Let's meet Jim Simons.
And no, he's not a Wall Street guy.
– Graduated with a Bachelor's in Mathematics from MIT
– Earned a PhD at Berkeley at 23 years old
– Rode a motorcycle from Boston to Bogota between degrees because it was too boring
– Conducted groundbreaking research in geometry, contributing to quantum field theory and string theory
– Hired by the NSA to decode Soviet ciphers during the Cold War
- Teaching at MIT and Harvard
- Fired for publicly opposing the Vietnam War.
Then he reviewed market data over decades and concluded something that no one had proven.
That the market can be modeled mathematically. Totally. There’s a system.
Unlike every other scholar saying the same thing and going back to write papers about it, Simons actually built it.
He founded Renaissance Technologies. Later, he established the Medallion Fund in 1988.
Instead of hiring traders or analysts, he brought in mathematicians, physicists, statisticians, and computer scientists. People who had never worked in finance before. That was the key.
What happened next was the most extraordinary performance record in financial market history.
- Average annual return of 66% before fees.
- 39% after fees.
- Over $100 billion in trading profits throughout the fund's life.
- Still posted positive returns even in 2008, one of the worst years in modern market history.
Eventually, he completely closed Medallion to outside investors. The fund operates almost exclusively for current and former employees.
No one has ever replicated this model. Nobody fully understands what's inside it. The models are a black box that hasn’t been reverse-engineered in over 35 years.
He ended up with a net worth of $31.4 billion and donated billions more to science and math education.
The IRS once charged him over $6.8 billion in taxes that he deferred by reclassifying income from stock trading as long-term capital gains. In the end, he paid up.
He smoked two packs a day throughout his adult life and lived to 86.
Never has pure intellectual ability been translated into clear financial profit more than Jim Simons.
Folks in finance ain't the ones who cracked the market code.
A geometrician who decoded for the government managed to do it.
By the way, I'm about to reveal my next capital investment plan.
Many wish they'd followed my lead sooner.