The Man Who Solved The Market: How Jim Simons Launched The Quant Revolution Quotes
"I wanted to write a book about how James Simons, Renaissance’s founder, had created the greatest moneymaking machine in financial history."
"Subjects, even recalcitrant ones, usually come around. After all, who doesn’t want a book written about them?"
"Simons once quoted Benjamin, the donkey in Animal Farm, to explain his attitude: 'God gave me a tail to keep off the flies. But I’d rather have had no tail and no flies.'"
"Writing about Simons and learning his secrets became my fixation."
"Since 1988, Renaissance’s flagship Medallion hedge fund has generated average annual returns of 66 percent, racking up trading profits of more than $100 billion."
"The average Renaissance employee has nearly $50 million just in the firm’s own hedge funds."
"Early on, Simons made a decision to dig through mountains of data, employ advanced mathematics, and develop cutting-edge computer models."
"Simons developed strategies to corral and manage talent, turning raw brainpower and mathematical aptitude into astonishing wealth."
"Simons has emerged as a modern-day Medici, subsidizing the salaries of thousands of public-school math and science teachers, developing autism treatments, and expanding our understanding of the origins of life."
"Simons never took a single finance class, didn’t care very much for business, and, until he turned forty, only dabbled in trading."
"It’s as if a group of tourists, on their first trip to South America, with a few odd-looking tools and meager provisions, discovered El Dorado and proceeded to plunder the golden city, as hardened explorers looked on in frustration."
"If we have enough data, I know we can make predictions."
"We’re gonna do things better than humans can."
"Jim understood at an early age that money is power. He didn’t want people to have power over him."
"It’s one thing to have good ideas, it’s another to recognize when others do. . . . If there was a pony in your pile of horse manure, he would find it."
"It would make us a stronger country to rebuild Watts than it would to bomb Hanoi."
"It would make us stronger to construct decent transportation on our East Coast than it would to destroy all the bridges in Vietnam."
"I was twenty-nine," Simons explains. "No one had ever asked to interview me. . . . And I was a wise guy."
"Jim, the only difference between a permanent member and a temporary member is a temporary member has a contract," Leibler said. "You don’t."
"That’s ridiculous," Charlap said. "What’s your ideal job?"
"Once I got Lenny involved, I could see the possibilities of building models," Simons later said.
"I’ve always felt like something of an outsider, no matter what I was doing," he later would say. "I was immersed in mathematics, but I never felt quite like a member of the mathematics community. I always had a foot [outside that world]."
"Getting fired can be a good thing. You just don’t want to make a habit of it." - Jim Simons
"I don’t want to have to worry about the market every minute. I want models that will make money while I sleep," Simons said.
"There’s a pattern here; there has to be a pattern," Simons insisted.
"Investors are getting eleven and seven-fucking-eighths!" he exclaimed.
"Why do I need to develop those models?" Baum asked his daughter Stefi. "It’s so much easier making millions in the market than finding mathematical proof."
"If I don’t have a reason for doing something, I leave things as they are and do nothing," he wrote to family members, explaining his trading tactics.
"Truth is much too complicated to allow for anything but approximations." - John von Neumann
"If you make money, you feel like a genius. If you lose, you’re a dope."
"There’s something here," Simons told Ax, encouraging their new approach.
"It’s not a good time to invest in the market," Shannon said.
"Don’t do that—you learn more if you try to work it out yourself," Shannon insisted.
"Truth in life is broad and nuanced; you can make all kinds of arguments, such as whether a president or person is fantastic or awful," he says. "That’s why I love math problems—they have clear answers."
"The goal was to invent a mathematical model and use it as a framework to infer some consequences and conclusions," Carmona says. "The name of the game is not to always be right, but to be right often enough."
"Jim liked to figure out what the model was doing," Straus recalls. "He wasn’t super fond of the kernel."
"Buying investments as they became more expensive and selling them as they fell in value was at odds with leading academic theory, which recommended buying when prices cheapened and taking money off the table when prices richened."
"That’s a dangerous approach, Berlekamp argued, because markets can be volatile."
"Infrequent trading precluded the firm from jumping on new opportunities as they arose and led to losses during extended downturns."
"Ax was a competent mathematician but an incompetent research manager."
"If you trade a lot, you only need to be right 51 percent of the time."
"People persist in their habits longer than they should."
"If you got them right, you could then use the rules to predict what would happen in new situations."
"An order to sell a chunk of Coke shares, for instance, might send that stock down a percentage point or even two, even as Pepsi barely moved."
"Big bureaucratic companies often act like, well, big bureaucratic companies."
"Don’t try to get anything by me because I come from out there."
"Their strategy was simply to wager on the re-emergence of historic relationships between shares."
"Prices that investors are willing to pay can vary widely, reflecting the range of emotions, from optimism to pessimism."
"The spread between the shares reverted to the norm, which made sense, since there had been no reason for Coke’s drop other than Morgan Stanley’s activity."
"We didn’t want anyone with preconceived notions."
"I think people will buy things on the internet."
"What you’re really modeling is human behavior."
"Humans are most predictable in times of high stress—they act instinctively and panic."
"Our entire premise was that human actors will react the way humans did in the past."
"Math is sacred, and Jim was a serious mathematician who could solve the hardest problems."
"No one ever made a decision because of a number. They need a story."
"It only took six months for Soros to regret hiring Druckenmiller."
"There was no way they would let the currency go down."
"Trades like this only happen every twenty years or so."
"The surest way to score huge sums in the market was by unearthing corporate information and analyzing economic trends."
"We can teach you about money. We can't teach you about smart."
"I loved everything about computers. I loved the solitude of the computer lab late at night."
"There's many a slip 'twixt the cup and the lip."
"I couldn’t see how that would even be possible."
"We make money from the reactions people have to price moves."
"If he could save the day, maybe he’d win his bosses over despite his earlier, costly flub."
"Overcome with excitement, he raced to tell Brown what he had discovered."
"His screwup had branded him a nuisance, not any kind of potential savior."
"This is great," Simons boomed at a weekly meeting. "Let’s keep it going."
"Scientists and mathematicians need to interact, debate, and share ideas to generate ideal results."
"If you didn’t make much progress, you’d feel pressure. That was how your self-worth was determined."
"Trust the model," Simons told them. "We have to let it ride; we can’t panic."
"The things we are doing will not go away. We may have bad years, we may have a terrible year sometimes, but the principles we’ve discovered are valid."
"If you didn’t make so much money, you wouldn’t pay so much in taxes."
"We could get killed!" Simons yelled back, fear in his voice.
"People think I’m pretty smart—I’m going to die in the dumbest way possible!"
"I have a right to personal happiness," Whitney responded.
"One could outsmart the market. It just took diligence, intelligence, and a whole lot of gumption."
"We’re right 50.75 percent of the time... but we’re 100 percent right 50.75 percent of the time," Mercer told a friend. "You can make billions that way."
"Instead of beating up the bad teachers, we focus on celebrating the good ones," Simons says. "We give them status and money, and they stay in the field."
"It’s a very big exercise in machine learning, if you want to look at it that way. Studying the past, understanding what happens and how it might impinge, nonrandomly, on the future."
"It’s bad," Trump acknowledged. "No, it’s not bad—it’s over," she told Trump. "Unless you make a change."
"What a waste of time and money," he said, to no one in particular.
"That’s a great idea! We’ll get right on it," Schumer said.
"His views show contempt for the social safety net that he doesn’t need, but many Americans do," Magerman said. "Now he’s using the money I helped him make to implement his worldview."
"I’d like to think I’m speaking out in a way that won’t risk my job, but it’s very possible they could fire me. This is my life’s work—I ran a group that wrote the trading system they still use."
"We saw the corrosive and contaminating effect of dark money on politics."
"People I expected to be warm and fuzzy were standoffish. They see me as the bad guy."
"Best to rise above all this and just live your life without getting caught up in a battle. I honestly think you will be happier."
"Be guided by beauty… it can be the way a company runs, or the way an experiment comes out, or the way a theorem comes out, but there’s a sense of beauty when something is working well, almost an aesthetic to it."
"Most of what I know about writing comes from reading—books from the Providence Public Library, clever critiques of my work from my late father, Alan Zuckerman, and thought-provoking or entertaining articles cut out and shared by my mother, Roberta Zuckerman."
"As I struggled to understand hidden Markov models and explain stochastic differential equations, she soothed, cheered, and encouraged me."
"Even Jim Simons couldn’t have developed a model capable of predicting the happiness you’ve given me."
"My book is dedicated to my sons, Gabriel Benjamin and Elijah Shane."
"The future is unpredictable, but we can always prepare for the unexpected by embracing the unknown with curiosity and an open mind."
"Innovation is born from the intersection of creativity and practicality, where bold ideas meet the rigor of execution."
"True leadership is not about commanding from the front but about inspiring from within, guiding others to discover their own potential."
"Life's most profound lessons are often learned in the face of adversity, shaping our character and guiding our journey."
"The essence of collaboration lies in the harmonious convergence of diverse minds, each contributing a unique perspective towards a common goal."