Famous Traders: Jim Simons
James Harris Simons (Born 25th April 1938) is an American mathematician, philanthropist, one of the greatest investors and a billionaire hedge fund manager. Jim as he is referred to, is known as the ‘Quant King’ as he is the exceptional founder of one of the most prosperous Quant Funds in the world — Renaissance Technologies ( Rentech ). It is a hedge fund located in Setauket-East Setauket, New York which Jim founded in 1982 at the age of 44. He is also known for his studies on pattern recognition which is the undertaking of recognising patterns by way of using a machine that specialises in learning algorithm.
He was born in Brookline, Massachusetts to an American Jewish family and found at a young age he had a passion for mathematics. His first job at the age of 14 found him working in a garden supply shop as a stock boy, but unfortunately due to his incapability to do the job he was then demoted to floor sweeper. Jim was extremely intelligent and ambitious. His real dream was to become a mathematician at the Massachusetts Institute of Technology (MIT) and in 1955 he was offered a place at MIT, where mathematics became his specialised subject. After graduating he went on to study for his doctorate in mathematics at the University of California at Berkeley. In 1961 at the age of 23, after completing just one year he was awarded his doctorate. He continued to work on mathematical thesis’s, infact the Chern-Simon form, played a major part in topological quantum field theory. During his career in mathematics he became very successful, winning a variety of awards enabling him to be introduced into the U.S. National Academy of Sciences.
The Institute for Defense Analyses (IDA) recruited him in 1964, where he undertook a major position as a code breaker for the U.S. during the Vietnam War. He stayed here for four years then taught mathematics at MIT and Harvard University. Then he accepted the position as chairman of the mathematics department at Stony Brook University. He assisted them in expanding their mathematics and physics programmes and was also head hunted by companies like IBM for his consulting work.
Jim actually didn’t discover his love for finance until 1978, when he founded the hedge fund Monemetrics, this was the forerunner to the highly victorious Renaissance Technologies. It wasn’t until 1982 that he founded Renaissance Technologies. He became the CEO and chairman, only retiring from the position in 2010, but has continued as a non-executive chairman. His quant fund Renaissance Technologies and their prestigious Medallion Fund (which was only available to Renaissance’s owners and staff ) were recognised as quantitative investors. They used mathematical models and algorithms to achieve investment profits from market inefficiencies. They were managing around $80 billion and continued in offering great returns. Due to these long-term investment returns Jim became known as ‘the greatest investor on Wall Street’.
Jim achieved further accolades, in 2006 The Financial Times named him as ‘the world’s smartest billionaire’. In 2011 he was listed in the 50 Most Influential people in Bloomberg Markets Magazine. Then in 2016 The International Astronomical Union in great respect of his contributions to mathematics and philanthropy named an asteroid after him. As of 2021 he was estimated by Forbes to have a net worth at $23.5 billion which makes him the 23rd richest person in the United States. A book was even published in 2019 about his investing techniques and about the man himself, ‘The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution’ by Gregory Zuckerman.
He is also known for his charitable work, The Simons Foundation was co-founded in 1994 with his second wife, Marilyn. It is a charitable company that funds projects which are related to education and health in aid of scientific research. They also incorporated The Simons Foundation Autism Research Initiative (SFARI) to help enhance the diagnosis and treatment of autism spectrum disorders. Jim has donated around $2.7 billion to help assist the welfare of others less fortunate and humanitarian causes.
To end on a quote by Jim Simons:
‘We have three criteria: If it’s publicly traded, liquid and amenable to modelling, we trade it.’
