The Man Who Solved the Market summary

After glittering academic achievements at MIT and Berkeley, Simons looked for a lecturing post.

At Berkeley, he’d completed his PhD in two years. It dealt with the geometry of multidimensional curved spaces. Its brilliance was enough to secure a teaching job at Harvard University.

While trying to crack codes at IDA, employees had a great deal of time on their hands. Simons used his productively – to research and to ponder the world of global finance.

Meanwhile, while still at IDA, his research into geometry began to pay dividends. He focussed on theoretical questions, rather than those with immediate practical utility. This was what might be called pure math, absorbing him for days in abstract reflection. His area of research was on something called “minimal varieties” – a highly complex subject that dealt with the question of surface area.

In 1968, after revealing to colleagues that he opposed the Vietnam War, Jim was fired from his code-breaking role at IDA.

Stunned, he looked for another job and soon returned to academia. He was appointed chairman of the math department at Stony Brook University, New York. But still, the world beyond the lecture hall beckoned. To the bafflement of many of his academic colleagues, at the age of forty, he left and founded Monemetrics, a hedge fund management firm. He wanted to find the hidden pattern in the markets. Also, he had to admit to himself, he wanted to be very rich. Unlike his academic colleagues, he was attracted to money.

Monemetrics was Simons’ first real venture into the world of finance. He began assembling a team of mathematicians around him and Baum, including old friends from college. After he’d convinced others to join him in this endeavor, he set up a hedge fund, where they’d manage their investments.

He named it “Nimroy.” This was an anagram of the Joseph Conrad novel Lord Jim and the Royal Bank of Bermuda, which handled the company’s money transfers for tax purposes (namely, avoiding them).

Fortunately, the early losses that Monemetrics incurred would soon be overturned. But first, they had to develop a far more accurate system to read movements in the markets.

While other investors were relying on old-fashioned intuition and business news for their predictions, Simons decided that he would feed data through computers – a technology that was thin on the ground in the early 1980s. Renaming Monemetrics “Renaissance Technologies,” he looked ahead onto a brave new world of investing.

As Renaissance expanded its investment activities it searched for more brainpower. One of these new recruits was a man named Robert Mercer, who’d been working for the computer giant IBM. He’d had great success at IBM, laying the groundwork for advances in speech-recognition technology.

A brilliant coder, he was exactly the kind of person that Renaissance were looking for. Mercer had spent his childhood and adolescence at a computer keyboard – or at least as much as he could during the 1960s and 70s. As a young man, he’d been particularly inspired by a meeting with Neil Armstrong, who’d come to give a talk to budding computer scientists at a youth science camp in the mountains of West Virginia.

The Medicis were a powerful banking family who determined the course of politics, art, and royal power in medieval Italy and beyond. It might be said, not without accuracy, that Jim Simons is something like a modern-day equivalent of a member of that dynasty. His achievements, when all is totted-up, are truly awe-inspiring.

First off, he’s the most successful trader in the history of modern finance.