8 ms·

Interview with James Simons, Billionaire Mathematician [video]

163 points by Jupe 11y ago

mhomde 11y ago
Here's another really interesting documentary about the Black-Scholes formula https://www.youtube.com/watch?v=lmvxZgnwwD4 https://www.youtube.com/watch?v=lmvxZgnwwD4
melling 11y ago
For people who enjoy this video, I recommend this book: http://www.amazon.com/The-Physics-Wall-Street-Unpredictable/dp/0544112431 http://www.amazon.com/The-Physics-Wall-Street-Unpredictable/... Simons is mentioned but he refused to be interviewed for the book. However, it covers the history that leads up to the current day. It's interesting that Simons' fund is pure algorithmic trading. No one decides that a position is too big, for example. Humans are out of the process after they write the algorithms.
- dangero 11y ago
  That is incredibly facinating. The way he talks about the quant models in the interview they sound simple in comparison to his prior work. My suspicion is that mathmeticians are involved in the front end model creation purely to create efficient ways of finding performant models but the models themselves are pretty mundane. The idea of purely data driven models is fascinating because it's generally rejected as too limited and inefficient. I wonder what types of anomolies they have discovered and what data sets they find useful. Also how does historical simulation work when the computer models you were competing against 10 years ago are so different than now?
  - melling 11y ago
    His fund is one of the best on the street, and he has been in business since 1982. http://blogs.wsj.com/deals/2009/03/25/the-hedge-fund-worlds-top-2008-earner-james-simons/ http://blogs.wsj.com/deals/2009/03/25/the-hedge-fund-worlds-... http://www.insidermonkey.com/blog/here-is-why-jim-simons-is-beating-the-market-this-year-4602/ http://www.insidermonkey.com/blog/here-is-why-jim-simons-is-...
- burger_moon 11y ago
  Here's a link without some unnecessary endpoints http://www.amazon.com/The-Physics-Wall-Street-Unpredictable/dp/0544112431/ http://www.amazon.com/The-Physics-Wall-Street-Unpredictable/...
asanagi 11y ago
Help this rich guy get richer by buying his book!
dsugarman 11y ago
I am from Stony Brook, he has done a lot for the community including a nice nature preserve but I can not read his name and not be sad. Despite all this money, his life has been very tragic, two of his three children died young, one drowning and one in a car crash.
- yownie 11y ago
  Not only that, they once funded the collider experiments at a physics laboratory where I worked when NSF had cut funding drastically, we're talking millions of dollars here. https://en.wikipedia.org/?title=Relativistic_Heavy_Ion_Collider#Financial_information https://en.wikipedia.org/?title=Relativistic_Heavy_Ion_Colli... http://www0.bnl.gov/newsroom/news.php?a=21314 http://www0.bnl.gov/newsroom/news.php?a=21314
- cherry_su 11y ago
  Minor correction: he has 3 living children; he had 5, but 2 died. Source: http://www.bloomberg.com/apps/news?pid=nw&pname=mm_0108_story1.html http://www.bloomberg.com/apps/news?pid=nw&pname=mm_0108_stor...
tim_sw 11y ago
The full (hour long interview) is here https://www.youtube.com/watch?v=QNznD9hMEh0 https://www.youtube.com/watch?v=QNznD9hMEh0
- dang 11y ago
  Thanks. That seems covered by the original source rule, so we changed to this from https://www.youtube.com/watch?v=gjVDqfUhXOY https://www.youtube.com/watch?v=gjVDqfUhXOY.
chollida1 11y ago
If anyone is interested in more reading on the history of algorithmic trading, I've posted a screen grab of the top half of one of my book shelves. Some of this maybe a repeat to people as I often get asked for recommendations on how to get into algorithmic trading. http://imgur.com/OdzB4aW http://imgur.com/OdzB4aW http://www.amazon.ca/Fortunes-Formula-Scientific-Betting-Casinos/dp/0809045990 http://www.amazon.ca/Fortunes-Formula-Scientific-Betting-Cas... The history of hte first real quant http://www.amazon.ca/Dark-Pools-Machine-Traders-Rigging-ebook/dp/B006OFHLG6/ http://www.amazon.ca/Dark-Pools-Machine-Traders-Rigging-eboo... The history of the rise of algorithmic trading The phyisics of wall street was mentioned by someone else, great book http://www.amazon.ca/Quants-Whizzes-Conquered-Street-Destroyed-ebook/dp/B0036894XC http://www.amazon.ca/Quants-Whizzes-Conquered-Street-Destroy... This profiles 4 famous traders including Simons, alos a great book http://www.amazon.ca/Heard-Street-Quantitative-Questions-Interviews/dp/0970055234 http://www.amazon.ca/Heard-Street-Quantitative-Questions-Int... A must read if you want to get into quantitative finance. As always, email if you'd like to chat.
- splike 11y ago
  Do any of the books go into detail explaining how and why successful strategies worked? Historically that is. I wouldn't expect any strategies outlined in a book to be profitable today, but I would be interested in how a strategy was formalised.
  - gbersac 11y ago
    Totally agree. A description of his model and how he created it would be awesome ! By the I really enjoyed dark pools. No practical knowledge, but a pleasure to read.
  - evanpw 11y ago
    I've found this blog to be really excellent: https://mechanicalmarkets.wordpress.com https://mechanicalmarkets.wordpress.com. Example: https://mechanicalmarkets.wordpress.com/2015/04/30/market-data-patterns-order-anticipation-and-an-example-trading-strategy/ https://mechanicalmarkets.wordpress.com/2015/04/30/market-da...
  - 11y ago
abulman 11y ago
I can also recommend the rest of the Numberphile videos https://www.youtube.com/channel/UCoxcjq-8xIDTYp3uz647V5A https://www.youtube.com/channel/UCoxcjq-8xIDTYp3uz647V5A - as well as the other channels by the same person.
tfgg 11y ago
What I love about Simons is that he's funding to solve the problem of my field, the Many Electron Problem: https://www.simonsfoundation.org/mathematics-and-physical-science/many-electron-collaboration/ https://www.simonsfoundation.org/mathematics-and-physical-sc... It's so important for physics, materials science and chemistry, but feels so esoteric. It's wonderful that there's someone like Simons with both money and the ability to understand the problem :) edit: He also possibly implies that the best way to help maths and theoretical physics is to leave the field, attempt to get rich in finance, and pump money back in.
- chii 11y ago
  It's sad that this is a good way to fund fundamental research. Why is it that finance make more than what seems to be more important and useful like math or science!?
  - darkmighty 11y ago
    Being sad about it is not so useful. You can actually help! Either becoming rich and helping basic science (of course) or voting well and influencing government decisions. Simons is clearly very talented at what he does, his firm (how it is run, etc) seems quite amazing. And he's "doing" more science this way. It makes an awful lot of sense.
    - chii 11y ago
      > And he's "doing" more science this way. but he's not "doing" science anymore, and if i were in love with doing science, i really wouldn't want to go into finance, do lots of stuff i don't personally feel passionate about, get really rich, then pay other researchers to do science.
      - fleitz 11y ago
        And that is why people in the market get paid lots of money, no one wants to do it, yet it's essential to the functioning of society. Most people call this being an adult, instead of 'following your dreams'.
mathgenius 11y ago
Wow, I love his brooklyn accent. Makes him sound so grounded. I guess Feynman has (had) a similar accent; and i was similarly enthralled hearing his voice (recording) for the first time. Somehow I always presume these guys should speak with an English accent, like Penrose. Hehe.
- davnicwil 11y ago
  Or Hawking.. oh wait :-)
- telcal 11y ago
  Brooklyn accent?? No, not at all. He grew up in Brookline, Massachusetts, a much different place... and accent!
discardorama 11y ago
His Medallion Fund seems to have done really well. From another article: Simon's flagship fund, Medallion, requires aminimum investment of several million dollars and charges a 5% management fee and a jaw-dropping 44% performance fee. The fund is closed to new investment and has returned an astounding annual average net of 38% (remember, that's after the high fees). Since its 1988 launch, the fund has lost money in only one year, 1989, which saw a drawdown of 4%. But I have to ask: why limit the fund to multi-millionaire investors? Why not open it to the other investors too and let them benefit for a change? This is just the "rich-getting-richer". If anybody needs a 38% average annual return, it's most certainly not a multimillionaire; it's more likely a middle-class person who could use the gains. I apologize for sounding negative here, but this inequity is something that bothers me.
- mark212 11y ago
  first off, there are strict SEC rules on what constitutes a qualified investor. But second, nobody in the hedge fund world wants to hand-hold a bunch of limited partners -- the fewer the better. And if you've got a track record like Simon (and Steve Cohen and Ray Dalio and Paul Tudor Jones and DE Shaw and a few others) then you're likely way oversubscribed whenever you want to open a new fund and as a result can be very picky about whose money to take. Hence the 44% carry.
- proksoup 11y ago
  I also wonder why those limits exist more generally, not just for this fund. Maybe those limits affect the timelines on which money is invested and in which it is withdrawn, where-as actually having rules about such things would not work as well.
  - gech 11y ago
    Was thinking about this as well. In the interview he talks about the act of making a trade moves the market itself. You can't create too much trading volume or you will have distorted the market so much that you can't trade effectively after. I would imagine he can move and make money at a certain volume (a bank roll of 200 million) and guarantee returns because that level won't distort. But if he had hundreds of billions he couldn't guarantee returns because the moves he would have to make would be so large as to distort the market beyond their measuring. Much like the observer effect in physics, possibly a trader's effect here.
athesyn 11y ago
I always wonder if this type of success what naturally happens when someone this highly intelligent uses all their brainpower for gaining wealth.
- adventured 11y ago
  No, right place / right time / right choices etc still plays an overwhelming role in the wealth generation. For every thousand geniuses that try to get really rich, there's one Simons or Buffett that pulls it off. You could run a simulation with a large number of people of equal mental capability, almost all of them would fail. Just the broader requirements alone would be enough to instantly flunk most people out of the running (the other skills required that Simons possesses beyond his intellect).
Tycho 11y ago
Information on Renaissance Technologies is so incredibly sparse. It must be a fascinating workplace! It's fun to speculate on the nature of their success (specifically the Medallion fund). 3 possibilitiese spring to mind: 1. Best in class execution on winner-takes-all strategies. Eg. 10 hedge funds all try the same arbitrage trade but only the quickest one make money. 2. A killer app that no one else knows about. Like, I dunno, artificial intelligence... 3. Medallion is just a legend built up to lure investors into their public funds and collect the fees. Joking on that last one. What I drew from this interview was that while Simons is obviously incredibly smart, they key thing was that at Stony Brook he learned how to put together a team of other very smart people, and that more than any individual financial insight has generated his success in investing.
jgalt212 11y ago
For me, James Simons, is first and foremost a tax dodger. Renaissance Technologies LLC used contracts with the banks to establish the “fiction” that it wasn’t the owner of thousands of stocks traded each day http://www.bloomberg.com/news/articles/2014-07-21/renaissance-avoided-more-than-6-billion-tax-report-says http://www.bloomberg.com/news/articles/2014-07-21/renaissanc...
- vixen99 11y ago
  As elsewhere in these comments: tax dodging is an obligation for any intelligent person. "No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue" Lord Clyde gave this famous quote (in taxation circles) in the case of Ayrshire Pullman Motor Services v Inland Revenue [1929] 14 Tax Case 754, at 763,764:
  - jgalt212 11y ago
    except for the fact that the tax dodging services Barclays helped enact for Rennaissance were illegal.
    - gaadd33 11y ago
      Where does it say that in the article? Or that Rennaissance was found guilty?
      - jgalt212 11y ago
        Please don't be so naive. It's only because Renaissance is so rich and powerful that they are not in jail. If some piker tried the same strategies, they'd be in jail. The politicians are afraid to jail billionaires. > The Democrat stopped short of saying that any of the activities that allowed Renaissance to lower its tax bills were illegal, and said it appears the banks stopped offering them after the IRS started to question the financial arrangements. http://thehill.com/policy/finance/212875-probe-banks-hedge-funds-used-fictions-to-skirt-capital-gains-taxes http://thehill.com/policy/finance/212875-probe-banks-hedge-f...
matthewwiese 11y ago
Anyone happen to have a transcript or alternative site to view the video from? I'm stuck behind the GFW without a VPN, and I'd love to watch this now as opposed to waiting until I get back to the States.
- orthoganol 11y ago
  Just sign up for a free trial for Astrill. Being in China without a VPN is insanity.
lmg643 11y ago
Also engaged in one of the most ridiculous tax dodges of all time. Uses a "derivative" with his brokers that allows a bunch of short term trades to be taxed at long term capital gains rates. http://www.bloomberg.com/news/articles/2013-07-01/simons-strategy-to-shield-profit-from-taxes-draws-irs-ire http://www.bloomberg.com/news/articles/2013-07-01/simons-str...
- laichzeit0 11y ago
  Are you implying that he shouldn't do this even though it's not breaking any laws?
- vixen99 11y ago
  Nothing ridiculous about any legal interpretation of tax laws that allows one to minimize one's contribution. It's common sense. Even more so given the outrageous way in which government wastes the revenue it gets. "No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue" Lord Clyde gave this famous quote (in taxation circles) in the case of Ayrshire Pullman Motor Services v Inland Revenue [1929] 14 Tax Case 754, at 763,764:
yownie 11y ago
He was also part of the team that audited Lucifer an early precursor to DES, that Steven Levy mentions in his Crypto Wars book.
argumentum 11y ago
Also worth reading about is his co-founder & the former chief scientist at renaissance, Nick Patterson. If there's anyone whose literally a "mad scientist" he's it (in a good way). A close friend of mine at MIT collaborates with Nick, and when we asked why he left finance to return to academia he said "well, James is into boats and he wanted a bigger one". Nonetheless, both great guys. http://www.nytimes.com/2006/12/12/science/12prof.html?pagewanted=all http://www.nytimes.com/2006/12/12/science/12prof.html?pagewa...

163 points by Jupe 11y ago

Here's another really interesting documentary about the Black-Scholes formula https://www.youtube.com/watch?v=lmvxZgnwwD4 https://www.youtube.com/watch?v=lmvxZgnwwD4

melling 11y ago

For people who enjoy this video, I recommend this book: http://www.amazon.com/The-Physics-Wall-Street-Unpredictable/dp/0544112431 http://www.amazon.com/The-Physics-Wall-Street-Unpredictable/... Simons is mentioned but he refused to be interviewed for the book. However, it covers the history that leads up to the current day. It's interesting that Simons' fund is pure algorithmic trading. No one decides that a position is too big, for example. Humans are out of the process after they write the algorithms.

dangero 11y ago
That is incredibly facinating. The way he talks about the quant models in the interview they sound simple in comparison to his prior work. My suspicion is that mathmeticians are involved in the front end model creation purely to create efficient ways of finding performant models but the models themselves are pretty mundane. The idea of purely data driven models is fascinating because it's generally rejected as too limited and inefficient. I wonder what types of anomolies they have discovered and what data sets they find useful. Also how does historical simulation work when the computer models you were competing against 10 years ago are so different than now?
- melling 11y ago
  His fund is one of the best on the street, and he has been in business since 1982. http://blogs.wsj.com/deals/2009/03/25/the-hedge-fund-worlds-top-2008-earner-james-simons/ http://blogs.wsj.com/deals/2009/03/25/the-hedge-fund-worlds-... http://www.insidermonkey.com/blog/here-is-why-jim-simons-is-beating-the-market-this-year-4602/ http://www.insidermonkey.com/blog/here-is-why-jim-simons-is-...
burger_moon 11y ago
Here's a link without some unnecessary endpoints http://www.amazon.com/The-Physics-Wall-Street-Unpredictable/dp/0544112431/ http://www.amazon.com/The-Physics-Wall-Street-Unpredictable/...

asanagi 11y ago

Help this rich guy get richer by buying his book!

dsugarman 11y ago

I am from Stony Brook, he has done a lot for the community including a nice nature preserve but I can not read his name and not be sad. Despite all this money, his life has been very tragic, two of his three children died young, one drowning and one in a car crash.

yownie 11y ago
Not only that, they once funded the collider experiments at a physics laboratory where I worked when NSF had cut funding drastically, we're talking millions of dollars here. https://en.wikipedia.org/?title=Relativistic_Heavy_Ion_Collider#Financial_information https://en.wikipedia.org/?title=Relativistic_Heavy_Ion_Colli... http://www0.bnl.gov/newsroom/news.php?a=21314 http://www0.bnl.gov/newsroom/news.php?a=21314
cherry_su 11y ago
Minor correction: he has 3 living children; he had 5, but 2 died. Source: http://www.bloomberg.com/apps/news?pid=nw&pname=mm_0108_story1.html http://www.bloomberg.com/apps/news?pid=nw&pname=mm_0108_stor...

tim_sw 11y ago

The full (hour long interview) is here https://www.youtube.com/watch?v=QNznD9hMEh0 https://www.youtube.com/watch?v=QNznD9hMEh0

dang 11y ago
Thanks. That seems covered by the original source rule, so we changed to this from https://www.youtube.com/watch?v=gjVDqfUhXOY https://www.youtube.com/watch?v=gjVDqfUhXOY.

chollida1 11y ago

If anyone is interested in more reading on the history of algorithmic trading, I've posted a screen grab of the top half of one of my book shelves. Some of this maybe a repeat to people as I often get asked for recommendations on how to get into algorithmic trading. http://imgur.com/OdzB4aW http://imgur.com/OdzB4aW http://www.amazon.ca/Fortunes-Formula-Scientific-Betting-Casinos/dp/0809045990 http://www.amazon.ca/Fortunes-Formula-Scientific-Betting-Cas... The history of hte first real quant http://www.amazon.ca/Dark-Pools-Machine-Traders-Rigging-ebook/dp/B006OFHLG6/ http://www.amazon.ca/Dark-Pools-Machine-Traders-Rigging-eboo... The history of the rise of algorithmic trading The phyisics of wall street was mentioned by someone else, great book http://www.amazon.ca/Quants-Whizzes-Conquered-Street-Destroyed-ebook/dp/B0036894XC http://www.amazon.ca/Quants-Whizzes-Conquered-Street-Destroy... This profiles 4 famous traders including Simons, alos a great book http://www.amazon.ca/Heard-Street-Quantitative-Questions-Interviews/dp/0970055234 http://www.amazon.ca/Heard-Street-Quantitative-Questions-Int... A must read if you want to get into quantitative finance. As always, email if you'd like to chat.

splike 11y ago
Do any of the books go into detail explaining how and why successful strategies worked? Historically that is. I wouldn't expect any strategies outlined in a book to be profitable today, but I would be interested in how a strategy was formalised.
- gbersac 11y ago
  Totally agree. A description of his model and how he created it would be awesome ! By the I really enjoyed dark pools. No practical knowledge, but a pleasure to read.
- evanpw 11y ago
  I've found this blog to be really excellent: https://mechanicalmarkets.wordpress.com https://mechanicalmarkets.wordpress.com. Example: https://mechanicalmarkets.wordpress.com/2015/04/30/market-data-patterns-order-anticipation-and-an-example-trading-strategy/ https://mechanicalmarkets.wordpress.com/2015/04/30/market-da...
- 11y ago

abulman 11y ago

I can also recommend the rest of the Numberphile videos https://www.youtube.com/channel/UCoxcjq-8xIDTYp3uz647V5A https://www.youtube.com/channel/UCoxcjq-8xIDTYp3uz647V5A - as well as the other channels by the same person.

tfgg 11y ago

What I love about Simons is that he's funding to solve the problem of my field, the Many Electron Problem: https://www.simonsfoundation.org/mathematics-and-physical-science/many-electron-collaboration/ https://www.simonsfoundation.org/mathematics-and-physical-sc... It's so important for physics, materials science and chemistry, but feels so esoteric. It's wonderful that there's someone like Simons with both money and the ability to understand the problem :) edit: He also possibly implies that the best way to help maths and theoretical physics is to leave the field, attempt to get rich in finance, and pump money back in.

chii 11y ago
It's sad that this is a good way to fund fundamental research. Why is it that finance make more than what seems to be more important and useful like math or science!?
- darkmighty 11y ago
  Being sad about it is not so useful. You can actually help! Either becoming rich and helping basic science (of course) or voting well and influencing government decisions. Simons is clearly very talented at what he does, his firm (how it is run, etc) seems quite amazing. And he's "doing" more science this way. It makes an awful lot of sense.
  - chii 11y ago
    > And he's "doing" more science this way. but he's not "doing" science anymore, and if i were in love with doing science, i really wouldn't want to go into finance, do lots of stuff i don't personally feel passionate about, get really rich, then pay other researchers to do science.
    - fleitz 11y ago
      And that is why people in the market get paid lots of money, no one wants to do it, yet it's essential to the functioning of society. Most people call this being an adult, instead of 'following your dreams'.

mathgenius 11y ago

Wow, I love his brooklyn accent. Makes him sound so grounded. I guess Feynman has (had) a similar accent; and i was similarly enthralled hearing his voice (recording) for the first time. Somehow I always presume these guys should speak with an English accent, like Penrose. Hehe.

davnicwil 11y ago
Or Hawking.. oh wait :-)
telcal 11y ago
Brooklyn accent?? No, not at all. He grew up in Brookline, Massachusetts, a much different place... and accent!

discardorama 11y ago

His Medallion Fund seems to have done really well. From another article: Simon's flagship fund, Medallion, requires aminimum investment of several million dollars and charges a 5% management fee and a jaw-dropping 44% performance fee. The fund is closed to new investment and has returned an astounding annual average net of 38% (remember, that's after the high fees). Since its 1988 launch, the fund has lost money in only one year, 1989, which saw a drawdown of 4%. But I have to ask: why limit the fund to multi-millionaire investors? Why not open it to the other investors too and let them benefit for a change? This is just the "rich-getting-richer". If anybody needs a 38% average annual return, it's most certainly not a multimillionaire; it's more likely a middle-class person who could use the gains. I apologize for sounding negative here, but this inequity is something that bothers me.

mark212 11y ago
first off, there are strict SEC rules on what constitutes a qualified investor. But second, nobody in the hedge fund world wants to hand-hold a bunch of limited partners -- the fewer the better. And if you've got a track record like Simon (and Steve Cohen and Ray Dalio and Paul Tudor Jones and DE Shaw and a few others) then you're likely way oversubscribed whenever you want to open a new fund and as a result can be very picky about whose money to take. Hence the 44% carry.
proksoup 11y ago
I also wonder why those limits exist more generally, not just for this fund. Maybe those limits affect the timelines on which money is invested and in which it is withdrawn, where-as actually having rules about such things would not work as well.
- gech 11y ago
  Was thinking about this as well. In the interview he talks about the act of making a trade moves the market itself. You can't create too much trading volume or you will have distorted the market so much that you can't trade effectively after. I would imagine he can move and make money at a certain volume (a bank roll of 200 million) and guarantee returns because that level won't distort. But if he had hundreds of billions he couldn't guarantee returns because the moves he would have to make would be so large as to distort the market beyond their measuring. Much like the observer effect in physics, possibly a trader's effect here.

athesyn 11y ago

I always wonder if this type of success what naturally happens when someone this highly intelligent uses all their brainpower for gaining wealth.

adventured 11y ago
No, right place / right time / right choices etc still plays an overwhelming role in the wealth generation. For every thousand geniuses that try to get really rich, there's one Simons or Buffett that pulls it off. You could run a simulation with a large number of people of equal mental capability, almost all of them would fail. Just the broader requirements alone would be enough to instantly flunk most people out of the running (the other skills required that Simons possesses beyond his intellect).

Tycho 11y ago

Information on Renaissance Technologies is so incredibly sparse. It must be a fascinating workplace! It's fun to speculate on the nature of their success (specifically the Medallion fund). 3 possibilitiese spring to mind: 1. Best in class execution on winner-takes-all strategies. Eg. 10 hedge funds all try the same arbitrage trade but only the quickest one make money. 2. A killer app that no one else knows about. Like, I dunno, artificial intelligence... 3. Medallion is just a legend built up to lure investors into their public funds and collect the fees. Joking on that last one. What I drew from this interview was that while Simons is obviously incredibly smart, they key thing was that at Stony Brook he learned how to put together a team of other very smart people, and that more than any individual financial insight has generated his success in investing.

jgalt212 11y ago

For me, James Simons, is first and foremost a tax dodger. Renaissance Technologies LLC used contracts with the banks to establish the “fiction” that it wasn’t the owner of thousands of stocks traded each day http://www.bloomberg.com/news/articles/2014-07-21/renaissance-avoided-more-than-6-billion-tax-report-says http://www.bloomberg.com/news/articles/2014-07-21/renaissanc...

vixen99 11y ago
As elsewhere in these comments: tax dodging is an obligation for any intelligent person. "No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue" Lord Clyde gave this famous quote (in taxation circles) in the case of Ayrshire Pullman Motor Services v Inland Revenue [1929] 14 Tax Case 754, at 763,764:
- jgalt212 11y ago
  except for the fact that the tax dodging services Barclays helped enact for Rennaissance were illegal.
  - gaadd33 11y ago
    Where does it say that in the article? Or that Rennaissance was found guilty?
    - jgalt212 11y ago
      Please don't be so naive. It's only because Renaissance is so rich and powerful that they are not in jail. If some piker tried the same strategies, they'd be in jail. The politicians are afraid to jail billionaires. > The Democrat stopped short of saying that any of the activities that allowed Renaissance to lower its tax bills were illegal, and said it appears the banks stopped offering them after the IRS started to question the financial arrangements. http://thehill.com/policy/finance/212875-probe-banks-hedge-funds-used-fictions-to-skirt-capital-gains-taxes http://thehill.com/policy/finance/212875-probe-banks-hedge-f...

matthewwiese 11y ago

Anyone happen to have a transcript or alternative site to view the video from? I'm stuck behind the GFW without a VPN, and I'd love to watch this now as opposed to waiting until I get back to the States.

orthoganol 11y ago
Just sign up for a free trial for Astrill. Being in China without a VPN is insanity.

lmg643 11y ago

Also engaged in one of the most ridiculous tax dodges of all time. Uses a "derivative" with his brokers that allows a bunch of short term trades to be taxed at long term capital gains rates. http://www.bloomberg.com/news/articles/2013-07-01/simons-strategy-to-shield-profit-from-taxes-draws-irs-ire http://www.bloomberg.com/news/articles/2013-07-01/simons-str...

laichzeit0 11y ago
Are you implying that he shouldn't do this even though it's not breaking any laws?
vixen99 11y ago
Nothing ridiculous about any legal interpretation of tax laws that allows one to minimize one's contribution. It's common sense. Even more so given the outrageous way in which government wastes the revenue it gets. "No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue" Lord Clyde gave this famous quote (in taxation circles) in the case of Ayrshire Pullman Motor Services v Inland Revenue [1929] 14 Tax Case 754, at 763,764:

yownie 11y ago

He was also part of the team that audited Lucifer an early precursor to DES, that Steven Levy mentions in his Crypto Wars book.

argumentum 11y ago

Also worth reading about is his co-founder & the former chief scientist at renaissance, Nick Patterson. If there's anyone whose literally a "mad scientist" he's it (in a good way). A close friend of mine at MIT collaborates with Nick, and when we asked why he left finance to return to academia he said "well, James is into boats and he wanted a bigger one". Nonetheless, both great guys. http://www.nytimes.com/2006/12/12/science/12prof.html?pagewanted=all http://www.nytimes.com/2006/12/12/science/12prof.html?pagewa...