In new book, Greg Zuckerman tells the story of hedge fund manager Jim Simons
Greg Zuckerman, a writer at The Wall Street Journal and a nonfiction author, is out today with a new book, titled The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.
Boy genius: Zuckerman tells the life story of billionaire hedge fund manager Jim Simons, one of the most successful investors in modern financial history, who founded Renaissance Technologies in 1982. In the first chapter, Zuckerman details how Simons grew up fascinated by mathematics. At age eight, when his family’s doctor suggested a career in medicine as an ideal profession for a “bright Jewish boy,” Jim replied, “I was to be a mathematician or a scientist.”
Rocky road: The author highlights the setbacks Simons experienced during the stock market crash in 2007, as the Renaissance Institutional Equities Fund (RIEF) and Medallion Fund suffered deep losses. “He didn’t know if his firm could survive much more pain,” writes Zuckerman of an August 6 meeting with investors. “He was scared.” Simons decided to sell more of the company’s equity positions until the market stabilized, a decision met with skepticism. When RIEF and Medallion once again turned a profit, some “complained that the gains would have been larger had Simons not overridden their trading system.” But Simons responded, “I’d make the same decision again.”
High risk: In 2008, Simons and one of his partners, Peter Brown, visited Qatar on business, and decided to try dune bashing in the desert. At some point, when they were riding the dunes at high speed, their vehicle almost turned over. “What if this tips over?” Simons told Stephen Robert, who accompanied him on the ride. “People think I am pretty smart — I am going to die in the dumbest way possible.” But after a few minutes, Simons suddenly realized he was going to be okay. “There’s a principle in physics: We can’t tip over unless the tires have traction! We are in sand, so the tires have nothing to grab on to,” he explained as he “flashed a smile” for figuring out their scientific problem.
Free advice: Earlier this year, during a lecture at the Massachusetts Institute of Technology, his alma mater, Simons was asked which professional investors students should turn to for guidance. George Soros, he replied, according to Zuckerman. “I suppose he’s worth listening to,” Simons said about his Manhattan neighbor, “though he sure talks a lot.” Simons also shared with the audience a few life lessons: “Work with the smartest people you can, hopefully smarter than you… Be persistent, don’t give up easily.”