Here's an MIT World video that captured my attention titled, "Mathematics, Common Sense, and Good Luck: My Life and Careers."
Don’t expect to glean any market tips or trading secrets from James Simons, who steadfastly refuses to disclose the method behind his remarkable record in investing. Instead, listen to this mathematician, hedge fund manager and philanthropist sum up a remarkably varied and rich career, and offer some “guiding principles” distilled along the way.
Simons drew a bead on studying math at MIT from an early age, which some acquaintances found surprising. As a 14-year-old, he was demoted in a temporary job from stockroom worker to floor-sweeper, because he “couldn’t remember where in hell everything went.” This switch suited him fine, since he had “lots of time to think.” When he told his employers he hoped to attend MIT, “they thought it was the funniest thing.” Ultimately, Simons had no choice about it: After Wesleyan recruited, then rejected him, there was only MIT. “I was destined for this place,” he says.
The idea of a math career was “clinched” for Simons after a typical late night of poker and sandwiches with MIT classmates. At 1 a.m. in a Brookline restaurant, Simons saw MIT math legends Isadore Singer and Warren Ambrose “doing math over coffee and cigarettes,” which he “thought was the coolest thing.” After a motor scooter trip to Bogota with Colombian friends -- in whose business he fatefully invested -- Simons leapt into the math phase of his career, writing a famous Ph.D. thesis, teaching at MIT, solving prickly geometry problems and helping build bridges between math and physics. During this phase, he managed to get fired as a cryptanalyst at a Defense Department think tank, after criticizing the pro-Vietnam War stance of his boss, General Maxwell Taylor.
While at Stony Brook’s math department, Simons “got really stuck, very frustrated,” trying “to prove a certain number was irrational.” Meanwhile, he had begun investing dividends generated by his South American business venture and “found out I was not bad at it.” In 1978 at age 38, with 20 years behind him as a mathematician, he concluded it was time for a change. He began an investment business, Renaissance Technologies, that deployed sophisticated, proprietary models to generate astonishing returns (and business envy) over many years. “We have a lot of smart guys,” he comments.
Simons says he is “always doing something new,” and doesn’t like to run with the pack. This approach, which he recommends, “gives you a chance.” Some other parting tips: collaborate with the best people you possibly can; try at problems “for a hell of a long time;” be guided by beauty; and “hope for some good luck.”
About the speaker:
James H. Simons is also Board Chair of Renaissance Technologies LLC, a highly quantitative investment firm from which he retired in 2009 after many years as CEO. Previously, Simons was chairman and professor of the Mathematics Department at the State University of New York at Stony Brook.
Earlier in his career he was a cryptanalyst at the Institute of Defense Analyses in Princeton, and taught mathematics at the Massachusetts Institute of Technology and Harvard University.
Simons holds a B.S. in mathematics from MIT and a Ph.D. in mathematics from the University of California at Berkeley. His scientific research was in the area of geometry and topology. He received the American Mathematical Society Veblen Prize in Geometry in 1975 for work that involved a recasting of the subject of area minimizing multi-dimensional surfaces. A consequence was the settling of two classical questions, the Bernstein Conjecture and the Plateau Problem. Simons' most influential research involved the discovery and application of certain geometric measurements, now called the Chern-Simons Invariants, which have wide use, particularly in theoretical physics.
Simons serves as Trustee of Brookhaven National Laboratory, the Institute for Advanced Study, Rockefeller University and the Mathematical Sciences Research Institute in Berkeley. He is also a member of the Board of the MIT Corporation and Chair Emeritus of the Stony Brook Foundation. Together with his wife, Marilyn, Simons manages the Simons Foundation, a charitable organization primarily devoted to scientific research. The Foundation’s philanthropic activities include a major research initiative on the causes of autism and the recent establishment of an institute for research in mathematics and theoretical physics.