짐 사이먼스: 헤지펀드 성공의 수학자, 짐 사이먼스

### 짐 사이먼스의 색다른 여정: 수학자에서 헤지 펀드의 전설이 되기까지
* 📈 르네상스 테크놀로지스의 창립자인 짐 사이먼스는 **30년 동안 연평균 66%의 수익률**을 자랑하는 메달리온 헤지펀드로 **워런 버핏과 같은 전설적인 투자자들을 능가하는 성과**를 거뒀습니다.
* 💵 1988년 메달리온에 100달러를 투자한 것이 2018년에는 **3억 9,870만 달러로 놀랍게 성장**하여 이 펀드의 놀라운 성공을 보여주었습니다.
* 🧑 전통적인 투자자와 달리 사이먼스는 시장이 직관보다는 논리적 패턴에 따라 움직인다고 믿으며 **수학자와 과학자를 고용**했습니다.
* 🔍 그는 방대한 데이터 세트와 알고리즘을 활용하여 시장의 비효율성을 밝혀내고 **월스트리트 관행에 혁명을 일으킨 과학적 접근법**을 트레이딩에 도입했습니다.
* 💔 두 아들을 잃는 등 개인적인 비극을 겪었음에도 불구하고 Simons는 자신의 업무에 전념하여 **결국 르네상스 기관 주식 펀드를 출시**하여 투자 전략을 확장했습니다.
* 💻 그의 리더십 아래 르네상스는 시장 변화에 적응하여 **2008년 금융 위기 동안 82%라는 놀라운 수익**을 달성하며 트레이딩 시스템의 효율성을 입증했습니다.
* 🌍 270억 달러의 순자산을 보유한 사이먼스는 **스토니 브룩 대학교에 5억 달러를 기부**하고 자신의 재단을 통해 자폐증 연구 자금을 지원하는 등 상당한 자선 단체에 기부해 왔습니다.
* 📚 Simons의 여정은 투자에서 수학의 중요성을 강조하며, 다른 사람들이 미래의 성공을 위해 **Brilliant와 같은 플랫폼**을 통해 자신의 기술을 강화하도록 장려합니다.

짐 사이먼스는 데이터 기반 전략으로 투자에 혁명을 일으켜 수학과 알고리즘을 통해 독보적인 성공을 거두었습니다.

When it comes to investing, nobody holds a candle to Jim Simons: Not Warren Buffett, not Steven Cohen, not George Soros. Simons’ company Renaissance Technologies has a signature hedge fund called Medallion that has generated average annual returns of 66% for 30 years.

To put this another way, renowned economist Bradford Cornell points out that if you had invested $100 in Medallion in 1988, 30 years later, that would have turned into $398.7 million! What’s even more remarkable is that Simons hired people who didn’t know a thing about investing!

Is it true that you never hired people from the investment industry? Never (laughter). He hired mathematicians and scientists, just like himself. While traditional investors rely on their intuition to make trades: chatting with executives, analyzing earnings reports, gleaning insights from articles,

and considering geopolitical events, Simons walked a different path. As a trained mathematician, he believed markets moved in logical ways. So, he took a scientific approach to investing. Harnessing the power of vast data sets, computer models,

and algorithms to make decisions, inspiring a revolution that has swept Wall Street. This is the story of how a mathematician became the greatest trader who ever lived. Jim Simons is always restless. Building a storied career as a brilliant mathematician wasn’t enough.

Neither was teaching at MIT and Harvard. Neither was working as a Cold War code-breaker. He left Harvard to join an elite research organization that helped America’s most secretive intelligence agency, the NSA, decode Soviet messages during the Cold War.

But the work didn’t satisfy him. As his first wife Barbara recalled in Gregory Zuckerman’s book *The Man Who Solved the Market*, “Jim understood at an early age that money is power.” Growing up an only child in Brookline, Massachusetts, 

near Boston, his family doctor encouraged him to consider a career in medicine, remarking, "You're a bright Jewish boy, you should be a doctor." But when Simons shared his passion for mathematics, the doctor replied, "Look, you can't make any money doing that stuff."

Simons always wanted to be rich. When he was fired from his code-breaking job for protesting the Vietnam War, he wanted to join an investment bank. He had three young children to support, including a son who was born with a rare 

hereditary condition that affected the development of his skin, hair, sweat glands, and teeth. But, he opted to stay in academia for the time being. He was offered a job heading the math department at Stony Brook University on Long Island at the age of 30.

While it wasn’t as renowned then, here he was at the age of 30 with the opportunity to shape his own mathematics department. While at Stony Brook, he developed a mathematical theory that is foundational to the work of Microsoft and other companies to create special quantum computers designed 

to tackle challenges beyond the reach of current systems, including in AI. As his professional life took off, his personal life suffered. He and Barbara were young when they got married, he was 21, she was 18. They divorced, and she headed west to complete her PhD in computer science at UC Berkeley.

A few years later, a lingering urge
nudged Simons to leave academia and venture into the world of finance
by starting his own investment firm. His father thought he was making a huge
mistake by leaving a tenured position.

Mathematicians were shocked and
felt he was wasting his talent. But Simons was always unconventional
- evidenced by small gestures like not wearing socks because they
took too much time to put on. At the age of 40, he left his
position at Stony Brook to open

up a small office in a strip mall across
from a train station near the university. And so began Renaissance Technologies in 1978. Back then, it was called Monemetrics, a play on money + econometrics, the use of
statistics and math to study economic data.

Just as he once unscrambled enemy code, he
aimed to decode hidden patterns in the market. Simons remarked to Zuckerman in his book, “There’s
a pattern here; there has to be a pattern.” He didn’t care why the patterns
existed, just that they did.

Renaissance began by trading
currencies, commodities, and bonds but avoided stocks due to
their complexity; there are so many of them and each stock is influenced by
the unique circumstances of its company. Simons envisioned a trading system fully
guided by algorithms with no human input.

Let's say you want to know what the weather will be like tomorrow. You feed a computer
the information you have: temperatures, and humidity levels. The computer model
processes the information to predict tomorrow’s conditions. An algorithm then
advises you on whether to carry an umbrella.

Translated to the realm of quantitative
finance, the weather data becomes financial data such as stock prices and trading
volumes. The weather forecast becomes a market forecast. And the advice on what
to wear translates to a trading decision. On the other hand, a traditional investor might
try to predict the weather or the markets based

on subtle cues in their environment like how
much pain they’re in because of their arthritis. As much as Simons dreamt of this kind
of trading system - computers in the eighties weren’t sophisticated enough
to handle a fully automated system.

So, at the start, Renaissance relied on math models AND human intuition to
trade…which proved problematic. His code-breaking colleague Leonard Baum
who now worked at Renaissance liked to buy low but often clung to positions too long,
like in 1984, when he heavily invested in

U.S. bonds. But as the Reagan administration
began issuing so many bonds, prices plummeted. Simons recognized the limits of human judgment and
brought in James Ax, a friend from his PhD days at UC Berkeley whom he recruited to Stony Brook to
build more sophisticated math models for trading.

The team collected data from
as far back as the 1800s, feeding them into computers,
to uncover overlooked patterns. Simons told a colleague: “If we have enough
data, I know we can make predictions.” Simons and Ax launched a
new hedge fund, Medallion,

in honor of the prestigious
math awards they’d received. It would eventually become the most
successful hedge fund of all time. But at first, it struggled to make a profit. It didn’t help that Ax isolated himself
in his seaside estate in Malibu.

His preference for the West Coast led him to spearhead his new company Axcom, a separate entity yet closely connected to Renaissance. The turning point came when Elwyn Berlekamp, who had worked to crack codes with Simons, bought up Ax's part of the business.

He rebuilt the system to focus on short-term trades, which Ax had resisted due to concerns over commission fees. Berlekamp figured, "If you trade a lot, you only need to be right 51 percent of the time."

Many investors prefer long-term trades, a sentiment Zuckerman describes in his book this way: "...like fishermen ignoring the guppies in their nets, hoping for a bigger catch."

Unlike these investors, Medallion honed in on these 'guppies' — seeking to capitalize on subtle inefficiencies that others overlooked. Don't give up easily. Stick with it. Stick with it. Not forever, but really give it a chance to get where you're going. The final principle is: hope for good luck!

After a decade of adjusting their algorithms aided by improved computer processing power, Renaissance turned the corner in 1990. The Medallion fund posted gains after fees of 58%. But Simons believed they could do even better; he wanted 80% returns.

Berlekamp thought he was crazy and it all became too much for him — he returned to teaching at UC Berkeley. Simons bought Berlekamp's share of the company. Axcom, which had been a separate entity, disbanded. Going forward, it was just Renaissance Technologies.

Simons beefed up the team some more. Henry Laufer, a mathematician from Stony Brook, 
divided the trading day into five-minute intervals instead of hourly, allowing Renaissance to quickly 
detect and act on even shorter-term price changes.

Their models were so successful at making 
trades that they trusted their computers to make decisions that didn't even make 
sense to them. There was, however, one issue. Renaissance was still very small. It only managed $45 million 
after ten years in the business,

a quarter of the assets of rival firm D.E. Shaw. David Shaw was also using 
computer models to trade. AND - he was trading stocks, unlike Renaissance. Simons knew that if he wanted to truly leave 
a legacy, he needed to start trading stocks.

He consolidated all operations in Long Island and was about to embark on a 
new path when tragedy struck. Simons' son Paul, who had 
battled a birth disorder, was cycling in Stony Brook when 
he was struck by a car and killed.

The elderly driver was so 
traumatized by what happened that she died of a heart attack a few days later. The grief of losing a child caused 
Simons to throw himself into his work. In order to master the art of 
trading stocks, he needed more help.

Simons recruited Robert Mercer and Peter Brown, renowned for their groundbreaking work 
in transcribing speech into text at IBM. They saw language as a probabilistic game 
where some words likely follow others. For instance, after "chocolate," 
"milk" is more probable than "cheese."

Similarly, Simons wanted to design a system
that could predict financial market trends. With their coding chops, Brown and Mercer crafted
a single automated stock trading system introduced in 1995, complete with half a million lines of code
compared to tens of thousands in the old system.

After Mercer and Brown mastered
stocks, the Medallion fund took off. In 2000, it achieved an astonishing 98.5% return
after fees, even amidst the dot-com bubble, showcasing Renaissance's prowess
in capitalizing on inefficiencies.

Simons rewarded his staff with
exotic vacations and bonuses. These computer science nerds who were
in it for the challenge, not the money, couldn't help but reap the financial rewards. Staff could personally invest in Medallion. Medallion is only available to employees.
The fund is capped at $10 billion.

In fact, as Medallion grew, it closed its doors to outside investors in 2003 and
is only available to employees. The fund is capped at $10 billion. They bought so many mansions in one neighborhood
that it earned the nickname "Renaissance Riviera."

How exactly Renaissance has
managed to achieve stunning results is a secret. Employees are
bound by non-disclosure agreements, ensuring they remain silent about the
coding and algorithms Renaissance uses. Many firms on Wall Street are trying
to crack the Renaissance code.

JPMorgan Chase makes it mandatory for new
investment bankers and managers to learn coding. With advancements in technology and AI, more
data sets can be collected and analyzed. Even scrutinizing the tone of voice
executives use on conference calls.

Monitoring which aisle shoppers spend
most of their time in grocery stores. Or analyzing social media posts to gauge sentiment
- by the way, let's connect on X, I'm @Newsthink. Medallion is the most successful
hedge fund of all time.

The returns are so high that it
charges a performance fee of 44%. Simons had achieved everything he wanted
to achieve in the world of investing. He thought about retiring. But then…tragedy struck again. His son Nicholas wanted to become a doctor and

open a medical clinic in Nepal
to help its poorest people. A week before he was scheduled to come
home, he drowned while freediving in Bali. Simons had to bury a second child. For a man who believed so
strongly in science and logic,

this unbearable loss was a reminder of
the inherent unpredictability of life. He threw himself into his work once
again to distract him from his grief. Simons launched a larger fund,
the Renaissance Institutional Equities Fund (RIEF), which is
available to outside investors.

RIEF weathered the storm of the
2007 subprime mortgage crisis triggered by high-risk loans given to
Americans with questionable credit. In an unusual move owing to extraordinary
circumstances, Simons felt the need for human intervention, guiding his team to reduce
equity positions and build cash reserves.

Ultimately, Renaissance rebounded and during the
turmoil of 2008, Medallion boasted 82% in profits, highlighting the sophistication and
adaptability of their trading systems. Having achieved all that he wanted in the
world of investing, Simons stepped down

as CEO of Renaissance Technologies in 2009, handing over the reins to Brown and Mercer. Throughout his entire career, Simons maintained a low public profile compared to some of his peers. Yet the spotlight couldn’t help but shine on

Renaissance because of its new co-CEO, Robert Mercer. Mercer distrusted the government, disapproved of the Clintons, and questioned whether humans are the primary cause of climate change. He emerged as one of Trump’s biggest financial

backers in 2016 as he felt only an outsider could win the election. The Mercer family also acquired a significant stake in the conservative outlet Breitbart News. Mercer’s daughter Rebekah recommended the head of Breitbart, Steve Bannon,

to run Trump’s campaign, while Kellyanne Conway became a familiar face on TV. Together, Bannon and Conway helped propel Trump to the White House. On the other hand, Simons was a significant supporter of Hillary Clinton's campaign.

Despite their different political leanings, Simons felt Mercer shouldn’t be fired for his political actions. But then, it started affecting business. Renaissance programmer David Magerman was horrified by the election of Trump and expressed concerns about Mercer’s involvement to Zuckerman for the Wall Street Journal.

Investors shared similar concerns. When the Baltimore City Fire and Police Employees’ Retirement System pulled $32 million from Renaissance, the firm feared a mass exodus. Simons suggested Mercer step down. According to Zuckerman, Mercer “looked sad and hurt.”

In November 2017, Mercer resigned as
co-CEO at Renaissance Technologies and sold his stake in Breitbart News to his daughters. As for Simons? With a personal net worth of $27 billion, he can afford to indulge in luxuries,
like a $100-million superyacht.

Yet his wealth doesn’t just fund lavish pursuits. He’s donated $500 million
to Stony Brook University, established a nonprofit that provides
exceptional math teachers with additional support, and started a charitable foundation that, among
other pursuits, is dedicated to autism research.

a cause close to his heart as his daughter
Audrey, with his second wife, is autistic. The Simons Foundation is also heavily focused
on discovering the origins of the universe. Its Observatory under construction in Chile’s
Atacama Desert will search for gravitational

waves from the Big Bang - hoping to unravel
the mysteries of the universe’s first moments. Perhaps history will not remember
Simons solely for being a master of markets but as the master of the universe. Jim Simons would never have become the greatest

trader of all time had it not been
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And if you get stuck, you can view the
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unlocking all of Brilliant's courses. Thanks for watching. For Newsthink, I’m Cindy Pom.

How a Mathematician Became the Greatest Trader of All Time

Newsthink

짐 사이먼스의 독보적인 투자 성공 사례

르네상스 테크놀로지스의 메달리온 펀드는 30년 동안 연평균 66%의 수익률을 달성했습니다.

1988년에 100달러를 투자했다면 2018년에는 3억 9,870만 달러로 성장했을 것입니다.

Simons는 전통적인 투자자가 아닌 수학자와 과학자를 고용했습니다.

그는 데이터, 컴퓨터 모델, 알고리즘을 활용하는 과학적 접근 방식을 사용했습니다.

그는 미국 국가안보국(NSA)에서 냉전 시대 암호 해독자로 일했습니다.

그의 주치의는 소득 잠재력이 낮다는 이유로 수학을 전공하지 말라고 권유했습니다.

그는 베트남 전쟁에 항의했다는 이유로 암호 해독 직장에서 해고당했습니다.

그는 30세에 스토니 브룩 대학교의 수학과장을 맡았습니다.

양자 컴퓨팅의 기초가 되는 수학적 이론을 개발했습니다.

르네상스 기술의 창립과 초창기

Simons는 1978년 학계를 떠나 자신의 투자 회사를 설립했습니다.

처음에는 Monemetrics라는 회사에서 통화, 상품, 채권을 거래했습니다.

Simons는 알고리즘을 사용하여 시장 패턴을 해독하는 것을 목표로 삼았습니다.

초기 트레이딩은 수학 모델과 인간의 직관에 의존했습니다.

새로운 헤지 펀드인 메달리온을 출시했는데, 초기에는 수익 창출에 어려움을 겪었습니다.

엘윈 베를레캄프가 단기 거래에 초점을 맞춘 구조조정을 단행하면서 전환점이 찾아왔습니다.

메달리온은 10년간의 알고리즘 조정 끝에 상당한 상승세를 기록했습니다.

르네상스는 주식 거래로 확장해야 하는 소규모 회사였습니다.

주식 거래로의 확장 및 후속 성공

로버트 머서와 피터 브라운을 영입하여 주식 거래 시스템을 개발했습니다.

메달리온은 2000년에 98.5%의 수익률을 달성했습니다.

메달리온은 2003년에 외부 투자자에게 100억 달러로 한도를 설정했습니다.

로버트 머서의 정치적 개입과 그 결과

머서의 정치 활동과 트럼프에 대한 지지는 논란을 불러일으켰습니다.

투자자들의 우려로 인해 르네상스에서 자금이 회수되었습니다.

머서는 2017년에 공동 CEO에서 사임했습니다.

Simons는 스토니 브룩 대학교에 상당한 금액을 기부하고 자선 재단을 설립했습니다.

사이먼스 재단은 자폐증 연구와 우주론에 중점을 두고 있습니다.

동영상은 온라인 학습 플랫폼인 Brilliant.org를 추천하는 것으로 마무리됩니다.