source on this but from what I read they returned ~80% in '09.

From the research I've done on them, they generally make tons of very small
bets on assets they think are mispriced. Generally speaking, when volatility
goes dramatically up is when more assets are mispriced thus leading to larger
gains for them. However, we've seen historically low volatility so it makes
sense that they're not returning as much right now.

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whack
The article from a year ago, summarizing Millenium's history and culture, was
a fascinating read as well. It certainly sounds like a place packed with
geniuses, but I can't help but notice that it also sounds eerily similar to
LTCM.

[https://www.bloomberg.com/news/articles/2016-11-21/how-
renai...](https://www.bloomberg.com/news/articles/2016-11-21/how-renaissance-
s-medallion-fund-became-finance-s-blackest-box)

[https://en.wikipedia.org/wiki/When_Genius_Failed](https://en.wikipedia.org/wiki/When_Genius_Failed)

~~~
maxxxxx
Considering how well-connected they probably are I bet they can augment their
genius with some insider knowledge from time to time.

Some years ago I knew some Wall Street guys and they all pretty much said that
the successful traders have information that's not available to the rest. Some
get greedy and get caught but the others are just a little more subtle.

~~~
jraines
Impossible to know as an outsider, but it's interesting to me that Simons
tried pretty hard to isolate Renaissance from Wall Street & other hedge funds.
He hired people out of academia, saddled them with an extremely onerous non-
compete agreement, and was leery of Wall St. traders because he figured if
they left their current fund, they'd leave him, too, once they learned the
secret sauce. And he put the headquarters in Long Island, away from the loci
of Greenwich and Wall St.

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dogruck
RenTech is unparalleled and Medallion has proven itself for decades.

This interview with Jim Simons is fantastic:
[https://youtu.be/QNznD9hMEh0](https://youtu.be/QNznD9hMEh0)

~~~
jcmoscon
Very interesting guy! They should show this to every high school in the USA.
Teacher: "See this, that's why you need to learn math!"

~~~
dogruck
Jim founded an organization, Math for America, to help:
[http://www.mathforamerica.org/about/board/james-
simons](http://www.mathforamerica.org/about/board/james-simons)

(This story appears to have nothing to do with Trump, despite the headline.)

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chollida1
It's amazing how a fund's focus switches from when it makes money collecting
management fees from other people's money to when it only invests the partners
capital:)

There aren't too many funds out there who actively give back capital on a
quarterly basis to investors to ensure they aren't over capacity, and the ones
you do hear about are usually shutting down a fund or kicking out the outside
money all together.

> The firm told staff that they would be allowed to increase their Medallion
> stakes by at least 50 percent. The catch: they had just weeks to come up
> with the money.

This seems a bit punitive to the "rank and file" employees as if RenTech is
like any other fund then...

\- most of the executives probably have orders of magnitude more money in the
fund already so a flat 50% increase benefits them alot more.

\- its much easier for someone will 100's of millions in existing assets to
get a loan in a week than someone with single digit millions or less.

As a side note, the link in the article was posted before but its still a
terrific article if you want a look at RenTech

[https://www.bloomberg.com/news/articles/2016-11-21/how-
renai...](https://www.bloomberg.com/news/articles/2016-11-21/how-renaissance-
s-medallion-fund-became-finance-s-blackest-box)

Just for fun RenTech just filed their 13F here are positions they sold or
reduced:

AMD US (Advanced Micro Devices Inc), CVS US (CVS Health Corp), PCLN US
(Priceline Group Inc/The), TEVA IT (Teva Pharmaceutical Industries Ltd), TSLA
US (Tesla Inc), AET US (Aetna Inc), CMCSA US (Comcast Corp), FB US (Facebook
Inc), MRK US (Merck & Co Inc), PX US (Praxair Inc),

and positions they added:

ADSK US (Autodesk Inc), AIG US (American International Group Inc), MCK US
(McKesson Corp), PFE US (Pfizer Inc), WDAY US (Workday Inc), BMY US (Bristol-
Myers Squibb Co), CL US (Colgate-Palmolive Co), DPZ US (Domino's Pizza Inc),
EA US (Electronic Arts Inc), NVDA US (NVIDIA Corp)

Top holdings: NetEase Inc.-ADR: up 456,300 shares, to 2.73 million valued at
$819.5 million

Johnson & Johnson: down 970,500, to 6.13 million valued at $811.2 million

Bristol-Myers: up 7.02 million, to 13.5 million valued at $751.6 million

Gilead Sciences Inc.: up 2.7 million, to 10.4 million valued at $736.7 million

Colgate: up 2.9 million, to 9.75 million valued at $723 million

The hedge fund manager's disclosed holdings rose 9.5 percent in value in the
second quarter to $78.3 billion. The Standard & Poor's 500 index advanced 2.6
percent.

~~~
champagnepapi
Interesting. I wonder what (if anything) the 13F means for a company like
RenTech. Who knows how long they hold positions for (minute or less, or days
and beyond), perhaps this could have just been a snapshot of an instant, or
no? I ask this, since humans apparently do not trade there, they are not like
a more traditional fund like Appaloosa, where humans decide when to get in/out
of a position.

~~~
jandrewrogers
RenTech is not a fast-twitch fund, they generally hold their positions for a
significant period of time.

~~~
whatok
Even if you were to subscribe to that notion, it's still on a quarter lag.

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peterkshultz
Does anyone understand how too much money in the fund can lead to diminishing
returns?

~~~
Thetawaves
Eventually you go from playing the market to BEING the market.

