Summary: On May 10, 2024, Jim Simons, the "King of Quantitude", died in New York at the age of 86.
Simmons has one of the best investment results in quantitative investing, with a staggering 66.07% return on the medallion fund he manages, and only 1989 Net Return was negative from 1988 to mid-2018, with all other years achieving positive returns, including the 2008 financial crisis.
Simmons' life is full of twists and turns, and it is also extremely mysterious, with little complete public information. Fortunately, a few years ago, I translated Simmons's "quasi-autobiography" with my good friend An Yun: The Man Who Conquered the Market. After Simmons left this world, this is the only book in which we can see his whole life. I said at the time: this book is an "epitaph" of Simmons. When Simmons leaves this world one day, in what way will he be remembered by the world? Judging from the content of this book, perhaps more of a mathematician and philanthropist.
Simmons' enigmatic life not only allows us to see a god-like net worth curve, but also sees all kinds of things about him as an ordinary person. Simmons made a lot of money, but eventually gave back most of his money back to the community in the form of charity.
Investing is the monetization of knowledge
If a person has a deep understanding, then investing is the easiest way to monetize that knowledge. We see that people who have been able to make money in the capital market for a long time are more or less able to surpass others in cognition. On the opposite side of this sentence, you can't make money beyond your knowledge. Many people make money because of luck and eventually lose it because of their ability.
From Simmons to the rest of Renaissance's partners and staff, they were a group of top and brightest people. Almost all of these people are top students in various universities, and their knowledge of mathematics is far beyond the average person, but most of them have extremely low emotional intelligence (Simmons himself is the highest emotional intelligence in this group), and they are not good at doing their jobs well in a society that requires contact with people.
This group of people put cognition on the model of the Renaissance Medallion, constantly optimized the model, and finally realized the realization of cognition. Investing, more or less a game that requires cognition. This group of extremely smart, but very poor people, found their value in the stock market. With quantitative investing, you hardly need to deal with other people, you don't need to have a high level of emotional intelligence, you just need to keep beating your competitors, although this is also extremely difficult to do.
Investing is the most addictive game
Famous writer Mark Murphy. Twain once said that investing is the most addictive game, and if you have played "stock speculation", it is difficult to be stimulated by other games. We have interviewed many fund managers and often ask what would you do if you were not a fund manager? Most fund managers believe that there is hardly any other job that brings more pleasure than investing. Yes, investing can make you addicted, and every day in investing is the most timely feedback, which can make a person "sink deeper and deeper".
In this book, we see that Simmons, or other partners or employees, almost all of them were mathematics teachers in major prestigious universities before, and basically did not touch investment, and they were either Wall Street elites in college or finance. When Simmons initially created the hedge fund, he gave up his tenured university professorship and was looked down upon and understood by many. Those professors in the mathematics department think that what is the point of investing, or that it is fun to study mathematics.
But neither Simmons himself, nor the mathematicians who eventually joined the Renaissance, once they touched the matter of investment, they couldn't extricate themselves. For example, Simmons' earliest partner was Lenny Baum, who was the top codebreaker expert when Simmons was cracking codes. Before Simmons approached him, he knew little about financial investments, and all the family's money was handed over to his wife to take care of. But once he came into contact with investing, he was completely "addicted". Yes, when a poor math professor can see tens of millions of dollars in his account in a few years (and this was in the early 80s), you certainly can't sleep peacefully.
Such examples are replicated in almost every Renaissance employee. They go from Geek, who has no interest in money at all, to the weakness of human nature. Eventually, we will see that human nature drives everyone's decision-making. In investment and life, we must respect human nature, and do not fight against human nature.
Simmons' ability: to discover talent, to organize talent
After reading this book, I know that Simmons's ability is not to make a model, but the ability to discover talents and manage talents, in fact, many Renaissance partners have relied on Simmons to achieve their lives. Simmons was always able to spot people who were talented, but underrated. Even before joining the Renaissance, their lives were a mess.
For example, Messer, who later became the co-CEO of Renaissance, worked in IBM's speech recognition team before joining Renaissance. Before joining the Renaissance, his mother died in a car accident, his father died of an illness 20 days later, his third daughter was going to college, and Messer lived in a modest bungalow. After that, he will become Trump's largest personal funder in his presidential campaign.
Simmons' initial partner, Strauss, earned only $20,000 a year at the age of 35, unable to support his wife and one-year-old child. Simmons' other partner, Jamex Ax, became a good math professor at a young age, but he didn't have much money. Years later, he would go to court with Simmons over equity and eventually sell all his shares.
Simmons has a knack for digging into "smart people in the doldrums." Many of the smart people Simmons excavated weren't even young. Some people are still doing nothing when they are in their forties and fifties. They have even experienced various family changes. Ultimately, it was Simmons who made these people shine.
Simmons' other talent is managing this group of Geeks (Frankenstein). Most of the employees in the Renaissance have some character flaws that are difficult to manage. For example, Maess, who later became the co-CEO, did not like to talk to people at all, he liked to be alone, and called the place where he lived "Owl House". Within the Renaissance, there were all sorts of strange things going on. And Simmons is to manage this gang well.
Compared to these people, Simmons is the one with the highest emotional intelligence. Everyone has the impression that Simmons seems to be very old-fashioned, like a math professor. In fact, Simmons has a great sense of humor, is also wild, and can keep his cool when the big crisis comes. It's also interesting to note that Simmons wants to leave his investments to machines and make money while he sleeps, without relying on his personal "intuition." But it was Simmons' "intuition" that led the Renaissance into a wider realm.
Simmons is also characterized by a pursuit of excellence, he really believes that Renaissance can get an 80% yield, and he really buys a stake in Renaissance from his colleagues at a very high price, he is really a Think Big person. It also allowed him to achieve something that surpassed others in the Renaissance.
Only on the day of leaving the market can reconciliation be made
This book is about different lives, about human nature, about investment. Simmons has experienced various betrayals throughout his life. How many friends ended up turning against him, and many left the Renaissance with resentment. When it came time to invest, there were a lot of internal squabbles in the Renaissance. Perhaps it is difficult for ordinary people like us to understand. You've all made tens of millions of dollars, what else is there to fight for?!
I interviewed a fund manager a while ago, and he said, "Investing is about knowing the world, and investing is about knowing yourself." "Indeed, the process of knowing oneself is painful and requires absolute honesty with oneself. Only by leaving this market can we reconcile, reconcile with the outside world, and reconcile with ourselves.
Many people leave the Renaissance and live an ordinary life, but perhaps it is happier than it was during the Renaissance ... The same goes for Simmons, who became more liberal after Shin Shin left Invest. Of course, Simmons' life was also full of tragedies, from premature marriage and divorce to the loss of two children...
I believe that anyone who has made an investment can understand that only by letting go can they reconcile...
In the end, mathematics remains under philosophy.
It doesn't matter when the career starts, it's the process that matters
I have always had a point of view: a person's career (or career) is very similar to a sports star, a singer, or an actor, and the prime period of the career is limited. Some movie stars, who have been making movies for 20 years, may only really leave behind the films of those years. Some sports stars, the real brilliance is the goals of those years, and even those championships. There are very few people like Ronaldo, Messi, Warren Buffett, Tom Brady, Hayao Miyazaki, and Nolan who can maintain the golden period of their careers for a long time!
But the golden period of a person's career is not only 30 to 40 years old, it doesn't matter when you really start a journey, what matters is the process (not the result). It is the process of a person who devotes himself wholeheartedly to doing something.
Simmons started investing around the age of 40, and many of Renaissance's partners joined at the age of 35, 40, or even 50. They were not young when they joined the Renaissance, but they burned together for 10 years, 20 years, and started a legend. Simmons, 40, is far inferior to Edward, who became famous very early. Thorpe (I also did an email interview with Thorpe and recommended his book). But today, Simmons' accomplishments are far higher than Thorpe's, and higher than the vast majority of quantitative investment pioneers.
When you do something that you love and are good at, it doesn't matter when you start. There are 10 or 20 years of dedication to doing something in life, and this process is the most wonderful...
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