Up next in 10
The Mysterious Quant Trader Even WARREN BUFFETT Admires
291 views
Dec 11, 2024
How does one man make Wall Street Legends like George Soros and Julian Robertson look pedestrian in comparison? By rewriting the rules. ✉️ Learn the secrets of legendary traders and investors: https://bit.ly/47pcTJT --- Videos are intended strictly for information, education, and entertainment purposes. Do not base any investment decisions based upon these materials. Please read the disclaimer: https://analyzingalpha.com/disclaimer
View Video Transcript
0:00
on the cusp of a new millennium The Echoes of wall Street's jubilant winter still hangs in the air yet as spring
0:06
arrives the tech bubble bloated and unstable finally bursts its implosion
0:13
reverberates far beyond the confines of the NASDAQ shaking hedge funds Across the Nation at the heart of the chaos
0:19
stands one man a man whose decisions in the face of mounting losses could either Forge a path to unprecedented Victory or
0:26
lead to a catastrophic bankruptcy for his fund this is the story of Jim Simons the man who dared to dream dared to risk
0:34
and dared to win a story that shows us that success is not just about the numbers but about the journey and
0:40
pursuit of one's passion born in the historically rich neighborhood of Brookline Massachusetts
0:47
in 1938 Jim Simons was fortunate enough to have been born into a loving family
0:52
as an only child he was the center of his parents' Universe their Beacon of Hope after suffering multiple
0:58
miscarriages Jim's father a man who built his life from scratch taught Jim the value of chasing his dreams he
1:05
taught him the significance of doing what he loved rather than what he should a lesson that Jim would carry into his
1:11
career as a financier and mathematician yet Jim faced his own set of challenges outside his supportive
1:17
home despite his natural talent for numbers he was often met with skepticism and doubt from those around
1:23
him one day 8-year-old Jim with his eyes full of Dreams confided in his family
1:29
doctor his aspiration to be a mathematician yet his doctor with an amused expression told Jim he'd never be
1:36
able to make a decent living with his love for numbers nonetheless Jim's childhood was filled with moments that
1:42
showcased his unique talent at the age of three he astounded those around him by doubling numbers and dividing them in
1:49
half calculating all the powers of two up to 1,024 just for
1:54
fun but despite this extraordinary Affinity Jim found himself working in a stock room at Breck Garden at the age of
2:01
14 because Jim's thoughts were always centered around math he came across as clumsy and aloof often misplacing
2:08
supplies yet amidst the mundane tasks Jim held on to his dream of studying math at MIT while his own bosses
2:16
regarded this dream with disbelief no one could deny that Jim was a smart boy
2:21
at the Lawrence School in Brooklyn he was elected class president and finished near the top of his grade of course
2:27
Jim's passion for numbers was not his only defining trend he was also known for his mischievous
2:32
side as a teenager he once attempted to sneak into a bque show with his friend Jim harple the two tried to slip away
2:39
from Harp's house brandishing binoculars as a cover for bird watching only to be busted by Harp's father this mischievous
2:46
streak present since his youth would persist not only throughout simons's formative years but would also color his
2:53
professional life in the summer of 1955 Jim Simons a
2:58
fresh-faced high school graduate embarked on a journey that would forever alter his perception of the world a
3:04
cross country road trip with a friend conceived in the spirit of youthful Adventure would serve as his Awakening
3:09
to the realities of economic disparity and racial Prejudice the Mississippi landscape was a stark contrast to Jim's
3:16
sheltered upbringing he watched as African-Americans toiled Under the Sun their lives confined to the unforgiving
3:23
cycle of sharecropping their homes nothing more than repurposed chicken CPS stood as
3:28
monuments of their oppression this road trip a right of passage became a catalyst for Simons he recognized the
3:36
importance of his education not just as a means of personal advancement but as a tool to challenge the status quo with
3:43
renewed fervor Jim began honoring his childhood dream of studying at MIT his natural affinity for numbers Paving the
3:50
way yet even in the prestigious Halls of MIT the impish side of Jim refused to Be
3:56
Tamed as a freshman he once designed a makeshift flamethrower setting Ablaze the college bathrooms luckily the fire
4:03
was contained thanks to the lavatory's brick walls owning up to his fiery prank
4:08
Simons ended up paying the school a total of $50 for reparations a mere Drop in the Ocean compared to the fortune
4:15
he'd later aass needless to say Simon's transition to MIT was not as seamless as
4:21
he had envisioned despite his mathematical proess Jim found himself floundering in a graduate course in abstract algebra
4:28
during his freshman year his classmates seemed to grasp Concepts that eluded him
4:33
which was an exceptionally humbling experience for Jim but Simons was not one to admit defeat he purchased a book
4:40
on the subject and dedicated his whole summer vacation to mastering the elusive principles of abstract algebra hours
4:47
turned into days days into weeks as he wrestled with the complexities of the subject Jim's perseverance paid off when
4:55
he returned to MIT The Following fall he navigated the intricacies of algebra with ease earning A's in every algebra
5:02
class that followed but this isn't the only interesting mathematical concept Jim was introduced to at MIT stokes's
5:09
theorem a sophisticated evolution of Newton's calculus also captivated him it
5:14
was a theory that involved predicting the interaction of objects as disperate as molecules and gravity this Theory
5:20
would later become a golden tool in Jim's Financial career as he would similarly use a myriad of data to
5:26
forecast market trends and a mass of Fortune needless to say his understanding of stokes' theorem was
5:33
top-notch other students flocked to Jim for help in this complicated subject allowing him to weave a network of
5:39
connections among his peers and make new friends but Jim Simons was far from your
5:44
typical college student he found solace in the Solitude of thought often seen lying prone eyes closed in deep
5:52
contemplation he was not idle but deeply engaged in a mental Tango with complex mathematical
5:58
problems when one cold Boston night Jim stumbled upon two of his professors in the middle of a midnight chat about math
6:04
at a local cafe the scene was a tableau of intellectual passion the cigarettes
6:10
the coffee and the math it was a life Jim yearned for a life of intellectual
6:16
Pursuit punctuated by The Simple Pleasures of caffeine and nicotine but Jim was not just a thinker he was also a
6:22
doer MIT mandated physical fitness courses and Jim ever the non-conformist
6:28
chose archery hoping to spend more time on his math studies and less time changing in the showers he transformed
6:34
the mundane into the exciting placing nickel bets on every shot with his friend Jimmy mayor it was a game a
6:41
challenge a risk a foreshadowing of the high stakes world of finance that would later become his playground The Same
6:48
Spirit that found joy in Midnight math debates and nickel bets was about to navigate the Labyrinth of Wall Street
6:54
but first he had to graduate and graduate he did not just from it in 1958
7:01
but from the confines of conventional thinking in the summer following his graduation Jim Simons was not yet the
7:07
finance year who would crack wall Street's impenetrable code he was a young man restless and eager for a taste
7:14
of the world Beyond his textbooks Jim's plan was audacious yet simple he
7:19
persuaded two local dealerships to sponsor his journey a cross-country Odyssey on lameta scooters the Ferraris
7:25
of their time his promise to film The Adventure was enough to secure their report it was an early display of the
7:31
negotiation skills that would later become useful in the financial World however their Adventurer took a dark
7:37
turn in Mexico City they found themselves surrounded by a mob of 50 men wielding machetes the boys backs were
7:44
pressed against a wall their dreams of Adventure suddenly a nightmare luckily the police entered the
7:50
scene not long after to save the day but the boys were thrown in jail for disturbing the peace a far cry from the
7:56
freedom of the open road they had been chasing this ordeal left Simons with a newfound appreciation for
8:03
stability he returned to MIT trading the uncertainty of the open road for the familiar hum of Academia but the seeds
8:10
of Adventure had been sown they would lie dormant waiting for the day they would Sprout and guide him through the
8:16
Labyrinth of Finance where he would make his mark back at MIT Jim's adviser
8:22
recognizing the depth of his talent suggested he moved to the University of California Berkeley there a renowned
8:28
Professor named shiing Shen chern a fellow mathematical Prodigy hailing from China would be Jim's
8:34
Mentor the prospect of learning from such a mind was irresistible and so with the weight of his advisor's words and
8:41
the Allure of a new challenge Jim set his course for the West Coast but life with its neack for unpredictability has
8:48
a way of complicating things Barbara blin a bright-eyed firste student at
8:53
Wellsley College had captured Jim's heart after four nights of talking the two made the Bold decision to get
8:59
engaged we talked and talked and talked Barbara would later recall he was going
9:04
to Berkeley and I wanted to join him the prospect of Barbara moving across the country with a man she barely knew was a
9:11
tough pill for her parents to swallow yet they understood her feelings and reached a compromise she could go to
9:17
Berkeley but marriage would have to wait until her sophomore year but as fate would have it when Jim arrived at
9:23
Berkeley in the late summer of 1959 the mentor he had crossed the country to study under had left for a year long
9:30
sabatical Jim's disappointment was palpable and Barbara watching the man she loved battle his disillusionment
9:36
made a decision that would forever change their lives ignoring her parents' wishes she suggested they get married
9:42
right away their journey to Reno NADA was a testament to their commitment with
9:47
no money to their name they borrowed what they needed to make the trip in a small Chapel under the bright lights of
9:53
the city they exchanged vows known only to them yet in the early days of marriage as he continued to pursue his
10:00
PhD Jim found himself caught in the throws of a new Fascination the thrilling unpredictable world of trading
10:08
a generous wedding gift of $5,000 had landed in the couple's lap and Simons ever the opportunist saw this not as a
10:15
safety net but as a springboard an avid poker player Simons viewed trading much like a game of poker
10:22
but with a larger chess board he plunged into the market investing in United Fruit Company and selenese Corporation
10:29
these were companies that dealt intangible things tropical fruits chemicals but the stocks were stubborn
10:36
their prices barely shifting and Simons found himself straining at the leash of his own impatience his broker sensing Simon's
10:43
restlessness suggested a pivot soybeans this suggestion was a leap into
10:48
the unknown for Simons who had no prior knowledge of Commodities or Futures Trading yet he took to it with the
10:55
hunger of a man starved for challenge he bought two future contracts and watched as the price of soybeans skyrocketed the
11:03
profits rolled in and with them a sense of Triumph just like that Jim was
11:08
hooked a friend seeing simons's growing Obsession offered a word of caution
11:14
Commodities were fickle he warned but Simons bitten by the bug of success brushed him off yet when the price of
11:21
soybeans plummeted it wasn't disappointment that Simons felt but a sharpened desire his days took on a frenetic
11:28
rhythm he would rise with the Dawn driving to San Francisco to be at meril Lynch's office by 7:30 a.m. he stood for hours
11:37
eyes glued to the flashing numbers on the big board making trades in a world that moved at a dizzying pace even at
11:44
home his mind was on the market The Thrill of the trade never far from his thoughts but life in its Relentless
11:51
March began to tug at Simon's his studies demanded his attention his wife Barbara was pregnant the balance he had
11:58
been precariously m containing began to falter with a heavy heart Simon stepped away from Trading yet this was not a
12:05
defeat but a retreat for even as he stepped back Simons was not leaving the game he was simply Bing his time waiting
12:12
for the moment to dive back in armed with Lessons Learned and a hunger that had only
12:18
grown in the early 1960s Jim Simons freshly minted with a prestigious
12:23
teaching position at MIT was perched on the precipice of a promising academic career his wife and their newborn
12:30
Elizabeth had joined him in his move to Cambridge and to the Casual Observer their life was a picture of
12:36
perfection yet Beneath The Happy Family Man facade a restlessness stirred within
12:42
Simon he felt a cold dread at the prospect of his future laid out for him a monotonous stretch of teaching and
12:48
research devoid of any fresh challenges or triumphs at the tender age of 23 Simons
12:54
found himself already grappling with an existential crisis in search of answers
13:00
he briefly left MIT and journeyed back to bogatar hoping to tap into the entrepreneurial Spirit of his Colombian
13:06
schoolmates Eskenazi and mea Simons had noticed that most bogat flooring was of
13:11
incredibly low quality and he saw a glowing business opportunity together the three started a
13:18
Colombian floor tile company that made and sold vinyl floors to the Colombian Market however it was a venture that
13:25
appeared to be in good hands and didn't need much of Simon's contribution and so the Allure of Academia called him
13:33
back in 1963 Jim Simons accepted a research position at Harvard University
13:39
at Harvard Simons was a paradox he was a beloved figure known for his quick wit and casual attire a stark contrast to
13:46
the stiff formal demeanor that was the norm but behind the laughter and the jokes Simons was wrestling with his own
13:53
demons his research was stalling and he felt out of place in the Harvard Community as Simon's navigated the
13:59
Labyrinth of Academia he was struck by a realization wealth a concept not valued
14:05
by his fellow academics was not just a marker of success it was a ticket to Independence and
14:11
influence as Barbara would later recall Jim understood at an early age that money is power he didn't want people to
14:18
have power over him one day in the quiet Solitude of a Harvard Library Simons
14:23
made a decision that would alter the course of his life he would leave Academia behind and embar on a New
14:29
Journey one that would combine his love for math with his yearning for adventure in 1964 Jim Simons left
14:37
Harvard for a clandestine government intelligence group tasked with outmaneuvering the Soviets in the cold
14:42
Wars shadowy chess game at The Institute for defense analyses Simons found himself submerged in a world of numbers
14:49
and codes he was taught to develop mathematical models that could tease out patterns from a sea of seemingly
14:54
meaningless data yet in the middle of this new Venture Simons was as always
14:59
yearning to do something bigger he saw the burgeoning potential of computing power while the world of Securities
15:05
trading remained old-fashioned clinging to Antiquated methods of card sorting for accounting and other
15:11
operations a vision soon took shape in simons's mind a company that could harness the raw power of technology to
15:17
trade and research stocks Simons pitched his idea to his boss dick liebler as
15:23
well as the Ida's top programmer they were swept up in his enthusiasm and agreed to join his venture which he
15:29
named iar but even the most compelling Vision needs fuel and Simons found
15:34
himself unable to raise the necessary Capital iar remained a dream an idea
15:40
that never quite found its footing in reality yet Simons was not at all disheartened by istar's Failure to
15:46
Launch his research on minimal varieties a niche within the realm of differential geometry was beginning to bear fruit it
15:54
was at this point that Simons began to see the world through the lens of statistical analysis and probability
16:00
Theory it was here in the sterile government offices that the seeds of his future trading prowess were
16:06
sown but after an unauthorized interview with Newsweek Simons found himself fired
16:11
and jobless with three young mouths to feed and an uncertain future that's when Simons found himself
16:18
at a Crossroads he confided in Leonard charlot a friend and fellow mathematician about his fears and
16:25
aspirations teaching he felt was too mundane too safe the prospect of joining an investment
16:31
Bank selling convertible bonds held a certain Allure charlot however was less
16:36
than enthusiastic about this idea he saw in Simons a brilliant mind not a Wall
16:41
Street salesman one day a letter arrived for Simons from John Toll the president of
16:47
Stony Brook University a public university on Long Island the offer was tempting a chance to build a mathematics
16:54
Department from scratch so in 1968 at the age of 30 Simons moved his family to
17:00
Long Island he embraced the challenge with gusto Charming recruits and building a department that would soon
17:06
rival the best for a while he left the world of Finance behind choosing Instead
17:12
The Familiar rhythm of Academia and in the hallowed Halls of Stonybrook University mathematicians and
17:18
students alike found a quirky friend in the form of Jim Simons a man who despite
17:24
his towering intellect chose to asso the formal attire that was the norm among his peers
17:30
even during The Frigid New York Winters Simons never wore socks his bare ankles peeking out from under his trousers in
17:38
1976 Simons a mathematician as brilliant as he was eccentric won the Oswald velin
17:44
prize this Accolade bestowed by the American mathematical Society for outstanding contributions to Geometry is
17:51
the mathematical equivalent of a Noel prize a testament to his genius it was a
17:56
Triumph that appeared to set the stage for a long career in Academia however beneath his mathematical prowess and
18:02
affable exterior Simons was a man grappling with restlessness at 33 he was a man in his
18:09
prime yet he was facing a familiar sense of discontent his mischievous nature present since childhood came to light as
18:16
Whispers of his infidelity circulated within the university rumors of a clandestine affair with the Department's
18:22
secretary at home his wife Barbara was battling her own discontent she felt
18:27
overshadowed trapped in the shadow of her husband's Brilliance her own Ambitions stifled the discovery of her affair with
18:34
a younger colleague a man Simons himself had brought into the fold was a devastating blow it was the final nail
18:41
in the coffin of their marriage a painful end to a chapter in their lives for Barbara this was a fresh start
18:48
finally free to chase her own Ambitions she would become a national expert on security problems in computerized voting
18:55
she once recalled We Just Married Too Young my parents were right for Simons
19:01
this period of personal turmoil was a crucible a testing ground that would shape the financier he would become he
19:07
sought the Council of Charles Feld a former student of jyms and a man who had made a name for himself building
19:12
econometric models that could forecast commodity prices with uncanny accuracy
19:18
Simons alongside his Partners invested a sum of $600,000 with Charles
19:23
Feld in a span of 7 months ffel with his DEA handling of sugar future
19:29
managed to multiply the initial investment by 10 The Humble $600,000 had now metamorphosed into a
19:36
staggering 6 million thanks to his ingenious model but how did this math model
19:42
work let's say Crop Production takes a nose dive frf's models would compute the
19:48
likely price surge allowing them to profit when the time comes it was a nent form of quantitative investing a
19:54
strategy that would later become Simon's calling card this strategy caused money to roll in giving Simons a headyy mix of
20:01
success and validation the rush he felt trading reminded him of the days he'd spent at Merill Lynch's offices before Barbara
20:08
got pregnant according to his friend mayor Simons had got the bug it was the
20:13
first time he realized that Finance could be a powerful tool for multiplying his wealth and so Jim found himself
20:19
standing on the precipice of a new beginning the Colombian tile company he' birthed with his Pals in the early 60s
20:26
had just sold a 50% stake and the profit were substantial Simon saw a fresh
20:31
opportunity in this newfound mountain of capital along with his earnings from Feld in 1978 he made a decision that
20:38
would alter the course of his life he decided to permanently step away from Academia leaving behind the world of
20:45
equations and theorems to carve out his own path Simon started his own Investment Company in a storefront
20:51
office in the back of a strip mall focusing his sites on the world of currency trading he named this new
20:57
Venture money metric which he built along with a hedge fund called Lim Roy the concept was simple
21:04
money metrics would act as a testing ground where Simons would invest a modest portion of his own Capital into
21:10
diverse markets if these strategic foray yielded profit he'd replicate these same
21:15
moves on a larger scale in lroy a bigger fund that would also cater to outside investors these new establishments were
21:22
a leap of faith into the financial world of course the prospect of Jim Simons the
21:27
esteemed mathematician abandoning Academia to play the high stakes game of the market was a notion
21:32
that Drew a collective gasp from his peers even his father the man who had instilled in him the courage to follow
21:39
his heart found himself deeply disappointed he had always found a certain pride in introducing his son as
21:45
a scholar rather than a businessman Simons however was no stranger to the feeling of letting others down he would
21:52
later reflect I've always felt like something of an outsider no matter what I was doing hungry for success ESS
21:59
Simon's first move was to find a partner who could match his ambition his choice fell on Leonard Bal a fellow
22:05
mathematician and co-author of the Ida research paper this move much like his
22:10
decision to work with freefield was emblematic of Simon's unorthodox approach to hiring he always favored the
22:17
analytical rigor of mathematicians over the gut instincts of traditional Traders but why hire Leonard Bal in particular
22:24
Bal had a knack for Discerning hidden stats and making predictions in Chao environments a skill set that promised
22:31
to be invaluable in the volatile world of Finance let's see if we can make a model
22:36
Simons proposed and the two prepared to tackle the markets together thus the
22:41
stage was set for a daring Venture into the financial World Bal developed a mean reversion
22:47
Model A system that predicted the eban flow of currency values based on their historical averages needless to say it
22:55
proved to be a gold mine for Simons and his fledgling firm the British pound was the first to yield to bal's astute
23:01
predictions as the currency soared so did Money metric's profits the Japanese
23:06
Yen the West German Deutsche Mark and the Swiss frank followed suit dancing to the tune of bal's insightful model after
23:14
tasting the sweet success of early currency trades Simons decided to add us treasury bond Futures into money
23:20
metric's trading portfolio he and bound promptly assembled a select team to take on the job their mission to construct
23:27
intricate models capable of sniffing out lucrative opportunities in the volatile terrains of currency commodity and bond
23:34
markets but success Jim was soon to learn was a Fickle mistress their models
23:40
once a beacon of accuracy began to falter the competition was growing fiercer the financial landscape was
23:46
shifting and persistent price movements were becoming the norm assets were no longer reverting to their mean as
23:52
expected Simons promptly hired a 19-year-old computer programmer Greg hullander to track the firm's losses
23:59
within 6 months the numbers revealed a worrying Trend bal's shift to bond trading had gone ay the losses were
24:06
piling up yet in the face of adversity Simon's resolve only hardened there's a
24:12
pattern here there has to be a pattern Simons persisted Jim and Bal worked
24:17
tirelessly to develop a new model which they ended up calling the piggy basket
24:23
this system was designed to consume vast amounts of data and use linear algebra to make trading recommendation ations
24:29
for a while the piggy baskets seemed to be the answer to their problems profits were once again on the
24:36
rise then an odd twist occurred the piggy Basket in a puzzling move started
24:42
pouring a vast majority of its resources into potato Futures contracts this represented millions of pounds of main
24:48
potatoes warranting a frustrated phone call from the commodity Futures Trading commission while Simons maintained a
24:55
good sense of humor about the mishap it signaled the end of the once successful piggy basket strategy now the year was
25:02
1982 and bal's discretionary trading style had lost the firm a lot of money Jim Simons decided it was time to try
25:09
something entirely new he sought to delve into the Uncharted territories of tech startups the emerging industries
25:16
that promised to redefine the world thus money metrics became renan's
25:21
Technologies a name echoing The Rebirth of ideas and the dawn of a new era of course Simons was not a man to
25:29
tread lightly on New Paths his first move was to bring aboard James axe a mathematician with an unconventional
25:36
perspective axe was no financier but Simon saw in him a kindred spirit a
25:42
fellow Pioneer unafraid to challenge the status quo meanwhile issues were arising
25:47
with Bal he was a man of Relentless optimism a trait that often led him to clutch onto Investments for too long one
25:54
day in the midst of a gold rush Simons found himself at odds with Bal he urged him to sell their stake in Gold but Bal
26:01
ever the hopeful believed the tide would only rise higher in a desperate bid Simons had to physically place the phone
26:08
to bal's ear forcing him to tell the firm's broker to sell the move was timely the gold market collapsed in a
26:15
matter of months vindicating Simon's foresight however bal's unwavering faith
26:20
in the buy Lowell High principle began to cost rentch serious amounts of capital the losses became too great and
26:27
in 1984 Bal with a heavy heart decided to leave rentech luckily ax proposed a new model
26:35
one that hinged on machine learning and probabilities the idea of using machine learning in finance was virtually
26:40
unheard of at this point making rentech a true Pioneer in the world of Quant trading and while it was a gamble Simons
26:47
was a man who thrived on taking risks their strategy was simple yet revolutionary using data to identify
26:54
patterns and anomalies and leveraging these insights to make trading decisions integral to their strategy was sandor
27:01
Strauss a master of data whose tenure stretched back to the company's infancy his Relentless pursuit of data
27:07
accumulation was the secret source that gave rentech its Competitive Edge
27:12
without Strauss their quantitative strategy the Golden Goose of their profits would have been a mere shadow of
27:18
its potential yet things were not Rosy just yet simons's first hedge fund limo was
27:25
being met with a chorus of investor concern their faith in his Venture Capital pics
27:30
wavering this led him to a bold decision in 1988 Simons shut down limy and from
27:37
its ashes gave birth to a new Venture The Medallion fund however Jim quickly
27:43
realized that he would need to seek out a new leader for his fledgling firm tensions were growing as axe became
27:49
increasingly resistant to Simon's strategic advice particularly his push for a shift towards more volatile
27:55
short-term trading this stubbornness sparked Relentless bickering between the two
28:00
resulting in axe's abrupt departure from The Medallion Fund in 1989 this led Simons to elwin bur Camp a
28:08
game theorist who advocated for short-term trading bur camp like axe was not a traditional financier he was a
28:15
strategist a man who saw the market as a grand chess board burm did well with Medallion
28:21
yielding a 55.9% gain in 1990 but Simons was a man who did not settle for well he
28:28
wanted to make billions Jim's constant prodding and Relentless pursuit of perfection eventually led to tension
28:34
between him and bur Camp feeling the pressure and growing tired of non-stop calls from Jim bur Camp suggested that
28:41
he buy him out and take full control of The Medallion fund and so in the year 1990 Jim did now he was back at the helm
28:50
steering the ship into the unknown in 1993 Simons found himself teetering on
28:55
the edge of a choice that would redefine his career he had been wrestling with the idea of delving into the world of
29:01
equities and his first instinct was to borrow a page from bur Camp's Playbook however it quickly became clear this
29:07
Venture would demand a new model of operation as this model failed to yield the returns he had
29:13
anticipated in the face of this setback Simons turned his gaze towards the horizon where the untapped potential of
29:20
scientific innovation beckoned IBM was a Titan in the world of technology and it
29:25
was from their ranks that Simons plucked Peter Brown and Robert Mercer the two were computer scientists not Traders
29:32
another classic move by Simons to avoid hiring financers Mercer and brown took 2
29:38
years pouring over vast amounts of data seeking out correlations and relationships in the market then in 1995
29:45
they experienced a breakthrough The elusive pieces of the puzzle finally fell into place and The Medallion fund
29:51
under a new model developed by Mercer and brown soared by a staggering 98.5% in the year 2000
29:58
yet Simon stood on the precipice of disaster the tech bubble a sphere of inflated hopes and overvalued stocks
30:05
burst in March 2000 the NASDAQ a once Mighty Titan had been humbled its value
30:11
plunging 25% in a month a harbinger of the 78% Crash from its Zenith the
30:17
financial landscape once familiar and predictable had transformed into a treacherous terrain of
30:23
uncertainty Simon's fund Medallion bore the brunt of this seismic shift
30:28
in the span of 2 days it hemorrhaged $170 million a financial blood letting
30:34
that seemed to have no end the losses like a merciless tide surged towards the
30:39
$300 million Mark Simons however was not a man easily swayed by the storm trust
30:45
the model he implored his team we have to let it ride we can't Panic his words
30:51
were the embodiment of resolve the unyielding spine of a maned many a financial storm yes upon a little more
30:59
self-reflection Simons acknowledged a revelation in the throws of a market crisis the old ways often falter and New
31:06
Paths must be charted the model his trusted Compass needed recalibration with the courage of a
31:13
Pioneer Simons and his team ventured into Uncharted Financial Waters they
31:18
adjusted their model casting aside the momentum strategy like an outborn cloak and reexamining their data sets to forge
31:25
A New Path needless to say the gamble paid off The Medallion fund Rose From the
31:32
Ashes of its losses Like a Phoenix and the rest was truly
31:37
history in the year 2000 Jim Simon stood a top of financial Empire that commanded
31:42
$6 billion dolls his hedge fund was the Envy of Wall Street a Titan in a sea of
31:47
giants Simons a man once told he'd never make a living studying math had defied
31:53
the odds medallions soared by a whopping 99% a staggering feat in the financial
31:59
world to put it in perspective medallions performance even eclipsed that of the legendary financiers George
32:05
Soros Julian Robertson and Paul Tudor Jones over the course of 30 years they
32:11
amassed an average annual return of 62% outpacing even the formidable birkshire
32:17
Hathaway Warren Buffett himself a man known for his skepticism toward day trading once tipped his hat to The
32:23
Medallion fund's success conceding they were very smart
32:28
the New Millennium brought no relief for Simon's rivals in 2001 Medallion rose
32:34
again this time by 33% dwarfing the S&P 500's average gain of 0.2% over the same
32:41
period even other hedge funds with their average gain of 7.3% looked pedestrian
32:47
in comparison but by 2010 Simons true to his character was ready for a new
32:53
chapter he retired stepping back from the day-to-day operations of rentech the The Firm he' built from scratch inside
32:59
of a strip mall he remained an adviser and non-executive chairman a guiding hand rather than the driving force 9
33:07
years later in 2019 he withdrew further retaining only a board membership yet
33:12
for Simons retirement was not an end but a new beginning alongside his wife Marilyn who
33:20
was initially hired as his children's Nanny following his divorce he shifted his Focus towards
33:25
philanthropy the Simons Foundation their brainchild has since contributed over4
33:30
billion dollars to causes close to their hearts among these is math for America a
33:36
nonprofit that supports Educators in the fields of math and science it's a fitting tribute to Simon's own Journey a
33:42
testament to his belief in the power of mathematics today Simons is a fulfilled
33:47
man a multi-billionaire he enjoys the freedom that comes with financial Independence indulging in yach trips and
33:54
the Finer Things in life but more than the wealth is is the Vindication that brings him Joy he has proven the
34:01
naysayers wrong showing that one can follow their passion and still find unbelievable
34:07
success in the end James simons's story is not just one of financial Triumph but
34:13
a testament to the power of perseverance you see Jim Simons didn't just conquer
34:18
the market he redefined the boundaries of possibility proving that with the right blend of passion and courage one
34:24
can indeed shape their own destiny
#Investing
#Stocks & Bonds