There are a vanishingly small number of people whose existence has changed Wall Street. One of them was Jim Simons, a former academic mathematician who brought trading closer to the world of theoretical physics — and then exploded the possibilities of how people could make, and lose, money. If he wasn’t history’s greatest trader, he was among a handful who could ever make that claim. On Friday, the Simons Foundation announced that he had died at the age of 86 in New York City.
Simons grew up as the son of a Boston shoe-factory executive, but his own career started at Harvard and the Massachusetts Institute of Technology, where he taught and studied mathematics and geometry. He would eventually work as a Cold War–era code breaker but left government over his opposition to the Vietnam War. In 1978, he founded Renaissance Technologies, his hedge fund, out of a Long Island strip mall. His theory, new at the time, was that patterns existed in the ways stocks and commodities moved — and that computers could be used to predict those patterns to extraordinary effect. “I want models that will make money while I sleep,” Simons once told a friend, according to The Wall Street Journal. “A pure system without humans interfering.”
Amazingly, he got it. Renaissance made about $100 billion in gains between 1988 and 2018 — an astonishing average of 66 percent a year, according to the Journal. Its Medallion Fund, which has been open only to employees, minted several billionaires. Renaissance was largely made up of mathematicians like Simons as well as physicists and other scientists. While that’s fairly commonplace among sophisticated hedge funds today, it truly revolutionized how money could be made in trading. Simons went on to be a major philanthropist and a contributor to the Democratic Party, donating more than $100 million since 2005, Bloomberg reported.
On Friday, after his death was announced, some of Wall Street’s biggest names mourned his death.
Simons was part of a class of finance titans who transformed Wall Street in the latter part of the previous century but whose ranks are now thinning. Others in that group who have recently passed away include John C. Bogle, who popularized passive investing; Charlie Munger, who helped Warren Buffett build Berkshire Hathaway; and hedge-fund godfather Julian Robertson.
