Learn From Jim Simons, Mathematics Specialist Who Successfully Breaks Wall Street
Jim Simons who has the full name James Harris Simons is a figure who is famous in the financial world because of his success breaking into Wall Street using quantum mathematical formulas.
Jim Simons is famous for his King Quantity and founded the most calculated Hedge Fund in the world. Jim Simons turned out to have worked at the National Security Agency (NSA) and also lectured at the Massachusetts Institute of Technology (MIT) and Harvard.
Jim Simons founded Renaissance Technologies in 1982 when he was 44 years old. He resigned in 2010, but even so he still has the power as head of non-executive at Renaissance Technologies.
Actually Jim Simons is a mathematician and owner of the Hedge Fund. The horrendous thing was that in 2008-2009, Renaissance Technologies made Wall Street a profit because it printed a very impressive trading portfolio in the middle of the financial crisis at that time.
Jim Simons profile
Jim Simons was born in Brooklyn, Massachusetts in 1938 and he really loved mathematics from childhood.
At the age of 14, he once worked as a shop cleaning officer and also worked as a stock boy or supply supervisor when he was a child.
In 1955, Simons was successfully accepted at MIT and majored in mathematics.After graduating, he continued his education at the University of California, Berkley by taking a doctorate which he completed at a very young age of 23 years. After that, Simons was appointed a lecturer in mathematics to teach at MIT and Harvard University.
In 1964, he was recruited by The Institutes for Defense Analysis (IDA), an institution that had a major role in his expertise as a mathematical code breaker.After working for 4 years there, Simons then decided to leave and later became chairman of the mathematics department at Stony Brook University.
As chair of the mathematics department, Simons helped to develop core formulas for mathematics and physics.
It was only in 1978, Simons began to spread its wings and began to explore finance and also helped Manometrics Hedge Fund. – Wall Street
Jim Simons Success Story Besides Breaking Wall Street
Although he has been successful in the field he likes and won an award as a mathematician and master code breaker for IDA. He was still bored with what he did, this was revealed in an interview where Simons said that his decision to study finance because he was getting tired.
He further explained that when he started trading, this was done because he was tired of mathematics. Where in his late 30s he still had little money. Only then he was interested in entering the world of trading and it turned out to run smoothly.He said that at first the money he earned in trading was just a fortune, because trading is not a mathematical model.
But after observing the available data, he began to realize that there was an orderly structure in the world of trading. Then he began hiring mathematicians and they began to make several models to be tested. They design the algorithm and then test it, the results are sometimes suitable and sometimes not suitable.
This team is named Hedge Fund Monemetrics which will become the forerunner of Renaissance Technologies. Jim Simons as a successful trader and entered the richest person in the world actually started the Hedge Fund from scratch.
The unique thing was that at that time he only employed science scientists such as mathematicians, physicists, and astronomers. There are no financial or economic experts in the team to grow their businesses.
The above can occur because Simons do not know how to hire someone to do fundamental trading. At that time he only employed a few people and from there some managed to get money and some did not.
On the other hand, Jim Simons really understands how to employ scientists because he has tastes in that field. That was what Jim Simons did, where the model he was designing was slowly improving over time.
Also Read : The Key To Be A Successful Trader Of Simons
In 1982, Jim Simons began to find loopholes in his efforts. He finally began to develop his trading business by forming the Hedge Fund into Renaissance Technologies.
IN 1988, Jim began using quantitative analysis as the only method for deciding on a market that was worth entering.
Renaissance Technologies initially only employed people with pure science, such as mathematicians, data analysts, programmers, physicists, and cryptographers.Jim Simons is able to expand his business rapidly by using fields that are his expertise, namely mathematics
As time goes by, Renaissance Technologies, known as the Hedge Fund that is fostered by science experts, began to be recognized for its extraordinary trading portfolio. Although they experienced a fall in 1989, they were able to rise from the problem.
In 1994, Jim Simons and his wife Marilyn Simons began to form a foundation called The Simons Foundation which aims to support research in science, education and health
Not only that, he also donated more than 1 billion USD to support research on autism. Jim Simons also founded Math of America which has the aim of increasing the role and skills of mathematics and science teachers.
These are 3 Keys to Successful Trading From Jim Simons
1. Hire a Science Expert
As we have explained above, Jim Simons founded Hedge Funds by not hiring people in economics and finance. This is done because he is aware that he is not a person who is an expert in the field and he is also optimistic that he is able to benefit through the exact knowledge he masters. Jim Simons also has the conclusion that the basis of financial science is mathematics.
2. Identify a Profitable Trading Strategy
The real strategy adopted by Renaissance Technologies to make money is a big secret that people don’t know. But when viewed from the educational background of people who work there, it is alleged that they use quantitative strategies in trading. Where analysts working there identify the market and analyze it thoroughly using a secret algorithm.
3. Never Share a Strategy with Others
The last tip given by Jim Simons is never to share strategies with others. Jim Simons is a very closed person, rarely shows on television, and also interviews in various media.
During Renaissance Technologies, no one knew for sure how the company made money.
Hopefully information about Wall Street can be useful and inspire you all.