James Simons - Mathematics, Common Sense, and Good Luck: My Life and Careers

Mathematics, Common Sense, and Good Luck: My Life and Careers
12/09/2010 4:15 PM
James Harris Simons, Founder and CEO of Renaissance Technologies
James Harris Simons is an American hedge fund manager, mathematician, and philanthropist. In 1982, Simons founded Renaissance Technologies, a private investment firm based in New York with over $15 billion under management. Simons retired at the end of 2009, as CEO, of what is one of the world's most successful hedge funds. Simons' net worth is estimated to be $10.6 billion.
Don't expect to glean any market tips or trading secrets from James Simons, who steadfastly refuses to disclose the method behind his remarkable record in investing. Instead, listen to this mathematician, hedge fund manager and philanthropist sum up a remarkably varied and rich career, and offer some "guiding principles" distilled along the way.

[@SomeInfo-ib3wz]

The man has gotten "old" but you can tell the way he talks he is still sharp, a true legend.

[@1erik1]

11:07 he actually comes on

[@annsophiefans1472]

Thanks, erik, you da real MVP

[@rpatel6461]

Comes up, you mean?

[@moa3810]

Thank You!

[@MrSupernova111]

Bro!

[@hughmcmanus2134]

Thanks!!

[@katlegomotaung3955]

Rest well, Sir Jim

[@taylorferguson5334]

THE QUANT KING, Renaissance technology's home office is in the town in which i grew up. James Simons is a true inspiration.

[@ck88777]

Quant GOD**

[@nathanwang4610]

Eyyy seaport deli

[@vikrantc.358]

I thought he was just another professor. But later I came to know that he's worth 21 billion dollars! He's got an avg return of 39%!!

[@mzar62458]

60٪+ before fees!

[@poulwinther]

So why were you here in the first place?

[@jeffreyschnitman2484]

He uses high level math to trade. Buffet uses metrics to value companies ,no computers, Just accounting.

[@sonicmaths8285]

@@jeffreyschnitman2484 so, what’s your point

[@edwardbenes5015]

Do something new - do not run with the pack . It is fun to work with people - beauty is a guide - do not give up - Good Luck.

[@ItsRainingSteak]

Look at this man... What the hell am I doing with my life..

[@lizgichora6472]

Be guided by beauty and don't give up; quite inspiring words, thank you very much.

[@gardenbounty4498]

Epic speech. the Legend tells his story. One of the classics.

[@ThenewmanX1]

I HAVE SUCH PREDICTION MODEL - I don't have the other parts of the "system". I know what James Simons means about "model predicting" prices in financial markets and anomalies. Everything he said about it in this speech/q&a is consistent with what I know about it and how I created it. In his words, you don't need "aliens" to conceptualize and program this model. What is needed is knowledge and willingness to apply it in order to model the market. I totally understand Jim's argument. I studied physics in Poland in the 1990s (because there were no prerequisites) and at the end the Polish Academy of Sciences offered me to do my PhD in the USA and France, but I've refused, then I worked for 24 years building sophisticated air pollution monitoring systems. This gave me experience in programming and processing large amounts of data. I can say that the speech/q&a is very interesting - it's the first time I've seen it and I emphasize once again that I perfectly understand not only the statements themselves, but also the manner of JS's statements about the future price prediction model. This speech/q&a finally convinced me that I was right too. Thanks to Jim Simons and the authors of the interview.

[@RUL87]

Simons has also great done great things academically. He seemed to only publish papers either in Annals of Mathematics or Proceedings of the National Academic Society in his math career.

[@flaviulus]

Lol James was expecting a handshake and the dean just walked to his seat

[@GodsNode]

5 mins in he's like, "Fuck, I want a cigarette."

[@imranq9241]

What a cool guy! Real insights not ambiguous answers

[@yoloyieldqueen]

This video changed my life❤️ Thank you🙏

[@subashfranklin]

This video watches like a good movie.

[@MrJupton1]

Damn straight those models worked for him... As Greg Zuckerman pointed out.... Since 1988 the fund grew at an average of 66% each year.

[@abhishekmazumdar2072]

I have this feeling. Everyone who has understood their field of work be it Maths, Science, Art or anything..everyone one of them, have a handsome proportion of humour in their personalities..

[@gracerongli3929]

Humor is a form of intelligence

[@thechillingvillan]

Simons missed a step answering the question about quants. David X Li used his knowledge of the Gaussian probability equation to structure new securities. Quants was at the core of the crash. Wired has a great article is you're interested.

[@maitiaru]

29:00 multiplied investors money by twelve, did I hear it right?

[@jonathankr]

Yes. In 2 years

[@mhchitsaz]

Fantastic talk

[@perarduaadastra873]

I thought Trading would be slow moving and boring, and that one needed to be a fluent maths savant. I was surprised to find pattern trading highly visual and visceral, with ADHD giving me hyper focus. Time flies by and I’m highly successful, and thus consistent and safe. I don’t use indicators, or expert advisers, simply technical analysis with an eye on fundamental analysis by way of major news events. I hope I may enjoy learning Python, otherwise I won’t be able to learn to write my own EA, and I’ve never even used an EA, but I have not yet begun upon this journey. When AI becomes sentient, what effect will that have upon Fx trading and our lives?

[@carltoncotter2614]

I heard the student who asked the first question got his MBA at Chicago but now works at Home Depot?

[@amgineco]

What a BUNCH of jealous idiots! He made HIS money it is HIS money he can spend it on ANYTHING he wants.. If I had his money you people wouldn't even KNOW if I gave to charity or NOT.. I don't even care what you think.. A VERY intelligent, talented man indeed! MIT was my backup college also!

[@MrRobocop12]

yeah he was named the intelligent billionaire on the planet of 2013..... Popularized algo trading programs and innovated it..... Also worked for the NSA and FBI for cyber security..... Idk where these asses thinking he never earned his money because his intelligence is off the chats

[@MrRobocop12]

anna ciavarella "warren buffet is better than him'first of all warren buffet comes from inflation,berkshire hathaway, and buying companies. That is a way of venture capital and ownings tons of private equity. Jim simons runs complex mathematical equations to pick necessary bets in the system. 2 completely different way of making money

[@dogestranding5047]

+William zhang That's not an accurate description of Buffett's investing style.

[@michaelb.4362]

+anna ciavarella just shut the fuck up and do your job #kitchen

[@RLaughlin1234]

@@MrRobocop12 Buffett is highly concentrated, owning perhaps a few dozen companies/stocks, and having most of his money in a few companies/stocks. He also holds investments for long time periods, is driven by fundamentals, is basically long-only, and uses very little leverage. Simons was highly diversified, owned small amounts of thousands of companies, often held positions for very short time periods, mainly used automated HFT methods, was long/short, and was said to leverage up as much as $17-$18 to $1. Dollar for dollar, Buffett's annual 20% average returns over the last 50+ years are more impressive than Simons's ~ 70% annual returns over 30+ years when leverage is taken out of the equation. But Simons's ability to time the market and actually do better in bad markets is amazing in and of itself. Buffett was down over 30% in 2008, while Simons is said to have been up anywhere from 80% to 160% (depending upon the source).

[@mwangiisaacwangari8914]

A great talk

[@sabercruiser.7053]

HE RUNS HIS COMPANY LIKE STARTUP JUST LIKE STEVE JOBS DID RUN APPLE.

[@johnyf.q.8043]

RIP

[@KwesiOforiQuaah]

Sounds like he's the guy from Good Will Hunting.@12:00

[@daniels3980]

I know one thing they do NOT do at his fund, and that is Agile. No way!

[@sterlingseah]

Nice talk

[@wakawakaabby4779]

Omg! The first question 🤓

[@Pop-zb3wr]

Question at 54 minutes - end Keynesian economic deficit spending.

[@pranjalsaxena7944]

great video

[@jamesstmanhattan]

"I don't like to run with the pack."

[@apdohakim1650]

I want to discover his method jims look in stocks it is 2020 i wilk never stop unless i proof my target , i reasarched him he is bold to discover .

[@dfolegna]

Try machine learning using neural network without feedback. you get statistical pattern matching. check 2018 de prado book called recenr advances in machine learning in finance

[@MoMindSetCrypto]

Holy Maths And Spiritual Physics - colourful molecule, revitalist.

[@overcastfriday81]

46:50 Continuous example: incorporate AI .... Discrete example: include a trailing stop loss. Of course, any one analyst could be problem solving, and come up with either continuous or discrete rules! Even if Jim had a dedicated AI team, other analysts would be "allowed" to introduce continuous logic. Dumb question. At least Jim answered one of his questions...deal with abnormal distribution, as well as unknown unknowns, on a best-efforts basis.

[@overcastfriday81]

This supports my theory Simmons is a "Carroll Shelby of Quants". Meaning, he knows how to assemble and manage a great team, but never got too technical himself.

[@abdelparispari8820]

si quelqu'un peut traduire la vidéo, serais sympa...

[@anjaninator]

Thank u hamsterpoop 👍🏽

[@pesokpesok2716]

Одна из беспроигрышных стратегий заключалась в том, чтобы делать ставки на коррекции. Как оказалось, примерно 60% активов, стоимость которых внезапно и значительно возрастала или, наоборот, снижалась, хотя бы частично корректировались в цене. Прибыль от подобных коррекций позволила Medallion преуспеть, особенно на волатильных рынках, когда цены возрастали, прежде чем откатиться до определенного уровня.

[@chrismoneystl]

49:47 & 1:02:20 🔑

[@revooshnoj4078]

his mic is too low

[@tiffanyk4800]

he mention twice about inflations...does that mean housing bubble will be back?? between simon n buffet i think brka is better model...just goog company n hold for life! if i can ask question...how will it differ if i trade in interest rise modeling??

[@jonathankr]

It's not the housing bubble, it's the dollar bubble now. Fed will print and print. As long as gdp grows they dont care if the fed prints. Now trump wants interest rate at 0!

[@biznessman4597]

The 🐐

[@jerrynix5206]

Is that the Dean from Adam's University?

[@Elaba_]

I always loved models. The problem was they didn't love me. Moral of the story: if you love models you'll waste precious time. Unless you are a model too.

[@ClarityRyZze]

Wow who is that pixcel talking?

[@highway79]

Hft is created not for social, but for investment firms for profit.

[@kylefan8478]

why is this classified as comedy?

[@peterbradshaw8018]

The secret is privileged information.

[@ProofAndResults]

Jealous comments are always made by the Have-Nots- see below.....

[@aristolochene]

And mostly brainless morons who live pathetic lives and are miserable at their own existence so cry everywhere criticizing others.

[@GrooveFederation]

hey, i'm most certainly a have not but i fully respect this guy and wish him all the best in what he does, we're not all green eyed jealous monsters ya'know

[@biznessman4597]

52:30 Mbappe?? what are you doing here?

[@jamesram4869]

1:02:00 "one can make the cliche either way" ??!?

[@jonathankr]

The cliche i think he is referring to is "jack of all trades and a master of none..."

[@jamesram4869]

1:00:45 i dont understand using quant for everything, i mean what the hell is quant ? just a statistician/mathematician that works in finance, right? so ... just use it in every sentence then?

[@samchen_123]

Great

[@dbz1978]

I simply do not understand this issue: (at minute 50): "If you buy 100,000 shares, you can move the market, etc..." I just do not see the logic. If you buy 100,000 shares at the current price, then clearly someone is selling 100,000 shares at the current price, so why would the market move?

[@arturomartes8696]

Stocks are never sold at the exact price that a person says they'll buy for (bid) and the price they are being sold for (ask). When there is a larger group wanting a stock, the askers start to push up their ask price because they know there is more demand for it. Its basic supply and demand economics.

[@drkInxgud]

the price you see on screen is the price of the last trade. usually there is a bid price(highest price people are pposting to buy) and ask price( lowest price people are posting to sell). if the lst trade was at 25$ and the lowest offer price is 26$ and you buy a large volume at 26$ leaving the last trade at 26$ and consuming all the offers at 26$. now only offers at higher prices are left. thus people will have to offer higher. so thus the overall effect you are applying u upward pressure.

[@grundletrades2676]

The market moves because of value of sell and buy and liquid in the gdp and if you go into derivatives you learn the power of even more control of market.

[@aerialexplorer772]

Because the price has to be a little bit higher/lower in order to provide an incentive for the person who is selling you the 100,000 shares, to sell them now rather than at some other time.

[@RLaughlin1234]

Your scenario assumes that markets are always efficient, which of course they are not - particularly in the short term. Such a scenario where one or more people are always selling 100k shares and others are always there buying them and the price remains stable may work with very large companies that trade many millions of shares a day. But smaller companies and/or more thinly traded stocks will tend to have much greater reactions to such large orders being placed and filled. I often notice when I'm trading or watching smaller companies that it will usually take a while for a large order to be filled, and such a large order will cause the price to spike or sink as shares to buy or sell are filled for the large order. An order for 100k shares of a $100 billion company that trades tens of millions of shares a day won't likely disrupt supply/demand (and therefore price), but it will likely cause chaos for a small company worth a few million dollars that trades a few hundred thousand shares a day or less.

[@jackduffy1817]

Adverse Comments, So what, 15 billion $, Criminal activities. And that's all She wrote.

[@jamesram4869]

58:10 inflation is actually better for those who are active in the economy. the young , the less affluent . the people that are just stacking their money on top of each other hate inflation and want the gold standard because they can just relax and tell everyone what to do. on the other hand inflation CAN be bad for really poor people i think because they dont have the knowledge to gauge economic factors, which rich people do... so inflation is alright i think as long as it produces growth and job creation and in the case of the united states it sure does, because its one of the most trustworthy and stable countries politically and financially in the world, its better in many ways than europe.

[@james3876]

Inflation is good for debtors. Deflation is good for creditors. Deflation is great for clearing out useless and unwanted businesses from the economy. Inflation would be ok if it was given out to people as UBI. Instead the 1% get it first.

[@alanpictures9]

2023.07.11

[@mstrred76]

Lol....so do you suppose anyone at the college that rejected him regrets it these days? I wonder how much money he has given to MIT and Stonybrook lol

[@SzTz100]

It's amazing how little he knows, yet he's very rich and has a maths theory named after him. If I was to take a guess, I would say his company isn't doing any quant work whatsoever.

[@jeff-hh9mc]

Wow MIT via hamas is now worthless. Sad.

[@dogwithwigwamz.7320]

Maths is ridiculous - notwithstanding it`s use.

[@assdforst5891]

Dr Siddig Ahamed Mohamed Marketing professionals

[@wotanxiaozuo]

陈省身的学生？

[@CO8848_2]

So he now skims retail investors for money rather than doing something useful for humanity

[@juventusventuno9213]

money is a horrible drug for the ego

[@akituokko9461]

C O are you dumb?

[@reecem367]

skims?

[@brightideas5782]

Shiba INU crypto currency is the answer to becoming rich

[@peterbradshaw8018]

Real estate was and is overvalued. Real estate is no more of a sure thing than investing in a lemonade stand.

[@jamesram4869]

what

[@grundletrades2676]

Haha this guy. Penut brain

[@RLaughlin1234]

No such thing as a "sure thing" when it comes to any sort of investment.

[@qncsc]

strange. 55:00. in talking about macro, he has no idea. there is no growth. yes, sure, there is growth in areas, such as tech. but there is no large, broad growth in the US. he refers to the growth after ww2, without acknowledging "boomers" and their impact, subsequent to the war that fostered that growth. boomers are now retiring, which is massively deflationary (anti-growth). also, given that he devises "robots" (hft), one would think that he would have an understanding or have an ability to express skepticism re automation and intelligence and its impact on markets. he can't or he doesn't. ...

[@OperaCantata]

He has said numerous times that he is not an economist, therefore it's merely his lay opinion.

[@qncsc]

Opera the man is very, very sophisticated, obviously. in building models, i would think he would have developed competency by default.

[@OperaCantata]

***** Yes, but macro is a separate set of mathematical constructs that may not necessarily be related to financial mathematics.

[@qncsc]

Opera yes. absolutely. i get that. he even states that his "team" has no financial acumen (knowledge or otherwise). still...it is puzzling.

[@ghirardellichocolate201]

Michelle Obama, that's who. Tics matter...If we all stop everything in a row to treat it....$

[@dawoodwaris]

Another Carl Icahn.

[@habibbialikafe339]

nope. carl is a bad dude, this guy is not

[@Forever-kd7rc]

Super gay questions.... I would have been like, so, where's the time machine at??

[@Booogieman]

ha-ha-ha

[@marcelonovo4649]

41:50 "racism speech"

[@ananddaawar4741]

Italian taught by a Chinese...lol

[@marcelonovo4649]

Listen closely

[@yannitzili8961]

The Professor is a good gambler... but his understanding of ECONOMICS (not money peddling or gambling) is either on the side of the Feudal Lords (those that collect without producing) or or it is on the side of the ignorants... Either... or... I don't know what percentage he is giving back (as he should since he is collecting on behalf of society) through his "philanthropic" foundation... but it ain't much compared how much money he has hoarded off of the non-gambling economy. I don't know how philanthropic it is to collect and hoard loaves of bread and give back crumbs...

[@djellala]

hi yanni tzili this guy is a mathematician. I like this guy because if stays teaching math all his life, he would be poor as all the teachers in the usa. but the thing is he applied math on stock market and succeeded. and that is the real function of knowledge. he practiced what he taught. trading is the heart of any economy. thousands of years traders trade to make a profit. see our students we study 12 years physics math and science . what do we get? nothing why? it is all theory. for me i love to learn something that can help me in my life or my job. practical life is so different from theoretical life. i love people who practice what they preach. thats it. thanks

[@yannitzili8961]

Success in gambling can be assessed only once someone has finished gambling. This cannot be said about Simmons and Rennaissance Capital. My comment was not about gambling but rather on the impact of gambling to the real economy. Would you be ok for Nuclear Physicists (like Enrico Fermi did) to do open nuclear experiments in civilian areas? That's what hedge funds do. And they do it by lobbying Our government to keep pouring taxpayer (current and future) money into their gambling activities... This doesn't look like Free Market nor Capitalism. Prof. Simmons is a humble individual and a great person. I have met him in person. Mathematical Models in Finance are inherently faulty... The best gambler is the luckiest one, or the one with the most insider information.

[@djellala]

Yanni Tzili gambling means that you have one chance out of millions to win. that is gambling. businesses like trading is not gambling. no one is taking form the taxpayer with. wall street guys take the money that public give by gambling. because they dont know what they are doing. trading is a business either by means of math or any other means it is a lucrative business where risk is measured. yes true there are people who gamble but always lose money. but those who trade and make profits are not gambler. our tax payer money is given to search for alien in the space or taken overseas for other kind of operation that is our tax money is. hedge funds are trading and do have profits that s why they are successful. mutual fund managers make money also but are handicapped by government law. thats why when the market get hit. who takes the hit? its the public who put their money in those funds. wall street take the money because the government give them the opportunity to do so. it is like when you buy a stock and then it goes down and you hold it thinking that the stock will come back. well this is business. if you cant do this business do other businesses. good luck

[@OperaCantata]

There is a video on youtube in which he said he had zero understanding of economics.

[@yannitzili8961]

***** Nobody takes from the taxpayer???? Reaaaaallllyyyy.... have you heard of bailout... QE, etc,etc?

[@pesokpesok2716]

тупая статистика- Они искали потенциальную корреляцию между ценами на сырьевые товары. Если курс валюты падал три дня подряд, то каковы шансы, что то же самое произойдет и на четвертый день? Цена на золото опережает курс серебра? Помогут ли данные о стоимости пшеницы сделать прогноз относительно цен на золото и другие сырьевые товары? Команда обычно удерживала свои позиции 1-2 дня, а затем закрывала их.

[@pesokpesok2716]

дрянь, ни слова не сказал о главном- В основе этих стратегий часто лежала идея о том, что уровень цен, после первоначального скачка вверх или падения, нередко возвращается к прежним значениям. Лауфер покупал бы фьючерсные контракты, если на момент открытия торгов они продавались по необычно низким ценам по сравнению с их предыдущей ценой закрытия, и продавал, если в начале торговой сессии цены были намного выше, чем прежние цены закрытия.

[@pesokpesok2716]

дрянь ни о днях недели не сказал- Просматривая данные Штрауса, Лауфер обнаружил некоторые повторяющиеся закономерности, которые были связаны с днем недели. Например, поведение цен в понедельник часто совпадало с движением цен в пятницу, тогда как во вторник происходили реверсии (возвраты) к более ранним тенденциям. Лауфер также узнал, каким образом торговые операции предыдущего дня помогают зачастую предсказать поведение рынка на следующий день: то, что он назвал «24-часовой эффект». Компьютерная модель Medallion начинала покупать на исходе дня в пятницу, если, например, наблюдался явный восходящий тренд, а затем продавать в начале дня понедельника, используя то, что получило название эффекта выходного дня.

[@pesokpesok2716]

дрянь ни слова не сказал, что скопировал все с моргана , переманив сотрудника- Браун и Мерсер сохранили предсказательную модель, которую создал Фрей, используя свой опыт работы в Morgan Stanley. Она по-прежнему определяла выгодные сделки, позволяющие заработать серьезные деньги. Как правило, модель делала ставки на возврат цены акций к среднему значению после того, как происходили отклонения. На протяжении многих лет Renaissance будет дополнять эту базовую стратегию новыми функциями, однако свыше 10 лет это будут лишь второстепенные дополнения к торговой системе компании, в основе которой лежала стратегия торговли с возвратом к среднему.

[@pesokpesok2716]

дрянь н разу не сказал о новостях= Кроме того, они все равно почти ничего не могли поделать; Medallion совершал сделки примерно с 8000 различными акциями. Они не могли радикально изменить инвестиционный портфель за короткие сроки 👉 Команда улучшила свои предсказательные алгоритмы, применяя довольно простой количественный показатель - сколько раз компания упоминалась в новостной ленте - независимо от того, были ли упоминания позитивными, негативными или просто слухами

[@pesokpesok2716]

эта дрянь все скрывает- Саймонс подумал, что если они будут знать о происходящем в Европе раньше, чем их конкуренты, то это принесет свои плоды. Поэтому он нанял парижского студента из Стоуни-Брук, который читал малоизвестные финансовые новости на французском и переводил их, прежде чем эта информация попадет в руки конкурентов.