Legendary Wall Street financier and mathematician Jim Simons passed away on Friday aged 86.
Simons, one of the richest men in the world with a net worth exceeding $30 billion, revolutionized investing in financial markets with his math and data-driven approach.
Before Simons’ lucrative investment career, he was a celebrated mathematician who published groundbreaking studies in string theory, quantum field theory and pattern recognition.
At age 40, he turned his genius-level IQ to building his wealth, beginning with a small trading office in Long Island that went on to generate more than $100 billion in trading profits over a 30-year period.
Legendary Wall Street financier and mathematician Jim Simons has passed away aged 86
Before turning his hand to investing, Simons was a celebrated mathematician who published groundbreaking studies in string theory, quantum field theory and pattern recognition
Simons’ largest hedge fund, Medallion, was the envy of Wall Street as it earned a 66 percent average annual return from 1988 to 2018 – overshadowing other prodigious investors such as Warren Buffett.
By bringing his algorithm-driven approach to the financial markets, Simons was credited with forever changing the way traders work.
Born in Brookline, Massachusetts in 1938, Simons was seen from an early age as a math prodigy, and achieved his doctorate by the age of 23.
He worked as a lecturer and researcher at Harvard University and MIT in his early career, while also employing his brains to cracking Soviet codes from 1964 for the Institute for Defense Analysis.
Simons was later fired for his outspoken opposition to the Vietnam War.
He continued to work in education for over a decade – while scooping prestigious math prizes along the way – before founding his first investment company in 1978.
The firm, Monemetrics, worked out of a shopping mall in Setauket, Long Island, and Simons had never so much as taken a financial trading course before starting, reports the New York Times.
While many in the financial world at the time Simons first started relied on business contacts and instinct to trade, he hired fellow mathematicians and scientists as he believed financial markets were like a math problem waiting to be solved.
‘I developed a view that markets are not random, and [were] to some extent predictable,’ he said in an interview with The Wall Street Journal. ‘There were statistical anomalies that could be exploited.’
Simons (right) pictured with President Biden and Stony Brook University President Samuel Stanley in April 2017
The investor, pictured with Martha Stewart in 2013, was one of the richest people in the world, and had a net worth exceeding $30 billion at the time of his death
Although he said that fundamental trading ‘gave me ulcers’ and made him ‘feel like a dope’, Simons focused his experience in mathematics to develop a trading algorithm that reaped huge rewards.
‘I want models that will make money while I sleep,’ he reportedly told a friend as he was developing his formula, which he described as ‘a pure system without humans interfering.’
He later renamed his firm Renaissance Technologies, of which Medallion was a branch, that went on to become one of the largest and most influential companies in America.
He retired as CEO in 2010, and the end of his career was marked by significant philanthropic efforts.