Today, we will be talking about one of the most successful hedge funds on Wall Street and the reason why we are covering this firm and the person behind this firm is called Jim Simons who launched the Quantum revolution and for anyone unfamiliar with Jim Simons, he is a brilliant minded mathematician who founded the hedge fund Renaissance Technologies using quantitate models.
Renaissance Technologies using quantitative models and with billions and the asset under management or AUM of Renaissance is average annualized returns of net 39% since 1988 is returns only become more spectacular once you actually discover that Renaissance and vs pay and management and performance fee of 5% and 44% therefore bringing the gross annualized returns to 66%.
Today we will be talking about one of the most successful hedge funds on Wall Street and the reason why we are covering this firm and the person behind this firm is called Jim Simons who launched the Quantum revolution and for anyone unfamiliar with Jim Simons, he is a brilliant minded mathematician who founded the hedge fund Renaissance Technologies using quantitate models.
Renaissance Technologies using quantitative models and with billions and the asset under management or AUM of Renaissance is average annualized returns of net 39% since 1988 is returns only become more spectacular once you actually discover that Renaissance and vs pay and management and performance fee of 5% and 44% therefore bringing the gross annualized returns to 66%.
Due to the firm’s super performance today Jim has an estimated net worth of 23 billion . The Wall Street Journal describe Jim as one of the greatest moneymaker and modern financial history or freezer covered the rise of Renaissance for The Longest Time much of it was still shrouded with mystery . So let’s get behind the scenes of the full story and print with detail and accuracy if you'd like to pick up a copy of The Man Who Sold the market book.
I think anyone could decipher what the firm does and hopefully shed some light on Wall Street so Main Street can have an equal fighting chance. So now is the time have been such a such a huge undertaking because he's renowned for the secrecy and the whole fund is renowned for it's secrecy.
This is the most secretive firm the financial industry has ever seen as ever dealt with day art from the industry that are people there when it came from other firms they generally speaking academics they work there a lot of money and then go back in Academia and they generally don't have any incentive to talk .
At 44 years old, in 1982 he founded Renaissance Technologies, where he served as the chairman and CEO. In 2010, he retired from his role as chairman and CEO of the fund but remains as n non-executive chairman. He was also a code breaker fo the Institute for Defence Analyses during the Vietnam War. His net worth as of 2019 was $21.6 billion.
What happens at Stony Brook University was he lead this department that really struggling and finding and work for the school and again and it's really really respected positions is there was he had a pretty strong motivation to become wealthy you also mentioned that he had no borrow some money and he wasn't sort of happy with the money he was making what was his financial situation like during this period and his life and I just think that's an interesting question asked because we know Jim Simons today is worth 20 something billion dollars bit weird he actually start out from but what was his financial situation like before Renaissance came into the picture was born and lived outside growing industry and he was loving it and family obligations to go and work for it and when it comes to life it says I'm going to do our love and mathematics and again he was middle class that the factory the family factory was successful but not night tremendously.
Let’s get into that a bit more about the early days of Renaissance like it was some of the early wins or some of the stumbling blocks that Jim Simons hired what were the roles he hired and a little bit more about the roots how this started started he decided to become a train to do that it was an American mathematician famous in circles of mathematics .
Jim made his first billion dollars turning point was in 1988 and they started couldn't get much backing from investors even though just getting 1989 I and a while and in terms of how much in a um you can have see I can say um for your audience when it comes to the future is world markets you can't manage and that's what time is wanted to do because he want to become the guy with the market and you could do that just by managing so finally turned the corner in 1996 and so much more to it and then that was really turned out that that's when she started before and I'd love to go in this little bit more if we could spoke about they often get confused as like a phone that just does high-frequency trading you know in and out .
This is obviously what I believe a lot you listeners want to know a little more Insight to the strategies that they are running and you know that the actual approach to the market today and today I'm trying that actually looked into being a fast trading high-frequency and cutting-edge but the technology you're not the most sophisticated believe it or not a joke about it but everything is about patterns that might repeat and these are all based on relationships among equities yes they still do bonds and Investments of their profits come from is that holds 4000 longs and 1000 short so it's a version of the much more to look at it is our trades.
That there's much more to put on a break up the trade so that seem like they're really rapid fire high-frequency type operation but just getting into positions and what they are relationships groups of individual stocks their larger segment of the market in relation to each other in relation to an index in relation to a factor increase the always think of it that way That we are not aware of all the factors affecting the market that we should be in they have a sense that there are more that are just not we just can't said I liken it to sort of be that looking at a flower can just see many more Hughes then you kinda say.
I can just looking at that same flower there that be they can see other things affecting markets and but it's not just about much better system impact on the market much better system of a risk and they can do it and we've got in their Fields .
Jim was someone who you know how to drive to become very wealthy and he became outrageously we'll see what he done with his money what does he do with it and he does that money every public school teacher and math and science in the and with that so that those stay as teachers he believes in the importance of math and science and he thinks he's lost too many people from that world to private industry time in the blame Research on the beginning of life and how is Universe began the first few moments and the big bang was was truly how things began or not he does all kinds of scientific healthcare-related research mouse for America which tries to encourage mathematics education in the United States Stony Brook University education etcetera so we speak a lot of money from Renaissance obviously there were other people involved in some words spoken about her wheels made a lot of money from this venture like and how does their world compared to germs is pretty darn wealthy in there .
Jim Simons I mean it's kind of the Pinnacle of trading success , there was a compelling story here.