Every time I heard Jim Simon’s explain Renaissance’s methods, and how that led to its insane returns, my bullsh!t meter went off. Completely unfair. He’s brilliant. I admire the guy. And, yet…

I have had the same thought for a long time. Statistically impossible returns over 30 years obfuscated behind hand wavey "super math genius stuff you wouldn't understand". I think a lot of finance operates under this model. Manufactured complexity to hide insider trading/institutional capture/technology edge etc. Maybe it really all was legit, but suspicious nonetheless

Renaissance was always a secret government organization that focused on new physics similar to the Manhattan project without as urgent of a goal.

Its a front to study alien technology.

They are spoofers… gaming the market. It should be illegal, but it’s not so carry on.

I feel this way about Ray Dalio

Me too. Though his returns weren’t particularly amazing, so at least that made sense.

Right. He did manage to get massive AUM, which I guess just comes from being a great salesman.

Renaissance, like all the very best advantage gamblers (see Ranogajec and Walsh) build themselves into a position where they are such big players that they negotiate down trading fees with brokers to the point where they may even get rebates rather than fees for trading. If you or I did exactly what Renaissance did, we would lose money. Their entire edge is in the reduced fees/rebates

The reason your bullshit meter went off is because he wasn’t actually saying anything meaningful regarding their methods/strategy. In fact, in the way that Steve Jobs left the “Apple TV” Easter egg in the Isaacson book, Simons began spouting off more frequent nothingness as he knew he was ending. Why would he give up any *real secret sauce. It would be like trashing his own legacy. I wouldn’t be surprised if maybe some of what he said was relevant in the very early days of RenTech but had long been arb’d away.

And, fwiw, I am absolutely a fan.

The solution is for AI to eliminate humans.

Comforting

I do t believe this, but it would be genius to have a fake internal strategy with absurd returns that lets you attract a ton of capital to any external strategy you launch.

Yet, what??

Something about it never quite makes sense to me. It’s my own shortcoming.

Could be true that Reneissance were cheating the whole time. It's not impossible. .

RenTech is sus af

It was really tuned up market-making / liquidity provision at scale with great hardware and software. It was engineering more than science. Execution more rather than mystery sauce, although there was surely some of that.

I thought the rumour was that Renaissance had connections and data from the intelligence community?

Yes, that’s always been a rumor lurking in the background…

Why do you expect any one in Jim's position to give away his alpha? It is like most successful leaders repeating "follow your passion" because it is acceptable answer and the one to garner least resistance.

So what’s your theory?? So tantalizing

He’s been dead for years.

Hustler

One of the most pointless tweets I’ve ever come across.

Thank you.