The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution

By Gregory Zuckerman

NEW YORK TIMES BESTSELLER

Shortlisted for the Financial Times/McKinsey Business Book of the Year Award

The unbelievable story of a secretive mathematician who pioneered the era of the algorithm–and made $23 billion doing it.

The greatest money maker in modern financial history, no other investor–Warren Buffett, Peter Lynch, Ray Dalio, Steve Cohen, or George Soros–has touched Jim Simons’ record. Since 1988, Renaissance’s signature Medallion fund has generated average annual returns of 66 percent. The firm has earned profits of more than $100 billion, and upon his passing, Simons left a legacy of investors who use his mathematical, computer-oriented approach to trading and building wealth.

Drawing on unprecedented access to Simons and dozens of current and former employees, Zuckerman, a veteran Wall Street Journal investigative reporter, tells the gripping story of how a world-class mathematician and former code breaker mastered the market. Simons pioneered a data-driven, algorithmic approach that’s swept the world.

As Renaissance became a market force, its executives began influencing the world beyond finance. Simons became a major figure in scientific research, education, and liberal politics. Senior executive Robert Mercer is more responsible than anyone else for the Trump presidency, placing Steve Bannon in the campaign and funding Trump’s victorious 2016 effort. Mercer also impacted the campaign behind Brexit.

The Man Who Solved the Market is a portrait of a modern-day Midas who remade markets in his own image, but failed to anticipate how his success would impact his firm and his country. It’s also a story of what Simons’s revolution will mean for the rest of us long after his death in 2024.

• Language: English
• Publisher: Penguin Group
• Release date: Nov 5, 2019
• ISBN: 9780735217997

Reviews for The Man Who Solved the Market

[mpultroon · Rating: 4 out of 5 stars]

Eminently readable, relatively neutral. Would have liked to see more math coverage; could have been through optional footnotes or, better yet, appendices.

[jcvogan1 · Rating: 4 out of 5 stars]

Serviceable biography, as far as I know. No real great insight into anything, but interesting given the personalities and the industry.

[breic-1 · Rating: 3 out of 5 stars]

Fairly shallow overview of the Renaissance hedge fund company, especially on founder Jim Simons. There are a few obvious inaccuracies, but it seems to get the big picture right. The book is fairly balanced: on the one hand the company has made a few billionaires and given some NYC math teachers $15K bonuses, while on the other hand it has boosted white supremacy, supported climate denialism and been key to Trump's election. I was surprised to learn how little competition the firm faced at least initially, just DE Shaw and LTCM; it really is a small world.

[willszal-1 · Rating: 3 out of 5 stars]

You my have heard of the investing term "quant" before. It refers to a person or investing process that is "quantitive," or focused on algorithms and pattern recognition as opposed to traditional investing. The most famous and profitable quant firm is Renaissance Technologies, founded by mathematician Jim Simons. This book tracks Simons' life and career.I picked up this title because I wanted to learn more about quant investing—something I've been hearing about for years but not something I've ever carefully researched. I felt like this book served as a decent non-technical introduction.The basic approach of quant investing is to do statistical analysis of a massive set of data. Because short-term trends have more data points to work with, it is easier to come out ahead in short-term trades. Quant funds look to do high volumes of trades and come out ahead a very small percentage of this time. Like many other modern funds, this makes them reliant on high degrees of leverage to get a good return on capital.There is something fascinating about the investing approach that emerged out of Renaissance's work—they dodn't have stories about why most of their investment strategies work. Zuckerman quotes statistician George Box; "all models are wrong, but some are useful." We're constantly seeking out stories about why the world is the way it is. Although we can derive meaning from these stories, when it comes to something as complex as investing, it is often more limiting than useful to rely on stories for why things do or don't work. It is the sort of approach that would only emerge in a fund staffed by scientists and mathematicians.For many years, Renaissance hasn't allowed any outside investors in its flagship fund, Medallion; it is all money from employees (the fund is limited to $10 billion, and even with massive fees of 5% of principle and 40% of returns, it regularly needs to return investor funds). Often times hedge funds are considered to epitomize what is wrong with the financial system. The fact that Renaissance's most profitable fund doesn't even allow outsiders (who would need to be phenomenally wealthy to participate in the first place), highlights the madness of the current state of wealth inequality in the world.The end of the book explores the ironic political dimensions of Renaissance. Jim Simons is a Democrat, and was one of Hillary Clinton’s largest campaign donors in 2016. At this point in the company’s evolution, Simons had stepped down from the CEO role, and one of the new Co-CEOs was Bob Mercer. Mercer just happens to have been Trump’s largest donor in the 2016 cycle, and also was an investor in Breitbart and Cambridge Analytica, along with his daughter Rebekah. More than anything else, this highlights that both the Republican and Democratic parties represent the shared whims of the neoliberal elite rather than some significant portion of the populace.The book is an interesting portrait of one of the most influential financiers of the past generation. That said, it fails to rise to the bar set by books like “Barbarian’s at the Gate” by Bryan Burrough in that the book lacks a compelling narrative arc.

[knightlight777 · Rating: 3 out of 5 stars]

This was an audiobook for me. The story was rather incredible especially considering some of the participants and the quite scientific approach they took, so different from traditional financial circles. But then again there in probably lies the answer to how the market was "solved." There is no doubt they were and seem to continue to be successful in pulling numbers from the market, but the roller coaster ride always seemed to put them on the precipice of disaster.The book itself was enjoyable as the suspense and personalities involved in the drama of tackling the financial markets from a different strategy kept me interested in discovering the next turn. Almost like a real crime mystery book. The quants did seem to prevail and of course we still don't know exactly how they did it as the book does not really go there. It winds up with the creator of the funds Jim Simon seemingly sailing off into the sunset as he approaches his 90's, a chain smoker at that! I found it amusing how he portrays this liberal bent of lets make everyone pays their fair share for the good of the down trodden. Yet they really didn't as the exploited every loophole they could to keep those riches in their own pockets. And well lived lives of luxury beyond luxury on the spoils of their gains.

[gottfried_leibniz-1 · Rating: 4 out of 5 stars]

An Excellent Biography, I enjoyed reading political factions within a company. It seems that it can be applied everywhere.

I would recommend this to people who are interested in Biographies, Investment, Wall-Street.

Deus Vult,
Gottfried