The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution

I listened to this new Gregory Zuckerman book and it was as I thought it would be, relatively low quality prose and mixed narrative with some history on how RenTech made and didn't make money since 1977, perhaps more history and details than one would expect given NDAs. As anybody who is in the weeds knows, RenTech success at scale is driven by very good implementation of equities statistical arbitrage supplemented with bank assisted dramatic leverage and tax strategies (you won't get much details on it from the book) which came to RenTech the same way it came to all others (DE shaw, Thorp, PDT, and 100 of spin-offs) via MS original source. Given a cast of disgruntled former employees and RenTech PR appear to be the primary source for the book and author inability to dig dipper, the narrative is very uneven, but the book does appear to reflect the messy story of RenTech in the early days and greed driven gyrations in the latter days. I would not recommend paper version of the book as it is thin on valuable content, but audio version is good enough to listen while commuting if you want to get some reaffirmation of how the trading world really works. I am afraid separating the wheat from the chaff might be a bit complicated for somebody who is not financial trading professional so I would not recommend this book to them.

A completely engrossing book you will find hard to put down. Jim Simons used applied math to create the greatest money-making machine in Wall Street history. But this is really a rich human story of how Simons built a team of brilliant and fascinating personalities.SOME INTERESTING POINTS:• Simons is a true mathematician. He loves the elegance of math, the way theorems reveal truth, bringing order to chaos. When he was thirty-seven, he was awarded the top prize in geometry for his academic work.• In 1964 Simons left his teaching job at Harvard to break codes for the Institute for Defense Analyses. His experience there was KEY to his later success. First, his approach to investing would be like that for code-breaking: apply math to find hidden structure in chaotic data. Second, he was impressed with the way the Institute hired people. It didn’t look to fill specific skills; it looked for the smartest and most creative people it could find.• After code-breaking, Simons was hired to lead the struggling SUNY Stony Brook math department. In that job, he learned how to recruit and motivate superstar math professors. By the time he left academia to take on the challenge of investing, he had built a powerhouse department. And some of that talent would later join him and earn millions.• Simons didn’t allow researchers to work in silos. There was one combined trading system, and everyone could see the code. Simons thought it was vital for scientists to interact, debate, and share ideas.• Renaissance Technologies was not an overnight success. It took Simons ten years to put together the team and process that would go on to make so much money.• By 2002 the Medallion Fund was so successful that Simons, concerned that performance would fall if the fund grew too big, raised investor fees to 44% of profits.You don’t need to be a mathematician to read this book. It is simply a good tale. There are no formulas. And along with the story about Jim Simons, Zuckerman tells the history of the radical change in the investment world: “MBAs once scoffed at the thought of relying on a scientific and systematic approach to investing, confident they could hire coders if they were ever needed. Today, coders say the same thing about MBAs, if they think about them at all.”

Its a cute story. It's by no means a definitive work on finance (as the authors friend suggests), I dont even think its a definitive work on RenTech. It became very obvious early on that the author got nothing out of his subjects so he weaved what sparse details he got with an abundance of prose. And you've got to be kidding my with the corn cliff hangers at the end of every chapter - 'but it would be worse then anyone feared...' - give me a break

A story about the man, not his methods. Not interested in a guy who supports Trump and the Mercers.

James Simons is a great manager: time and again when he recognized problems were at hand in his business, he acted to fix them constructively. He did this by recruiting arguably the strongest mathematical physics team on planet earth, knowing that you can teach finance but you cannot teach smart. The talent is world class: I heard Elwyn Berlekamp lecture on algebraic coding theory once, John Kelly (Kelly criterion for investing) who recruited my colleague Ed Arthurs to Bell Labs, David Donohue lecture on mathematical statistics, I am a colleague from Bell Labs with Peter Weinberger. Simons himself is a world class mathematician in pure mathematics but was open to working with all who could contribute based on intelligence, which led to recruiting Mercer and Brown from IBM in speech research. The ability to recognize problems, deal with them constructively, and move on, is the trait of a great manager who also contributed technically but most of all provided the funding and verbal encouragement time and again to find patterns in data that others missed, and then exploit it. The decision to always hire to raise the average IQ is not the norm, but for Simons it was. Renaissance is an example of the following adage: first they ignore you, then they scoff at what you are doing, then they claim they did it first. Renaissance was an idea whose time had come.

+ delves deep into Jim Simons professional and personal struggles+ fascinating tale about how quants think and build their models, emphasizing how difficult is to make money on the markets- more about Rentech than Simons- don’t expect to find trade secrets here

This isn’t a brilliant book on the face of it, but then again it is written about a famously tight lipped subject on which virtually nothing is known. So you have to credit the author a lot for bringing this subject to fruition even if it is somewhat lacking in detail.The key insight of the book is that Jim Simons and his colleagues realised that markets were not efficient, in contrast to the mainstream view of market efficiency, and that the inefficiency could be exploited for profit. Lots of it. And they were right.So this book is well worth reading. It’s well written and it skips along at a relatively decent pace. I don’t think it’s a five star book on my scale, and I doubt it will quite make the top step in the FT Business Book of the Year, but it is still a book you probably do want to read sometime soon if you work in and around trading financial markets.

Excellent well written book. Fascinating description of the building of a quant finance house and the many years of trial and error it took. Based on many interviews with the people directly involved makes it credible with well drawn character portraits. Interesting history of investing / speculating from Babylonian times to present included. It also is a primer for how the various software models are written. Shows inadvertently why billionaires should not be able to use their fabulous wealth to influence politics; being driven by maths and a desire to make money are poor qualifications for considering the greater good. Their years of remarkable profits makes crystal clear the limitations of traditional economic theory based on efficient markets, rational man and random walks.

An unremarkable analysis yet through American project management and resolve a mathematical solution reminds of this Latin motto.What I liked - Useful biographies of key team players that advanced the success of Jim Simons's Medallion hedge fund and the Renaissance technologies founder. Good index enabling links and cross reference of hedge fund events - Global Alpha Cliff Asness and the Quant quake (refer Greg Smith's why I left Goldman Sachs). Capital and VC involvement described from David Sussman's refusal to GAM's agreement.What is missing - Old style hold strategy with long event lines was robbable by the quant funds whose techniques was to reduce the event time lines and increase the number of trades. Profitability per trade would diminish but the task was to increase exponentially the number of trades in managed pattern moves - page 223 Medallion was trading up to 300,000 contracts a day. Simplification graphics would help to better grasp essential features of machine managed control like event line time reduction: page 101 halts long term trades, page 113 reduction from 1 week and 1/2 to 1 day and 1/2, page 190 trades average hold 2 days, page 271 hold time 1 or 2 days increases to 1 or 2 weeks. Sorting the Sharpe ratio and evidencing its shape change through a year eventually pushes the ratio out to 7.5 needs illuminating.The future - investor nervousness. Retrenchment trades and fake chaff news leading to daily 100 point volatility swings in the Dow, Nikkei, Dax, are good for quant funds but negative for investor confidence and micro second entry and exit decisions - IPO management becomes precarious and issues are pulled.

The title of the book is, I feel, something of a misnomer. Simons is one of many characters in this story, prominent but hardly central. I enjoyed it but learned little. Personalities clash, even very intelligent, very educated ones. Trust mathematics but always be prepared to step back and review the big picture. Perhaps the ultimate lesson is that very rich people have way too much influence on the political scene.

Jim Simons and Ray Dalio are both the legend of the HF industry though they took disparate approaches. This book provided fascinating insights into how Jim Simons made a career change in his 40s and how Rentech became the most successful quant HF in the history. However, you might be disappointed if you are looking for the detail of the Stat Arb strategies used by Rentech. I really enjoy the read and also bought several copies for my friends and colleagues. Well done, Greg!