<story><title>Jim Simons proved the textbooks wrong, almost</title><url>https://www.bloomberg.com/opinion/articles/2021-01-16/investing-legend-james-simons-s-record-won-t-be-beat</url></story><parent_chain></parent_chain><comment><author>probe</author><text>I’ve found RenTech to be fascinating over the years and highly recommend the book on it “Man who solved the market”&lt;p&gt;Two big takeaways for his success -&lt;p&gt;1) He was pretty early, and quite contrarian, in betting on computer and quant strategies and thus took the “low hanging fruit” early on (def wasn’t low hanging back then when no one knew or believed in computer trades strategies)&lt;p&gt;2) From the book, Rentech’s main strategy was based on “reversion to the mean” - I.e “We make money from the reactions people have to price moves”. Trading on how you think OTHERS will trade and systemizing it (ex vol and momentum) is powerful but clearly doesn’t scale when you become the market yourself&lt;p&gt;And a bonus one - despite being a math genius, he basically was failing till he brought on others. He hired the right people (ie those interested in math not finance), created the right environment, took care of logistics, and pushed on a key insight (model to trade). He couldn’t have done it by himself.</text></comment>
<story><title>Jim Simons proved the textbooks wrong, almost</title><url>https://www.bloomberg.com/opinion/articles/2021-01-16/investing-legend-james-simons-s-record-won-t-be-beat</url></story><parent_chain></parent_chain><comment><author>finnh</author><text>The non-compounding aspect is critical: you can think of the Medallion fund as a business that, with a capital base of (say) 5 billion dollars, produces an annual profit of 2 billion dollars ... but cannot grow, and so distributes all of that profit every year.  Kind of like a very profitable but geographically-isolated monopoly, telco, etc.</text></comment>