Jim Simons Quotes

We’re right 50.75 percent of the time . . . but we’re 100 percent right 50.75 percent of the time,” Mercer told a friend. “You can make billions that way.

Simons shared a few life lessons with the school’s audience: “Work with the smartest people you can, hopefully smarter than you . . . be persistent, don’t give up easily. Be guided by beauty . . . it can be the way a company runs, or the way an experiment comes out, or the way a theorem comes out, but there’s a sense of beauty when something is working well, almost an aesthetic to it.

Scientists and mathematicians are trained to dig below the surface of the chaotic, natural world to search for unexpected simplicity, structure, and even beauty.

Simons and his team are among the most secretive traders Wall Street has encountered, loath to drop even a hint of how they’d conquered financial markets, lest a competitor seize on any clue. Employees avoid media appearances and steer clear of industry conferences and most public gatherings. Simons once quoted Benjamin, the donkey in Animal Farm , to explain his attitude: “‘God gave me a tail to keep off the flies. But I’d rather have had no tail and no flies.’ That’s kind of the way I feel about publicity.

1991,

Sixth

Any time you hear financial experts talking about how the market went up because of such and such—remember it’s all nonsense,” Brown later would say.

Instead of beating up the bad teachers, we focus on celebrating the good ones,

Truth in life is broad and nuanced; you can make all kinds of arguments, such as whether a president or person is fantastic or awful,” he says. “That’s why I love math problems—they have clear answers.

mass times its acceleration—is a differential equation because acceleration is a second derivative with respect to time. Equations involving derivatives with respect to time and space are examples of partial differential equations and can be used to describe elasticity, heat, and sound, among other things.

A king...we need a king...Such delicious eyebrows...He's only got to ask...Hahahaha He's only got to wish...and the crown is hisssss.

If you trade a lot, you only need to be right 51 percent of the time,” Berlekamp argued to a colleague. “We need a smaller edge on each trade.

CHAPTER EIGHT

Our job is to survive,” Simons said. “If we’re wrong, we can always add [positions] later.” Brown seemed shocked by what he was hearing.

Scientists and mathematicians need to interact, debate, and share ideas to generate ideal results.

Their goal remained the same: scrutinize historic price information to discover sequences that might repeat, under the assumption that investors will exhibit similar behavior in the future.

The strategies were often based on the idea that prices tend to revert after an initial move higher or lower. Laufer would buy futures contracts if they opened at unusually low prices compared with their previous closing price, and sell if prices began the day much higher than their previous close. Simons made his own improvements to the evolving system, while insisting that the team work together and share credit.

The options also were a way of shifting enormous risk from Renaissance to the banks. Because the lenders technically owned the underlying securities in the basket-options transactions, the most Medallion could lose in the event of a sudden collapse was the premium it had paid for the options and the collateral held by the banks. That amounted to several hundred million dollars. By contrast, the banks faced billions of dollars of potential losses if Medallion were to experience deep troubles. In the words of a banker involved in the lending arrangement, the options allowed Medallion to “ring-fence” its stock portfolios, protecting other parts of the firm, including Laufer’s still-thriving futures trading, and ensuring Renaissance’s survival in the event something unforeseen took place. One staffer was so shocked by the terms of the financing that he shifted most of his life savings into Medallion, realizing the most he could lose was about 20 percent of his money.

When the Axcom team started testing the approach, they quickly began to see improved results. The firm began incorporating higher dimensional kernel regression approaches, which seemed to work best for trending models, or those predicting how long certain investments would keep moving in a trend.

For all the unique data, computer firepower, special talent, and trading and risk-management expertise Renaissance has gathered, the firm only profits on barely more than 50 percent of its trades, a sign of how challenging it is to try to beat the market—and how foolish it is for most investors to try.

Monemetrics would invest a bit of money for Simons, testing strategies in a variety of markets. If the tactics looked profitable, Simons would place the same trades in Limroy, which was much bigger and would invest for outsiders as well as for Simons. Baum would share in the 25 percent cut the firm claimed from all its trading profits.

The truly perfect pangram would contain all the letters of the alphabet in the right order, but the only thing that achieves that is the alphabet. There are phrases that use fewer characters, but they are not as catchy. And this is not for want of trying. Here are two of the shortest: 'Quick wafting zephyrs vex bold Jim.' 'Sphinx of black quartz judge my vow.

Elsewhere, statisticians were using similar approaches—called kernel methods—to analyze patterns in data sets. Back on Long Island, Henry Laufer was working on similar machine-learning tactics in his own research and was set to share it with Simons and others. Carmona wasn’t aware of this work. He was simply proposing using sophisticated algorithms to give Ax and Straus the framework to identify patterns in current prices that seemed similar to those in the past.

One day, Carmona had an idea. Axcom had been employing various approaches to using their pricing data to trade, including relying on breakout signals. They also used simple linear regressions, a basic forecasting tool relied upon by many investors that analyzes the relationships between two sets of data or variables under the assumption those relationships will remain linear. Plot crude-oil prices on the x-axis and the price of gasoline on the y-axis, place a straight regression line through the points on the graph, extend that line, and you usually can do a pretty good job predicting prices at the pump for a given level of oil price.

It’s important to remember that market participants have always tended to pull back and do less trading during market crises, suggesting that any reluctance by quants to trade isn’t so very different from past approaches. If anything, markets have become more placid as quant investors have assumed dominant positions. Humans are prone to fear, greed, and outright panic, all of which tend to sow volatility in financial markets. Machines could make markets more stable, if they elbow out individuals governed by biases and emotions. And computer-driven decision-making in other fields, such as the airline industry, has generally led to fewer mistakes.

His early research wasn’t especially original. Ax identified slight upward trends in a number of investments and tested if their average price over the previous ten, fifteen, twenty, or fifty days was predictive of future moves. It was similar to the work of other traders, often called trenders, who examine moving averages and jump on market trends, riding them until they peter out. Ax’s predictive models had potential, but they were quite crude. The trove of data Simons and others had collected proved of little use, mostly because it was riddled with errors and faulty prices. Also, Ax’s trading system wasn’t in any way automated—his trades were made by phone, twice a day, in the morning and at the end of the trading day.

Memenuhi permintaan seorang kawanku yang menulis surat dari Timur, aku mengunjungi si tua Simon Wheeler yang cerewet, dan menanyakan mengenai kawan dari kawanku, Leonidas W. Smiley, seperti permintaannya padaku, dan aku di sini untuk melampirkan hasilnya. Aku memiliki kecurigaan samar kalau Leonidas W. Smiley hanyalah sebuah mitos belaka dan kawanku tak pernah mengenal orang itu; dan dia beranggapan jika aku menanyakannya pada si tua Wheeler, hal itu akan mengingatkannya pada Jim Smiley yang terkenal, lantas dia akan berupaya keras dan membuatku bosan setengah mati dengan kenangannya tentang orang itu, yang menjengkelkan, berlarut-larut dan sangat menjemukan serta tak ada gunanya bagiku. Jika itu tujuannya maka dia berhasil.

It was in postwar Paris that Mandelbrot began this quest in earnest. Uncle Szolem urged him to attend the École Normale Supérieure, France’s most rarefied institution of higher learning, where Mandelbrot had earned entry at the age of twenty (one of only twenty Frenchmen to do so). But the aridly abstract style of mathematics practiced there was uncongenial to him. At the time, the École Normale—dite normale, prétendue supérieure, says the wag—was dominated in mathematics by a semisecret cabal called Bourbaki. (The name Bourbaki was jocularly taken from a hapless nineteenth-century French general who once tried to shoot himself in the head but missed.) Its leader was André Weil, one of the supreme mathematicians of the twentieth century (and the brother of Simone Weil). The aim of Bourbaki was to purify mathematics, to rebuild it on perfectly logical foundations untainted by physical or geometric intuition. Mandelbrot found the Bourbaki cult, and Weil in particular, “positively repellent.” The Bourbakistes seemed to cut off mathematics from natural science, to make it into a sort of logical theology. They regarded geometry, so integral to Mandelbrot’s Keplerian dream, as a dead branch of mathematics, fit for children at best.

Jim Simons, head of the hedge fund Renaissance Technologies, has compounded money at 66% annually since 1988. No one comes close to this record. As we just saw, Buffett has compounded at roughly 22% annually, a third as much. Simons’ net worth, as I write, is $21 billion. He is—and I know how ridiculous this sounds given the numbers we’re dealing with—75% less rich than Buffett. Why the difference, if Simons is such a better investor? Because Simons did not find his investment stride until he was 50 years old. He’s had less than half as many years to compound as Buffett. If James Simons had earned his 66% annual returns for the 70-year span Buffett has built his wealth he would be worth—please hold your breath—sixty-three quintillion nine hundred quadrillion seven hundred eighty-one trillion seven hundred eighty billion seven hundred forty-eight million one hundred sixty thousand dollars.

fucking

When a young employee gasped at his blue language, Simons flashed a grin. “I know—that is an impressive rate!” A few times a week, Marilyn came by to visit, usually with their baby, Nicholas. Other times, Barbara checked in on her ex-husband. Other employees’ spouses and children also wandered around the office. Each afternoon, the team met for tea in the library, where Simons, Baum, and others discussed the latest news and debated the direction of the economy. Simons also hosted staffers on his yacht, The Lord Jim, docked in nearby Port Jefferson. Most days, Simons sat in his office, wearing jeans and a golf shirt, staring at his computer screen, developing new trades—reading the news and predicting where markets were going, like most everyone else. When he was especially engrossed in thought, Simons would hold a cigarette in one hand and chew on his cheek. Baum, in a smaller, nearby office, trading his own account, favored raggedy sweaters, wrinkled trousers, and worn Hush Puppies shoes. To compensate for his worsening eyesight, he hunched close to his computer, trying to ignore the smoke wafting through the office from Simons’s cigarettes. Their traditional trading approach was going so well that, when the boutique next door closed, Simons rented the space and punched through the adjoining wall. The new space was filled with offices for new hires, including an economist and others who provided expert intelligence and made their own trades, helping to boost returns. At the same time, Simons was developing a new passion: backing promising technology companies, including an electronic dictionary company called Franklin Electronic Publishers, which developed the first hand-held computer. In 1982, Simons changed Monemetrics’ name to Renaissance Technologies Corporation, reflecting his developing interest in these upstart companies. Simons came to see himself as a venture capitalist as much as a trader. He spent much of the week working in an office in New York City, where he interacted with his hedge fund’s investors while also dealing with his tech companies. Simons also took time to care for his children, one of whom needed extra attention. Paul, Simons’s second child with Barbara, had been born with a rare hereditary condition called ectodermal dysplasia. Paul’s skin, hair, and sweat glands didn’t develop properly, he was short for his age, and his teeth were few and misshapen. To cope with the resulting insecurities, Paul asked his parents to buy him stylish and popular clothing in the hopes of fitting in with his grade-school peers. Paul’s challenges weighed on Simons, who sometimes drove Paul to Trenton, New Jersey, where a pediatric dentist made cosmetic improvements to Paul’s teeth. Later, a New York dentist fitted Paul with a complete set of implants, improving his self-esteem. Baum was fine with Simons working from the New York office, dealing with his outside investments, and tending to family matters. Baum didn’t need much help. He was making so much money trading various currencies using intuition and instinct that pursuing a systematic, “quantitative” style of trading seemed a waste of

Three years later, at the age of sixty-nine,

I like kids,

Jim Parsons: I don’t even think he’d go all the way down the stairs. He’d lean into the stairs, from that fourth-floor platform, and scream down. I guess we could call that tradition or superstition, or we could call it psychotic. I think that’s between Simon and his good doctors. I can’t speak to that. [Laughs] But in all seriousness, one of the things I think Simon and I connect so deeply about is a certain lifelong struggle with anxiety. Simon Helberg: I generally run in a high octane of nervousness in terms of performing and functioning, so I was always very, very nervous about so much on the show. It got better in time, but I really do idle at an excessive level of anxiety and nerves.

Baum

members, explaining

a smaller, nearby office, trading his own account, favored raggedy sweaters, wrinkled trousers, and worn Hush Puppies shoes. To compensate for his worsening eyesight, he hunched close to his computer, trying to ignore the smoke wafting through the office from Simons’s cigarettes. Their traditional trading approach was going so well that, when the boutique next door closed, Simons rented the space and punched through the adjoining wall. The new space was filled with offices for new hires, including an economist and others who provided expert intelligence and made their own trades, helping to boost returns. At the same time, Simons was developing a new passion: backing promising technology companies, including an electronic dictionary company called Franklin Electronic Publishers, which developed the first hand-held computer.

When a young employee gasped at his blue language, Simons flashed a grin. “I know—that is an impressive rate!” A few times a week, Marilyn came by to visit, usually with their baby, Nicholas. Other times, Barbara checked in on her ex-husband. Other employees’ spouses and children also wandered around the office. Each afternoon, the team met for tea in the library, where Simons, Baum, and others discussed the latest news and debated the direction of the economy. Simons also hosted staffers on his yacht, The Lord Jim, docked in nearby Port Jefferson. Most days, Simons sat in his office, wearing jeans and a golf shirt, staring at his computer screen, developing new trades—reading the news and predicting where markets were going, like most everyone else. When he was especially engrossed in thought, Simons would hold a cigarette in one hand and chew on his cheek. Baum, in a smaller, nearby office, trading his own account, favored raggedy sweaters, wrinkled trousers, and worn Hush Puppies shoes. To compensate for his worsening eyesight, he hunched close to his computer, trying to ignore the smoke wafting through the office from Simons’s cigarettes. Their traditional trading approach was going so well that, when the boutique next door closed, Simons rented the space and punched through the adjoining wall. The new space was filled with offices for new hires, including an economist and others who provided expert intelligence and made their own trades, helping to boost returns. At the same time, Simons was developing a new passion: backing promising technology companies, including an electronic dictionary company called Franklin Electronic Publishers, which developed the first hand-held computer.

I could have been killed!

It was almost as if Ax invited me there to attract women,

Jim,” she said once, after an evening spent among the men who were called the intellectual leaders of the country, “Dr. Simon Pritchett is a phony—a mean, scared old phony.” “Now, really,” he answered, “do you think you’re qualified to pass judgment on philosophers?” “I’m qualified to pass judgment on con men. I’ve seen enough of them to know one when I see him.” “Now this is why I say that you’ll never outgrow your background. If you had, you would have learned to appreciate Dr. Pritchett’s philosophy.” “What philosophy?” “If you don’t understand it, I can’t explain.” She would not let him end the conversation on that favorite formula of his. “Jim,” she said, “he’s a phony, he and Balph Eubank and that whole gang of theirs—and I think you’ve been taken in by them.” Instead of the anger she expected, she saw a brief flash of amusement in the lift of his eyelids. “That’s what you think,” he answered.

What do you want of me?—was the question that kept beating in her mind as a clue. What do you want of me?—she kept crying soundlessly, at dinner tables, in drawing rooms, on sleepless nights—crying it to Jim and those who seemed to share his secret, to Balph Eubank, to Dr. Simon Pritchett—what do you want of me? She did not ask it aloud; she knew that they would not answer. What do you want of me?—she asked, feeling as if she were running, but no way were open to escape. What do you want of me?—she asked, looking at the whole long torture of her marriage that had not lasted the full span of one year.

anomalous patterns in historic pricing data; make sure the anomalies were statistically significant, consistent over time, and nonrandom; and see if the identified pricing behavior could be explained in a reasonable way.

TiVo finally shipped in 1999. Mike Ramsay and Jim Barton, two former colleagues who had founded TiVo, were certain the TV-VIEWING public was ready. And they may have been if only TiVo knew how to talk to them.

His [brother in law Jim Hampson] appointment to the Episcopal parish in Wenham, near Gordon College brought them in close touch with leading evangelical faculty members in their pews and church leadership, including Elizabeth Elliot and Addison Leitch. They were instrumental in drawing Jim and and Sarah into the cutting edge of evangelical intellectual leadership, with friendships with Tom Howard and J.I. Packer. My ongoing relationship with Jim Packer, FitzSimons Allison and many other brilliant Anglican evangelicals would not have happened without Jim Hampson. His early influence on me in my transition from modern to classic Christian teaching was immense. While I was trying to demythologize Scripture, he was taking its plain meaning seriously. His strong preaching led him to become one of the founding sponsors and supporters of Trinity School of Ministry in Abridge, Pennsylvania...

and as they stepped out, all eyes turned to the window to admire the view of the cathedral after which the residence had been named. Neal and Ava trod springy new carpeting down a long corridor until they came to Simon Foster’s flat. Loud music boomed from within; Brandon Flowers singing about Mr Brightside. Ava began to sing and from the sound of it, at least three male voices inside the room were doing the same. The sound

to [David] Simon and his partner, Ed Burns, The Wire was explicitly a piece of social activism. Among its targets, large and small, were the War on Drugs, the educational policy No Child Left Behind, and the outsize influence of money in America's political sytem, of statistics in its police departments, and of Pulitzer Prizes at its newspapers. The big fish, though, was nothing less than a capitalist system that Burns and Simon had begun to see as fundamentally doome. (If Simon was a dyed-in-the-wool lefly, Burns practically qualified as Zapatista; by ex-cop standards, he might as well have been Trotsky himself.) In chronicling the modern American city, Simon said, they had one mantra, adapted from, of all sources, sports radio personality Jim Rome: "Have a fucking take. Try not to suck." Neither Burns nor Simon would ever seem entirely comfortable acknowledging the degree that The Wire succeeded on another level: as beautifully constructed, suspenseful, heartfelt, reasonant entertainment. [...] "It's our job to be entertaining. I understand I must make you care about my characters. That's the fundamental engine of drama," Simon said dismissively. "It's the engine. But it's not the purpose". Told that The Wire had trascended the factual bounds that, for all its good intentions, had shackled The Corner, he seemed to deliberately misunderstand the compliment: "I have too much regard for that which is true to ever call it journalism." The questioner, of course, had meant the opposite: that The Wire was too good to call mere journalism. As late as 2012, he would complain in a New York Times interview that fans were still talking about their favorite characters rather than concentrating on the show's political message.

They spent three more long days in the whitened mountain ash trees on the whitened bay. Tatiana baked pies in Nellie’s big kitchen. Alexander read all the papers and magazines from stem to stern and talked post-war politics to Tatiana and Jimmy, and even to indifferent Nellie. In Nellie’s potato fields, Alexander built snowmen for Anthony. After the pies were in the oven, Tatiana came out of the house and saw six snowmen arrayed like soldiers from big to little. She tutted, rolled her eyes and dragged Anthony away to fall down and make angels in the snow instead. They made thirty of them, all in a row, arrayed like soldiers. On the third night of winter, Anthony was in their bed restfully asleep, and they were wide awake. Alexander was rubbing her bare buttocks under her gown. The only window in their room was blizzarded over. She assumed the blue moon was shining beyond. His hands were becoming very insistent. Alexander moved one of the blankets onto the floor, silently; moved her onto the blanket, silently; laid her flat onto her stomach, silently, and made love to her in stealth like they were doughboys on the ground, crawling to the frontline, his belly to her back, keeping her in a straight line, completely covering her tiny frame with his body, clasping her wrists above her head with one hand. As he confined her, he was kissing her shoulders, and the back of her neck, and her jawline, and when she turned her face to him, he kissed her lips, his free hand roaming over her legs and ribs while he moved deep and slow! amazing enough by itself, but even more amazingly he turned her to him to finish, still restraining her arms above her head, and even made a brief noise not just a raw exhale at the feverish end...and then they lay still, under the blankets, and Tatiana started to cry underneath him, and he said shh, shh, come on, but didn’t instantly move off her, like usual. “I’m so afraid,” she whispered. “Of what?” “Of everything. Of you.” He said nothing. She said, “So you want to get the heck out of here?” “Oh, God. I thought you’d never ask.” “Where do you think you’re going?” Jimmy asked when he saw them packing up the next morning. “We’re leaving,” Alexander replied. “Well, you know what they say,” Jim said. “Man proposes and God disposes. The bridge over Deer Isle is iced over. Hasn’t been plowed in weeks and won’t be. Nowhere to go until the snow melts.” “And when do you think that might be?” “April,” Jimmy said, and both he and Nellie laughed. Jimmy hugged her with his one good arm and Nellie, gazing brightly at him, didn’t look as if she cared that he had just the one. Tatiana and Alexander glanced at each other. April! He said to Jim, “You know what, we’ll take our chances.” Tatiana started to speak up, started to say, “Maybe they’re right—” and Alexander fixed her with such a stare that she instantly shut up, ashamed of questioning him in front of other people, and hurried on with the packing. They said goodbye to a regretful Jimmy and Nellie, said goodbye to Stonington and took their Nomad Deluxe across Deer Isle onto the mainland. In this one instant, man disposed. The bridge had been kept clear by the snow crews on Deer Isle. Because if the bridge was iced over, no one could get any produce shipments to the people in Stonington. “What a country,” said Alexander, as he drove out onto the mainland and south.

Jim,” she said once, after an evening spent among the men who were called the intellectual leaders of the country, “Dr. Simon Pritchett is a phony—a mean, scared old phony.” “Now, really,” he answered, “do you think you’re qualified to pass judgment on philosophers?” “I’m qualified to pass judgment on con men. I’ve seen enough of them to know one when I see him.” “Now this is why I say that you’ll never outgrow your background. If you had, you would have learned to appreciate Dr. Pritchett’s philosophy.” “What philosophy?” “If you don’t understand it, I can’t explain.

SIMON

It’s one thing to have good ideas, it’s another to recognize when others do.

Berlekamp also argued that buying and selling infrequently magnifies the consequences of each move. Mess up a couple times, and your portfolio could be doomed. Make a lot of trades, however, and each individual move is less important, reducing a portfolio’s overall risk.

Simons’s team appeared to have discovered something of a holy grail in investing: enormous returns from a diversified portfolio generating relatively little volatility and correlation to the overall market. In the past, a few others had developed investment vehicles with similar characteristics. They usually had puny portfolios, however. No one had achieved what Simons and his team had—a portfolio as big as $5 billion delivering this kind of astonishing performance.

As the Acoma Pueblo poet Simon Ortiz has said, “There are no truths, only stories.

It sounded like someone had got to him,” Cooper says. “Even a smart guy can get the details right but the big picture wrong.

By 1997, Medallion’s staffers had settled on a three-step process to discover statistically significant moneymaking strategies, or what they called their trading signals. Identify anomalous patterns in historic pricing data; make sure the anomalies were statistically significant, consistent over time, and nonrandom; and see if the identified pricing behavior could be explained in a reasonable way.

They ultimately settled on a mix of sensible signals, surprising trades with strong statistical results, and a few bizarre signals so reliable they couldn’t be ignored. “We ask, ‘Does this correspond to some aspect of behavior that seems reasonable?’” Simons explained a few years later.

As his central air system, set to maintain an internal temperature of sixty-eight degrees, drew on generator power and sent a final burst of air through the house, whipping the shattered home into a proper inferno, Carrey began to barter with the cosmos for salvation. He'd repent, he swore. He'd renounce all earthly delights. If it was fun, he'd avoid it. He'd change his name to Francis, or Simon Peter. And if the cosmos wanted to throw in some special power or skill, like healing the sick or talking to birds, something to distinguish him from others in this new field of endeavor (and also maybe a small group of followers, nothing huge, but dedicated followers), well, all that would be appreciated. Unnecessary, but appreciated. "Save me," he prayed, cowering. "Please.

I know the price of success: dedication, hard work, and an unremitting devotion to the things you want to see happen. —Frank Lloyd Wright

Ax, and Straus didn’t believe the market was truly a “random walk,” or entirely unpredictable, as some academics and others argued.

Ken Blanchard, of Tom Friedman and of Seth Godin, The Starfish and the Spider by Ori Brafman and Rod Beckstrom, First, Break All the Rules by Marcus Buckingham, Good to Great by Jim Collins, The 7 Habits of Highly Effective People by Stephen Covey, The 4-Hour Workweek by Tim Ferriss, Never Eat Alone by Keith Ferrazzi,

offered me new perspectives: the works of Ken Blanchard, of Tom Friedman and of Seth Godin, The Starfish and the Spider by Ori Brafman and Rod Beckstrom, First, Break All the Rules by Marcus Buckingham, Good to Great by Jim Collins, The 7 Habits of Highly Effective People by Stephen Covey, The 4-Hour Workweek by Tim Ferriss, Never Eat Alone by Keith Ferrazzi, E-Myth by Michael Gerber, The Tipping Point and Outliers by Malcolm Gladwell, Chaos by James Gleick, Emotional Intelligence by Daniel Goleman, Made to Stick by Chip and Dan Heath, Who Moved My Cheese? by Spencer Johnson, M.D., The Monk and the Riddle by Randy Komisar, The Five Dysfunctions of a Team by Patrick Lencioni, Freakonomics by Steven D. Levitt and Stephen J. Dubner, FISH! By Stephen Lundin, Harry Paul, John Christensen and Ken Blanchard, The Naked Brain by Richard Restack, Authentic Happiness by Martin Seligman, The Wisdom of Crowds by James Surowiecki, The Black Swan by Nicholas Taleb, American Mania by Peter Whybrow, M.D., and the single most important book everyone should read, the book that teaches us that we cannot control the circumstances around us, all we can control is our attitude—Man’s Search for Meaning by Viktor Frankl. I

Yes, the Great Migration of which so many black Chicagoans were a part was in many ways emancipatory in its vision and redemptive in its relief from Jim Crow’s worst horrors. But it was also, in its brute realities, something in which people’s freedom dreams were frequently, punishingly bridled.

His early research wasn’t especially original. Ax identified slight upward trends in a number of investments and tested if their average price over the previous ten, fifteen, twenty, or fifty days was predictive of future moves. It was similar to the work of other traders, often called trenders, who examine moving averages and jump on market trends, riding them until they peter out. Ax’s predictive models had potential, but they were quite crude.

It didn’t take Baum long to develop an algorithm directing Monemetrics to buy currencies if they moved a certain level below their recent trend line and sell if they veered too far above it. It was a simple piece of

existing mantra at Renaissance: Never place too much trust in trading models. Yes, the firm’s system seemed to work, but all formulas are fallible. This conclusion reinforced the fund’s approach to managing risk. If a strategy wasn’t working, or when market volatility surged, Renaissance’s system tended to automatically reduce positions and risk. For example, Medallion cut its futures trading by 25 percent in the fall of 1998. By contrast, when LTCM’s strategies floundered, the firm often grew their size, rather than pull back.

The lunch went well, and the foundation appeared close to writing a big check to RIEF. To cap things off, a thick, iced vanilla cake was placed in the middle of the table. Everyone eyed the dessert, preparing for a taste. Just then, Simons walked in, setting the room ablaze. “Jim, can we take a picture?” asked one of the health organization’s investment professionals. As the small talk got under way, Simons began making odd motions with his right hand. The foundation executives had no clue what was happening, but nervous RIEF staffers did. When Simons was desperate for a smoke, he scrabbled at his left breast pocket, where he kept his Merits. There was nothing in there, though, so Simons called his assistant on an intercom system, asking her to bring him a cigarette. “Do you mind if I smoke?” Simons asked his guests. Before they knew it, Simons was lighting up. Soon, fumes were choking the room. The Robert Wood Johnson representatives—still dedicated to building a culture of health—were stunned. Simons didn’t seem to notice or care. After some awkward chitchat, he looked to put out his cigarette, now down to a burning butt, but he couldn’t locate an ashtray. Now the RIEF staffers were sweating—Simons was known to ash pretty much anywhere he pleased in the office, even on the desks of underlings and in their coffee mugs. Simons was in Renaissance’s swankiest conference room, though, and he couldn’t find an appropriate receptacle. Finally, Simons spotted the frosted cake. He stood up, reached across the table, and buried his cigarette deep in the icing. As the cake sizzled, Simons walked out, the mouths of his guests agape. The Renaissance salesmen were crestfallen, convinced their lucrative sale had been squandered. The foundation’s executives recovered their poise quickly, however, eagerly signing a big check. It was going to take more than choking on cigarette smoke and a ruined vanilla cake to keep them from the new fund.

The problem is that so many investors focus so much on these types of news that nearly all of their results cluster very near their average.

The Magic of Thinking Big by David J. Schwartz Man’s Search for Meaning by Viktor Frankl Understanding Understanding by Richard Saul Wurman The Tapping Solution for Manifesting Your Greatest Self by Nick Ortner Start With Why by Simon Sinek The 7 Habits of Highly Effective People by Stephen R. Covey

Watching the traders buy big blocks of shares, Bamberger observed that prices often moved higher, as might be expected. Prices headed lower when Morgan Stanley’s traders sold blocks of shares. Each time, the trading activity altered the gap, or spread, between the stock in question and the other company in the pair, even when there was no news in the market. An order to sell a chunk of Coke shares, for instance, might send that stock down a percentage point or even two, even as Pepsi barely moved. Once the effect of their Coke stock selling wore off, the spread between the shares reverted to the norm,

Soros and other people influence politics as much as you do, but they aren’t vilified like you are.

SIMON &

seemingly detached from human emotion.

The fund’s computers told the banks which stocks to place in the basket and how they should be traded. Brown himself helped create the code to make it all happen. All day, Medallion’s computers sent automated instructions to the banks, sometimes an order a minute or even a second. After a year or so, Medallion exercised its options, claiming whatever returns the shares generated, less some related costs.

When I heard MIT didn’t have a football team, I knew it was the school for me,” he says.

Добре е да знам, че още мога да разпаля огъня, ако се наложи.

Jim Simons, head of the hedge fund Renaissance Technologies, has compounded money at 66% annually since 1988. No one comes close to this record. As we just saw, Buffett has compounded at roughly 22% annually, a third as much.