{"id":412341,"date":"2020-08-10T05:57:25","date_gmt":"2020-08-10T09:57:25","guid":{"rendered":"https:\/\/financhill.com\/blog\/?p=412341"},"modified":"2020-08-11T12:42:08","modified_gmt":"2020-08-11T16:42:08","slug":"why-is-jim-simons-famous","status":"publish","type":"post","link":"https:\/\/financhill.com\/blog\/investing\/why-is-jim-simons-famous","title":{"rendered":"Why Is Jim Simons Famous?"},"content":{"rendered":"<p><span style=\"background-color: transparent; color: #0e101a;\">You don\u2019t need to spend much time learning about investing before you encounter the name \u201cJim Simons.\u201d At first, you may wonder, why is Jim Simons famous? Sure, he has a solid reputation as an investor who has accumulated tremendous wealth. But that\u2019s true of many successful investors.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Here&#8217;s the skinny on this extraordinary investor.<\/span><\/p>\n<h2><span style=\"background-color: transparent; color: #0e101a;\">Simons Is A Brilliant Mathematician<\/span><\/h2>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Most of Jim Simons\u2019 wealth and fame stems from the same origin: he\u2019s a brilliant mathematician. <\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Simons\u2019 earned a bachelor\u2019s degree in mathematics from MIT in 1958. Then he enrolled in the Ph.D. program at the University of California, Berkeley. His Ph.D. thesis was so impressive that he started working with Berkeley mathematician Shing-Shem Chem on an idea that eventually became known as <\/span><a style=\"background-color: transparent; color: #4a6ee0;\" href=\"https:\/\/inis.iaea.org\/collection\/NCLCollectionStore\/_Public\/27\/042\/27042635.pdf?r=1&amp;r=1\" target=\"_blank\" rel=\"noopener noreferrer\">Chem-Simons theory<\/a><span style=\"background-color: transparent; color: #0e101a;\">. His work led to several prizes in mathematics and geometry.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\"><strong>Simons\u2019 work in math and geometry got the attention of MIT, Harvard University, and Stony Brook University<\/strong>. <strong>He taught at all three before deciding to take a faculty position at Stony Brook University.<\/strong><\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Jim Simons didn\u2019t keep his work in the academic world. <strong>He also spent time breaking codes for the National Security Agency and the Institute for Defense Analysis.<\/strong> <\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\"><a href=\"https:\/\/financhill.com\/search\/seasonality\/IBM\">IBM<\/a> hired him to find a way to block one of the earliest computer attacks in 1973. His work with IBM led to improved security standards.<\/span><\/p>\n<p><iframe loading=\"lazy\" style=\"margin: 0 auto; border: 0;\" src=\"https:\/\/financhill.com\/widget\/stock-score\/IBM\" width=\"720\" height=\"500\" frameborder=\"0\" scrolling=\"no\" seamless=\"\"><\/iframe><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">All of these achievements make Jim Simons an interesting person, but they don\u2019t answer the question, Why is Jim Simons famous? After all, plenty of brilliant mathematicians never earn a cult status outside of their professions.<\/span><\/p>\n<p><strong><span style=\"background-color: transparent; color: #0e101a;\">Simons may have continued to work in relative obscurity, but he decided to apply his mathematical brilliance to the investment world. Then, everything changed.<\/span><\/strong><\/p>\n<h2><span style=\"background-color: transparent; color: #0e101a;\">Jim Simons Is a Billionaire<\/span><\/h2>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Jim Simons used his deep understanding of mathematics to make unbiased investment decisions.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">As of 2020, <strong>Jim Simons has a net worth of about $21.6 billion, which makes him one of the 50 wealthiest people in the world.<\/strong><\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Simons certainly earned good money working for colleges and the government. Most of his wealth, however, comes from investing. <strong>His net worth skyrocketed after he founded Renaissance Technologies.<\/strong><\/span><\/p>\n<h2><span style=\"background-color: transparent; color: #0e101a;\">Simons Founded Ultra Secretive Renaissance Technologies<\/span><\/h2>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Jim Simons founded\u00a0<\/span><a style=\"background-color: transparent; color: #4a6ee0;\" href=\"https:\/\/www.rentec.com\/Home.action?index=true\" target=\"_blank\" rel=\"noopener noreferrer\">Renaissance Technologies<\/a><span style=\"background-color: transparent; color: #0e101a;\">\u00a0in 1982. As of June 2019, the hedge fund manages $110 billion in assets.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Renaissance Technologies uses mathematical models to make investment decisions. This approach works well for many hedge funds. Renaissance Technologies, however, gets unbelievable returns from its top fund.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">The astounding returns couldn\u2019t happen without Simons\u2019 knowledge of mathematics. Renaissance Technologies keeps its methods secret, so very few people have access to the models used to predict the market\u2019s movement. <\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Obviously, the model relies on statistical analyses that review big data to identify emerging trends. Focusing on math also takes human emotions out of trading. <\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Many investors make mistakes because they rely on gut instincts. They feel like something will happen in the tech industry, so they find a company they like and invest heavily in its stock. That approach can work, but it doesn\u2019t generate exceptional returns as math-based models can.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Renaissance Technologies offers three products:<\/span><\/p>\n<ul>\n<li><strong><span style=\"background-color: transparent; color: #0e101a;\">The Medallion Fund<\/span><\/strong><\/li>\n<li><strong><span style=\"background-color: transparent; color: #0e101a;\">The Institutional Equities Fund<\/span><\/strong><\/li>\n<li><strong><span style=\"background-color: transparent; color: #0e101a;\">Institutional Diversified Alpha<\/span><\/strong><\/li>\n<\/ul>\n<p><span style=\"background-color: transparent; color: #0e101a;\">The Medallion Fund gets the most attention because it generates tremendous returns. From April 2019 to April 2020, the\u00a0<\/span><a style=\"background-color: transparent; color: #4a6ee0;\" href=\"https:\/\/www.wsj.com\/articles\/renaissance-s-10-billion-medallion-fund-gains-24-year-to-datein-tumultuous-market-11587152401\" target=\"_blank\" rel=\"noopener noreferrer\">Medallion Fund gained 24%<\/a><span style=\"background-color: transparent; color: #0e101a;\">. While 2019 was a good year for the market, the beginning of 2019 found prices jumping all over the place.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\"> As people began to realize that coronavirus would disrupt their lives, the market responded wildly. It\u2019s amazing that the Medallion Fund managed to earn so much money during a time when many funds were losing.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Simons left Renaissance Technologies in 2020 to retire. His retirement, however, has been quite busy compared to most. He still acts as a non-executive chairman of the fund he created. He also continues to support lobbying efforts and philanthropic pursuits.<\/span><\/p>\n<h2><span style=\"background-color: transparent; color: #0e101a;\">Jim Simons\u2019 Returns Are Astronomical<\/span><\/h2>\n<p><span style=\"background-color: transparent; color: #0e101a;\">How much do you expect to get back on your investments? If you invest in the S&amp;P, you can expect to earn about 12.25%, which is the average return from 1923 to 2016. You\u2019d probably feel pretty lucky to get 12.25%, right?<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">You won\u2019t feel so terrific once you see the astronomical returns that Jim Simons\u2019 gets from his Renaissance Technologies hedge fund.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">In 2013, the Medallion Fund earned a 17.64% return.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">In 2014, the hedge fund made 14.53%.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">In 2015, the Medallion Fund generated a 17.37% return.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">2016 was an amazing year that netted a 21.46% return.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">In 2017, it brought in a 15.22% return.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">There was a huge hiccup in 2018 that led to an 8.5% return.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Even with 2018\u2019s poor performance, Renaissance Technologies got an average 15.78% return over six years. Compare that to the 12.25% return that the S&amp;P usually gets. You might think that 3.53% matters much. That small percentage adds up quickly, though, when investors keep their money in the Medallion Fund for years or decades.<\/span><\/p>\n<p><iframe loading=\"lazy\" style=\"margin: 0 auto; border: 0;\" src=\"https:\/\/financhill.com\/widget\/stock-score\/SPY\" width=\"720\" height=\"500\" frameborder=\"0\" scrolling=\"no\" seamless=\"\"><\/iframe><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">By choosing the Medallion Fund over the S&amp;P, someone investing $100,000 could earn an additional $41,469.28. <\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">The exponential growth that occurs when interest gets added to the investment every year makes a big difference over a few years. The longer the money stays in the hedge fund, the faster and bigger it grows from year to year.<\/span><\/p>\n<h2><span style=\"background-color: transparent; color: #0e101a;\">Jim Simons Is a Generous Philanthropist<\/span><\/h2>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Jim Simons and his wife Marilyn Hawrys Simons have devoted much of their money to philanthropic endeavors.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">The couple founded the\u00a0<\/span><a style=\"background-color: transparent; color: #4a6ee0;\" href=\"https:\/\/www.simonsfoundation.org\/\" target=\"_blank\" rel=\"noopener noreferrer\">Simons Foundation<\/a><span style=\"background-color: transparent; color: #0e101a;\">\u00a0in 1994 to provide money to programs focused on scientific research, education, and health. The foundation has been particularly generous to autism research. It even formed a separate branch called the Simons Foundation Autism Research Initiative (SFARI) to address the underlying genetic traits underlying the disorder.<\/span><\/p>\n<p><strong><span style=\"background-color: transparent; color: #0e101a;\">Simons formed\u00a0<\/span><a style=\"background-color: transparent; color: #4a6ee0;\" href=\"https:\/\/www.mathforamerica.org\/\" target=\"_blank\" rel=\"noopener noreferrer\">Math for America<\/a><\/strong><span style=\"background-color: transparent; color: #0e101a;\"><strong>\u00a0in 2004 with a $25 million donation from his foundation. Two years later, he doubled the donation to $50 million.<\/strong> <\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Math for America provides professional growth and enrichment opportunities for math teachers in the United States. Participants can take classes in a wide range of topics, including neuroscience and popular computer languages. Teachers can also lead classes that enrich their colleagues.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Other philanthropic causes from Jim Simons include:<\/span><\/p>\n<ul>\n<li><strong><span style=\"background-color: transparent; color: #0e101a;\">The\u00a0<\/span><a style=\"background-color: transparent; color: #4a6ee0;\" href=\"https:\/\/www.simonsfoundation.org\/flatiron\/\" target=\"_blank\" rel=\"noopener noreferrer\">Flatiron Institute<\/a><span style=\"background-color: transparent; color: #0e101a;\">, where scientists can advance their theories in astrophysics, mathematics, biology, and quantum physics.<\/span><\/strong><\/li>\n<li><strong><a style=\"background-color: transparent; color: #0e101a;\" href=\"https:\/\/avalonnaturepreserve.org\/\" target=\"_blank\" rel=\"noopener noreferrer\">Avalon Park<\/a><span style=\"background-color: transparent; color: #0e101a;\">, a 130-acre nature preserve dedicated to the memory of his son Paul.<\/span><\/strong><\/li>\n<li><strong><span style=\"background-color: transparent; color: #0e101a;\">Large donations to the <\/span><a style=\"background-color: transparent; color: #0e101a;\" href=\"http:\/\/www.nsi.edu.np\/en\" target=\"_blank\" rel=\"noopener noreferrer\">Nick Simons Institute<\/a><span style=\"background-color: transparent; color: #0e101a;\">, a Napalese healthcare foundation named after his son who drowned in 2003.<\/span><\/strong><\/li>\n<\/ul>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Simons has also given large donations to MIT\u2019s mathematics department, Stony Brook University, and other centers of higher learning.<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Jim Simons isn\u2019t the wealthiest man in the world. He\u2019s also not the most famous billionaire. There is, however, a good chance that he\u2019s the smartest person to become a millionaire. <\/span><\/p>\n<p><span style=\"background-color: transparent; color: #0e101a;\">Few people have reached his level of academic and professional accomplishments. Luckily, he\u2019s used his outrageous intelligence to build a financial empire that contributes to worthy causes around the world.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>You don\u2019t need to spend much time learning about investing before you encounter the name \u201cJim Simons.\u201d At first, you may wonder, why is Jim Simons famous? Sure, he has a solid reputation as an investor who has accumulated tremendous wealth. But that\u2019s true of many successful investors. Here&#8217;s the skinny on this extraordinary investor. [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":412348,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[22],"tags":[],"class_list":["post-412341","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/financhill.com\/blog\/wp-content\/uploads\/2020\/07\/why-is-jim-simons-famous.jpg","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9czeV-1JgF","_links":{"self":[{"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/posts\/412341","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/comments?post=412341"}],"version-history":[{"count":4,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/posts\/412341\/revisions"}],"predecessor-version":[{"id":416350,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/posts\/412341\/revisions\/416350"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/media\/412348"}],"wp:attachment":[{"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/media?parent=412341"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/categories?post=412341"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/tags?post=412341"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}