Billionaire James Simons: Conquering Wall Street with Mathematics

Welcome to the Welcome to this evening Main Event only event And so this will be This is part of you know of the American mathematical society meeting How’s the Western section That’s taken care of that’s taking place on campus this weekend And it’s also part phone The Bay Area Science Festival Endite School sponsored by the American met Society Newberry Essence Festival end Mathematical science research institute in Berkeley And I’m just going to introduce the introducer I’m the Hi Michelle happy Tuesday associate secretary and short of this meeting Can I introduce her tonight Is David Eisenberg who is the former president of the American Muscle Medical Society And currently Rector of the msri McMichael science research institute in Berkeley My great pleasure tonight to introduce Jim Simons Deer and now old friend He’s going to talk about luck and I want to talk about luck Two and I’ll start with a Asura personal story My father Leonard eisenbud was a physicist Enjoin the physics department Stony Brook in 1957 just one year after it started Stony Brook is a great place now But it has growing pains and it one point The math department was in such terrible shape Did the Provo sell he needed to have a committee of Outsiders to find a new chair and let no one in the department Never would do So they went searching for an outside chair Where is people applied And my father was on the committee that Was to make the choice And they made some pretty questionable choices Among the most inexperienced the young guy Jim Simons never done any ministration before and really Was too young for the job And they interviewed the candidates and Of The provos do I need to view Jim Courtney the gym Said you know of all the people I’ve interviewed you were the only one who actually seems to want the job When did indeed nobody else took the job and Jim did Talk about luck for Stony Brook I feel I’ve been touched by that look too and getting to know Jim PhD from Berkeley and 1958 with Bertram custon whom I saw in the audience a moment ago Where is where is bertram kostant Somewhere around No she left again 61 Does your your Wikipedia entries Fish He was the winner of the AMS veblen prize in 1976 is that the right thing He discovered the minimum manifolds Can have singularities Starting to mention seven Not such an obvious Construction No very famous for Troon Simon’s Theory which is applied in math and physics and all kinds of Unexpected ways In 1982 the change of life He founded Renaissance Technologies and In some sense the Amazing chapter really even more amazing chapter started then He Did nothing but use meth And a lot of talent people’s work Two How to become one of the richest men on Earth And is now been sharing his Wealth and his luck With the rest of us who are here And I will all share the lucky again and listening to Jim himself Gym This is a high thing okay I guess you can hear me thank you very much for Such a nice introduction Joe I’m going to Kind of talk about My life and its various peregrinations Travel about math and some of it about Common sense And some of it about good luck And then I’ll take some questions If there are if there are any Joe Joy I always liked math When I was little kid I didn’t Think of it as math just numbers and And having fun I But I Discovered xenos with it so this is proof of my Thoughtfulness as a child how I discovered Zeno’s Paradox at about 4 years old not knowing it was Anybody’s Paradox or not knowing what the word paradox meant But I learned from my father to my heart Not a car could run out of gasoline Can I set Well Should run out You could do is half of what you have and then you could use half of that then you could do is half of that you’ll never run out Panda I did it didn’t occur to me that you never got anywhere either but on the other hand On the other hand Chow My Family doctor Dr Kaplan He knew I was a bright boy and he said well you know right Jewish boy You should be a doctor you know that’s a great that’s a great field and I Wanted nothing less than to be a doctor And I said what I don’t really want to Doctor you know I want to do something like with engineering or math or something I didn’t know much I was about eight years old I said well you know you can’t make any money doing that stuff and I said And I you know it didn’t it I didn’t seem to be very much of an impediment at eight years old I wasn’t thinking about Making a lot of money I was just thinking that I did not want to be a doctor Which was a very good choice for me and it turns out for anyone who would have had the unfortunate news To be my patience cuz I would not Have done a very good job But I did like working and if my First job Was as a stock boy In Breck’s Garden Supply During the Christmas season They hired kids The few people and I got this job Stock boy Works down in the basement in this particular place Looking in a bring stuff up to the floor and putting stuff away But I was not a good stock boy because I could never remember where anything went that seem to be no Rhyme or Reason no water that wasn’t alphabetize or anything like that you just had a know where things were so The two people who ran it down there realized I was a failure As a stock boy but I was there so they said okay You can sweep the floor And I love that job so that I had A big push broom and sawdust and I could throw the sawdust on the floor and push the broom and walk up and down Keeping the floors clean and thinking which I enjoy to do You’re doing very much on it and I came to the end and Christmas was passed and there was time for me to leave Show this couple sat me down and said goodbye and sewing and asked me what I was going to do I was I think 14 And I said all I’m going to study mathematics I think I want to go to MIT Well they laugh very very hard and And I’m sure they were thinking this kid doesn’t even know whether dried sheep manure is at Is going to go to MIT and study mathematics I did I never got back to him and said see I did that but I did and I want to a mighty and end this study Mathematics and Realize that though you know one could be A mathematician But I really had an epiphany When I learned Stokes theorem no I guess you’re all math petition so you probably know Stokes their army integrate one thing over a boundary in your take is differential and you That’s the same as integrating that over the interior something and not You know it’s a great generalization of the fundamental theorem of calculus and Orcs And all dimensions And I thought it was The most beautiful thing Dr Manda And it really made me Appreciate Mathematics it made me want to become going to this field of differential geometry which I had Gradually learned existed NAA What seal the deal What’s a delicatessen Call Jack and Marion’s in Boston It’s not there anymore I’m afraid but it was quite a place and it was open very late at night and is Undergraduate we used to go there and hang out And eat Maybe at 2 in the morning cuz you got Young Young kids can eat at all hours us Some of you perhaps remember And butt Frequently Is singer and Warren Ambrose I guess everyone’s heard of the singer Ambrose wasn’t Older fellow he must have been fifty he seemed anxious to me although he was A great A teacher they would show up there And I work and I go over to some boat and drink coffee and Do mathematics I thought my God you know What a great life going to hear these Grant grown-ups you know and and that they’re doing the stuff they wouldn’t dress and Suits they just had Regular outdoor closed-end Said what what a life this is it 2 in the morning Over sandwiches talking about Matt so It was clear that that was the That was for me I graduated MIT I Graduated early but I stayed one more year graduate school But when I graduated witches 1958 see that’s where the 58 came from where was David he confused Those dates 58 I did something that Was actually An example of Having no common sense at all But it turned out that there was some good luck involved And those days motor scooters had just been Becoming popular you know Vespas and their Italian it was either a Vespa or a lambretta those one The two choices you had And out We decided I Anna Friend from Colombia South America that are Mighty front Was not a mathematician We decided to ride Motor scooters Will get motivated have them we didn’t even know how to How to ride motor scooters buddy filled it felt it couldn’t be that difficult We’re going to ride them from Boston De Buenos AIRES Yeah well boss they both begin with B you know Boston to Buenos Aires And we got the Motor scooters on a 3rd guy join the Gang And we We did get half way we’ve got to Bogota And that took seven weeks and I at least almost died I came extremely close to death I think I never told my mother that If my mother had the slightest idea of how dangerous that trip was she wouldn’t let me go but For some reason she did And So I got there now one of the themes of this talk is how important Partners are And people that you work with and so this fellow This Colombian boy And and his Friend Subsequently became my first Partners in a business venture which out which I’ll get to in a minute but Joe was It was lucky on that account But it’s Show little Signs of Common Sense Anyway I spent one year at MIT as a graduate student I thought I’d been at MIT long enough That I should go to Berkeley and meat turn the great geometer of the day And got a A proper education differential geometry since that’s what I So I went there and I got a nice Fellowship I went to Berkeley The only thing is it The churn did not go to Berkeley that your train was coming to Berkeley that year that’s why They said I should go there too Butchering perhaps knowing I was coming decided to go somewhere else for that Yeah I guess he was on sabbatical or something So I didn’t I didn’t see churn But I work with the cost and someone told me Bird costume was here Is he here No he’s not here I think Maybe you didn’t really see him But anyway I work with the neighbor talks about the first thing that I did When I got to Berkeley are very early Was well I got married Actually I got married Weather in a month of Getting there Add that was a wedding and we even got wedding presents so which would Cash so I had I thought we had some money And I thought well it’s just lying there we should invest it I didn’t know anything at all about investing but I knew that One could invest money So I went to Merrill Lynch And I was feeling now I was 21 years old And said I want to open an account and that would two stocks that I thought would be just terrific I want to buy these stocks Well I said okay and I bought the Stockton But I’m an impatient guy and after a month nothing happened they didn’t go down they didn’t go up they didn’t go anywhere so I was bored With that Sing So I went back and said well You know something that’s a little more lively that I could you know You have any ideas at all yeah I said the soybeans you should buy soy being so high I Had heard of soy beans I’ve never eaten one myself Tell if it turns out props most people haven’t ever Eating a sleeping but pigs eat them in great quantities Pausing song But I said well what does that mean exactly he’s a well you because giving you bye 5000 bushels that’s a contract is a Futures Market Iguys tallest Soybeans are gone Make a lot of money So I bought two contracts or soy beans And they did they went off I was making money they went down I was losing money I bet Solved seldom both I got nervous that I bought one contract I was going back and forth From Berkeley to San Francisco Early in the morning to watch the soybean Market And I got off early Was 8 in the morning already I was out I mean that was very early for a graduate student And And after a couple weeks I came to the most sensible conclusion Of my life I think I said I’m either going to write a thesis or trade soybeans could you couldn’t possibly do both And I Came to that realization at a good point I had a Very small profit Okay I’m closing up the prophet And I was years before I have a trailer to show being again although the occasion did arise Joe Then I went and worked on I couldn’t do but you couldn’t write a thesis And trade soybeans anyway I could Show Georgia driver’s test said it was very gratifying Experience I wrote it I’m sorry Bert’s not here But So I got some results Which I show to my professor They said all those are very interesting that’s nice Joe suggest that A question that’s open About Homeland on me groups anyone know what whole anomie group is probably login Anyway Yes okay so anyway it’s A group is associated to a connection on a on a manifold What’s on the tangent bundle you Compare all translate all around and come back to where you started on your move the tension space And it Was had just been shown All the possible and that’s Ali group Strike Group of linear transformation It has recently been shown That there was a list of all the possible candidates Fallin lyrics On an irreducible manifold one you couldn’t write as a product of two other remaining amount of false And that list Happen to include only groups that were transitive on the unit Spears everyone loves groups You would take any point on the sphere in the tangent space and bring it to Any other point so it would it would it was Transitive And so that was kind of a question will Why are they all transitive on on the spear And I said oh I had I want to Try that profit You don’t do that he said that’s very hard problem You know what’s up Braille tried it he couldn’t figure out So that was just like throwing gasoline on the fire this And by some miracle I did so that was a good thesis I was very pleased I’ve had some interactions with sing along the way cuz he was interested in that problem and We talked about a little bit Roach to each other And Sheldon Play I finished at and they hired me and I went to Mi Amour instructor But Location hours of instructor Nmit butt I still had this Shut up I don’t know urge to do something different and When I had been in Columbia on my motor scooter trip when we got the ball guitar and I saw Colombian my friend I was very exciting country could do anything there it seemed all kinds of things that could be Action one thing or another And I had this friend down there who’s very small talk to friends and I said you know you guys are to start a business And I said well I don’t know if I’m going to come down to Columbia and I won’t leave Until we find a business And not that I Had any money particularly to invest in this business how it turned out I did have a little bit And I stayed at two weeks we found a business They said they were going to that we going to do it the father of one of them Put up half the money I said okay great and my father and I put up a little bit of money And Then I went back to A mighty After those two weeks and of course it took a little while for all that to Mana Check Place I decided after that first year You’re all this is so exciting I’m I’m going to move to Columbia And work In this fat This place Another nutty idea and I took a job in the interim cuz that place wasn’t ready in fact wouldn’t have been ready for another 2 years or year-and-a-half Engineering place while some engineering Company so I quit the more struck the ship and my job was to Computers were just coming at my job was to calculate Bessel functions on a computer now I didn’t know what a Bessel function was at that time of though I certainly learned what it was they made antennas and they I needed Anyway was the most hideous horrible thing one could do was just calculate Bessel functions all day long So I began to really miss Academia I was friends with bottle with singer these Tyson So I set the singer you know I think I made a mistake and he said oh well Will put you on box contract bought was a great mathematician at Harvard in those days you had an NSF contract they were Very loose you could just Hire someone on the car I want to buy Watch contract And Add alarm went back and said okay I’ll let those boys run the factory I’ll I’ll I’ll just be oh Minority investor in I work at math night which I did I was working Honest David I mentioned minimal minimal varieties a minimum varieties are Manifolds that are have minimal area or volume depending on the dimension with respect to their boundaries Self soap bubble is available Variety in two dimensions of typical Frame a divot in soap you’ll get a film that’s going to minimize area And so I was studying that subject Kyla from first principles Almost all the work had been very The analysis But I was trying to understand it the geometry of of these things and end Was working slowly in Going along They hired me at Harvard to be Sister Professor showers at Harvard for a full two years once on Bots contract and once an assistant professor But I actually didn’t like her but I don’t know there was something of any Harvard men or women here today probably Yes there is some well maybe With you there I’d have liked it better But I don’t even know you But but I don’t know it was stodgy place and And also love that started the factory so I Felt I needed a change so I went There’s a place in Princeton that still going strong Call The Institute for defense analyses Arts a branch of the institute for defense analyses in there they would hire math Rotation and there was super secret it was a very highly classified place They worked on secret codes and ciphers in fact in those days you weren’t even allowed to say what they worked on so we just stuff But now it’s permissible to say that’s what they worked on And it was it was I didn’t know anything about codes and ciphers but I knew they paid a lot And you can spend half your time doing mathematics And as much as happy any other half you had to work on their stuff That sounded pretty good so we move to Princeton And well I love that job I loved everything about it I learned about computers I learned to First that I do not Would never know how to program a computer with any skill whatsoever But there were fortunately people who could I learned I like to make algorithms and think about test Sting things out on a computer Have you can crack this called with this Al Gore the most of the time it didn’t work Sometimes it did It was kind of exciting And I like the people and I Was still walking away Had minimal varieties And After Maybe tour Two years there are baby after my third year I saw this The famous problem in the subject of minimum varieties which At is David said I showed that you could Filling smoothly This is an codimension one in euclidean space so you and you’re quitting in space you have Of a boundary of one dimension lower and you want to Two Dimensions lower like a curve in three space without And you want to fill in And I proved that you could do that Smoothly Without without you know NTV weather Singularities True ambient dimension 7 So up to 6 dimensional surfaces in 7 dimensional Space Weather 5 dimensional boundary I guess It would work you could do it are uniform proof but in one dimension more My proof broke down and I suggested a counterexample Which turned out and I couldn’t prove it was a Couldn’t prove it was a counterexample it was locally stable but it might not have been globally stable. So it’s a beautiful thing you take The three sphere And you cross it with itself now you got 6 dimensional Mustang Sitting in In actual the 7 dimensional sphere in a space anyway that’s the boundary 6 dimensional boundary The cone on that which I busy since it’s a cone Clearly has a vertex in a singularity but that does minimize Volume 6 Tramadol shopping to Metro Volume + And then Child So that was a good Resolving publishes paper which was Everything I knew about minimum rise Search patents Viper but it was a It was a good paper and saw that was Of Very nice and What’s the David said I won the Belmont prize and that’s I guess what I what I wanted for some 2 years later And I was also doing good work for them it was great but it was the Vietnam War time You remember You won’t know about the Vietnam War and some of you Probably live through it And so Now we didn’t do any work that had anything to do with the Vietnam War as far as I knew although in fact God no Knows what they did with what we did cuz I never read any of the secret messages cuz we didn’t Have access to that stuff we just Try to crack the codes But but I didn’t like the war now Cho The boss of my boss was in Washington DC and he was a general named Maxwell Taylor Some of you probably remember Old Maxwell Taylor And he was had been a general now he been kicked upstairs he ran the institute for defense analyses And he wrote an article for the New York Times it was an Cover story in the magazine section of Sunday paper Power doing so great in Vietnam we’re going to win the war it’s very important Joseph let’s just hold still it’s a terrific country Well I mean I didn’t Think so And But I’m sure there were others who doesn’t think so But I wrote a letter to the time saying not everyone who works for General Taylor shares his views In fact I think the whole thing is stupid and I mean Loard’s what classier than that but But that was the effect of the letter and they publish that letter Eagle II I’m sure Because you know No one said anything Hear anything from my superiors I heard Money for my friends But okay But then a few months later A young guy came and sought me out he told me he was a reporter For Newsweek magazine I think it still exists but in these those days it was the One of the two big News weekly stat on Time magazine’s you’re doing a story Newsweek magazine On people who work for the defense department who are opposed to the war How do you say I don’t have many takers because But I wonder if you would I could interview you No I was 29 years old no one had ever asked me For an interview before And I thought out your course you’re going to be up So interviewed me And you’re not so the bottom line was I said well The rule is you have to spend half your time of desktop and you can spend happy time of Y Your own stuff and my algorithm Now is but I’m spending all my time on mathematics And when the war’s over I’ll spend an equal amount of all my time if their stuff so I’ll make it all up and see that’s that’s what I’m That’s what I’m doing yeah hahaha because And it wasn’t even quite true but it was close to being true anyway Then I did the only intelligent thing I had done that day I told my boss that I gave his interview it would it even more intelligent but I told him Before I Go Save the interview But I didn’t I told him after we just you did he said what what did you say I said well I told her about my half and half proposition Is all I got I have to call Taylor His boss he called Taylor My memory is a little faint On this point but I think he may have called him in my presence and maybe I had to leave the room but it seemed like only a A microsecond Before He told me you’re fired And I said well I said you know My title is permanent member of the A permanent member this outfit I can He said well Who used to be a temp right now should I tell you the difference between a temporary member and a criminal member is it a temporary member Has a contract 4minute member So I didn’t have a leg to stand on They may have given me a A week sober and try to remember what the deal was But they will probably more generous tonight anyway there I was I didn’t have a job I had to Wife three kids Yeah and no job but I wasn’t you know I’d approve this damn I know I could get an academic job And so I wasn’t too Terrified at the prospect was all kind of exhilarating actually Being fired I think it’s good once I you shouldn’t make a habit of it they should we shouldn’t make a habit of being fired but once is Raps Salutary Anyway I did get this David said This offer at Stony Brook to be chair and I thought that would That would really be fun as I’ve Said before I thought it would be better to be the fire Roar than the fiery And the department was not strong They had a great physics department at that I was a very new University and I had a wonderful time Building a department and and I met Frank Yang the famous physicist who was who was there and we became friends and We had an interesting interaction is so he would After a few months he invited me up to his office he was going to tell me what he was doing I didn’t know any physic Next but he was Arrow Nobel prize-winning Great man and I figured I’d go up Got a lecture And so I sat down and he told me what he was doing it covered the board with equations write and understand that God damn thing I didn’t Understand anything Benoni physics butt You know I looked and I looked try to look as intelligent as possible I thank you very much at the end and I went Back downstairs it we repeated the same thing in your two And then again and yes 3 but something happened in the middle of the lecture of your three Got it kind of shown me the same equations that we’re getting Familiar and then I realized I said stop stop right there Picture why should I see cars You’re trying to invent mathematics that’s was done 30 or 40 years ago What what he was doing Was In in Gauge Theory you use bundles and they have connections But I think he didn’t know but you could also have That was such a thing as parallel transporting and Hauling on me group and all that stuff and he was Torturously trying to create power translation In a bundle with a connection I said you know the mathematicians have done that he should lie Would they have ever done that why would Why would I Study that kind of stuff and I said well it was beautiful natural and it just came out anyway how can I answer that Accepted They just Came out of mathematics so That was a The great moment because He said okay so we had a 7 he organized the seminar of the members of The Institute for theoretical physics It was kind of a translation summer I said we say this you say that kind of thing and end He even wrote a glossary you even wrote some kind of book with all these These things but it was Was the smartest group of students I ever had it was not his whole faculty so I was But it was great and they gave me at the end of very thick dictionary cuz I’m a terrible speller they gave me one of these things Is it 100 lb you know and As a as a gift As a gift for that show in the meantime I was doing Geometry myself And I started working With the churn We have become He came in the second year and what I was at Berkeley having missed the first year but we became friends We didn’t do any any Science together but we became And And I had Well it’s Donnybrook come up with some So drama treant in three dimensions that look quite interesting I showed it to him I said all we can do this at all Dimensions this is very exciting it’s always so we work together And developed in wrote a paper in that was The roots of these turn Simonson variant switch That have seemed to Be used in a lot of places witches You know what example I mean here we did this man And We didn’t Thank you all it’s going to apply to This out of the other thing I do without maybe a little apply you know maybe how the mathematically built 200 as I suppose it was But The idea that it would find its way into physics 10 years later and and become quite ubiquitous I mean it’s in Condensed matter physics in high energy physics it’s in cosmology Return Simon’s term And You know I don’t know what to doing with it I don’t have the faintest idea but Mathematics that way and basic science is that what you do a piece of basic science And you don’t know where it’s going to go but if it’s pretty good science it it can Slate the surprising Surprising place I mean When Maxwell developed the Maxwell equations did television occur to him as a As a consequence I don’t I just wanted to know how the hell are these How’s this work and Obviously figured it out So I was doing mathematics What churn and then with a guy named Jeff cheater I grew out of that with the something called differential characters which now Is What time do the route of subject called differential call Knology Have you ever heard of that And we got we worked on that and it led to questions that neither of us could Figure out about Rational numbers are certain volumes with a rational or irrational We really wanted to figure it out we couldn’t Spawn a couple years Struggling with those questions I won’t take away they where they came from but in the meantime My investment in Colombia Paid off Chow Part of the company was sold I had a few bucks my father had more but we we we We had some money And My Colombian friends God knows why I said okay we have this money We want you to invest it for us No Where they got the idea that I would Be any better at investing for them The net broker at Merrill Lynch years ago I don’t know But I said fine I’ll do that And and I had a friend Who had been a mathematician and was now a commodity Trader And he seem to be doing pretty well Dry said Charlie We have this money Would you manage it Course I’m happy to Why not it was more than he’d ever seen So he thought it was good And so I made a deal with Charlie He was going to get 25% of the profits No fixed fee but 25% of the profits And I said but if we lose Much money and I said lose 25% you have to stop have to wait on a lose all the money so That’s a stop loss Okay What does I was walking out of His apartment shopping occur And I said oh Also if you make too much We’re going to have to stop I said well how much is too much It’s a reasonable question I said 10 times What we invested after your rapacious fee Well how could he say no Charlie said fine so that was the the other stopping rule We stopped on that basis after 10 months He had actually had multiplied the money by a factor I guess if 13 + when you take off to an anyway We actually make 10 times on money It was incredible it was just Completely lucky Hey Kingswell I know it was completely lucky But there was so Now I really Ghetto had some money and I had followed his work My father’s work carefully If I could never I had to Because he never quite knew where he was So I said okay I’ll keep the books every week I’ll tell you where you stand He’s okay that’s great it’ll take that My mind off that So I did that and so I learned a little bit about that and no soy beans in my youth And I thought okay Mathematics is driving me crazy Hi Recently gotten divorced I was on the wrong side of the first wife I was involved with another woman who Turned out to be my second wife and my present wife And I was frustrated with work site. I’m going to go into business and Be a Trader Hand How do I did I did do that and I brought I started doing some Training in that was working okay I got Some investors I brought in a guy From idea he was the best Crypt analyst in the world he was wonderful model-maker and so when he vacchi I don’t know if any of you have ever heard of the bomb Welsh algorithm or the EML grow them anyway it’s a famous Al Gore Vitamin statistics He was the bomb of bound well, so he was a very smart And I said you know you looking at these Commodity charge actually it was Currencies that we would try it again I seem to have some Shape to them they don’t look random to me Maybe we could bake some models they said okay But it turned out and we did we made a model to look like we’re going to be ok and to trade but we were doing fundamental Training in heat He hated the model build he’s a tie you know but he loved the fundamental friend he loved reading the news Skype isn’t reading the tickers and That and the new stickers and Getting ideas it turned out he was For a while very very good so We put the models aside for a while and We traded And we did very well we did very well But it was a gut-wrenching experience you don’t You know one day you walk in and you think you’re a genius, my positions are my way look up And the next day you walk in there against you and you feel yours you’re a dope how could I have done what I did and saw There was no Rhyme or Reason it was just you know you put your finger in the air and you try to sense which way though The wind is blowing I tell you one story to illustrate The craziness it was a time when gold Was going up Gold Head B Had been You couldn’t buy a sell gold and finally you couldn’t If the price was rising and it was rising and We had a deal where Lenny Lenny bomb and I well we’d each have the same When you have our own account I was the boss but we beat you at our own accountant in our own accounting fact we both bought Was supposed to be independent we both like Always going up It was it started a 200 300 400 $500 I got to $500 Which by today’s standards would be Like 15 or $1,800 And I said you know this is this is a very high price I’m getting out Can I show my hat but Lenny I think you should No You don’t know how hot is going to be you can’t miss is going to mrs. Going to go very high that’s okay So he stayed it was 600 It was 700 Who is 800 Does the $800 That day I happen to be talking to a friend of mine on the phone who was a stockbroker and hate Becky with my stock And I said how are things dick and he said oh well Define this morning My wife Lucy came into my closet and cleaned out all of my All tie clasps and cufflinks And went downtown to sell them I will Gault say I said you having a hard time and your family why is she so your wife Always You know she’s a jewel or I said yes I know that II said so she only has to stand in the Short Line You mean the Short Line is Don’t you know that people are lining up Standing for hours Selling that gold I should know I didn’t know that Thank you very much We had a phone in those days if you picked it up It was a different phone if you picked it up It went right to the floor Ubly commodity Exchange And I got Lenny in the office and I put the phone up to his ear and I said Lenny Salvador Packtite And he said No no no no I said Lenny I’m the boss salve Blankety-blank gold I was more infatic than that he said alright alright Sold the gold I may be with $810 All he was mad And The next day we came in And it opened at $830 A doll wings I told you By the end of that day it had dropped 25% it was down to $600 all in one day And it never of course one back Joe That is an example Love Common sense and very good luck A good luck if I hadn’t called my stockbroker the day I did Lenny would have held on to that gold one, it went back to 200 after a while we would have Who wrote it. Written it all the way down I think And so it was just plain luck that I have but it was at least common sense I thought of everyone in the world is trying to All that called How long can it be going up again Oasis There is such a thing of supply and demand So there it was So that was what it was like to be a fundamental Trader it was Stomach rash GymX I got you a Max who was a very well-known algebraist To come and work for us And He was interested in the models that Lennie is Jude And he got a good computer programmer and We built two models and and he showed that the models would use for currencies would work for all commodities And we were on our way with models and Well We Cap fundamental trading but more and more we were trading the models And finally it took about eight years The models were good enough and we went to all models And then we started the company This was a foreigner we started the company called Renaissance Technologies Which Has been going ever since And Has The 300 people that has 90 ph.ds And it’s a hundred percent 100 percent It’s been remarkably Profitable For long time in other mathematicians came in to help I don’t know if elwin berla campus here maybe some of you know he’ll one Henry laufer Joined us and they each Made important Important contributions Joe It has been Remarkably successful people say well what what’s the secret Well there a lot of little secrets because the way this works you have a lot of Smart Guys in Nike Inching away and getting a new idea here in a new ID there and your pilum together and soon you have An awful lot of little ideas that are independent of each other and you can You know you can make some make some progress But the I think Tell people that watch the secret sauce The secret sauce Was really in the first instance Having very smart people Working for the firm what we were Academic shotshells we had an idea of Who was a good scientist and who wasn’t And we brought in and continue to bring an excellent people not just mathematicians but Computer scientists statisticians Experimental physicists Astronomers we got 45 astronomers how good they look at data They can’t do experiments I have to You can’t make this stop bump into that star you just have to take it as it is and that’s the Panda Make model show Great sign We built a terrific infrastructure the computer guys are wonderful What we check in at at I think it takes an 9 9 terabytes a day of data Comes into that outfit And I’ll get started organizing and dished up to the researchers Chantel to Great infrastructure It’s an open atmosphere Everybody knows what everybody else is doing And every every week does a research meeting if you’ve had a good idea that you think it’s going to go somewhere you present it If it looks good Is it goes to a small meeting That it more carefully but There aren’t little groups with working in the dark all this is my little system and I want you to use it so And that’s the best way to do science I think in a collaborative and show you don’t immediately the first time he Have a thought you don’t run down the hallway saying I have a thought But you know you tested out a little bit But So I think that’s that’s a very good way to do things Everybody has a piece of the profits All the senior people own part of the Business and that I think is good too so We have very little turnover Panda And we tried everything we wrote worldwide We tried that with runs 24 hours a day Lock 7 days And the only Rule As we never Override No one ever comes in any day and says The computer wants to do this that’s crazy we shouldn’t do it You don’t do it because you can’t You can’t see me like that you can’t study the past and wonder whether the boss was going to come in and change Change his mind about something so You just stick with it and it’s and it’s That’s work Choke Well So obviously Make money And in 1974 with my wife Marilyn We started a foundation Chowder We been giving money away Maryland Hey we should have a phone So we had a foundation And it was a one-woman foundation it was in the Her dressing room and she had a little box With the records or someone she cheat Studied accounting She was a Actually a PhD in econometrics but you didn’t know anything about accounting And so she took a night course in accounting And I put something on the door for dressing and it was a wonderful cartoon It showed a media evil Setting Big castle Weather Tower And someone was Standing on the tower addressing the multitude sableux And one of the multitude people said to the his neighbor And to think he started life as an accountant So she started accounting And Whoever We both have to Foundation initially we gave money very broadly to Social causes to universities to variety of things But in 2004 just 10 years ago We decided to just focus on basic science and All the kinds of giving that we did Well done outside of the foundation and The foundation Gru And It’s it’s a very very good it’s a good foundation We have a large project On the causes Of autism to try to understand that it’s really a lot of genetics and Neuroscience We have Les chapeaux atoms in in various aspects of life science We have a math and physical science program in fact that David eisenbud Who sitting right there help to organize for us What we have various kinds of Grants and programs in one Another And we also started in the last few years Goal driven collaborative projects so that’s a As its Stated That’s a collaborative project consisting of maybe 10 20 30 40 sometimes 50 scientists Typically in different places But I’ll working towards a common end We have one on the origins of life Which is underfunded thing You can’t imagine me NSF spinner show me not the NIH is not going to give you any money for the origins of life But it’s really fascinating And that’s it Project we have a project called many electrons witches Start of a material science Condensed matter physics trying to model the clouds of electrons inside materials It’s a many body problem really But you have not only is it many bodies which Electrons that would normally repel each other But you also have their entangled If you guys know it entanglement means it A strange phenomenon in quantum mechanics modeling these big clouds of electrons Is extremely difficult to do Even though the first principles are well-known But so what And so that that’s a project and that’s going Quite well We have a project in microbial oceanography Restarting All the interactions between the Merit of Microbes In in the ocean Santa Ana number about it Show It’s It’s quite a vibrant Foundation that I think maybe some p People here Haven’t beneficiary Well you’re on the first row Bouquet I didn’t realize Okay well I mean How people hear The grass shall we give Oh but someone way back there Why aren’t you on the first row with these beautiful girls So So that That’s the foundation now actually under Weston wonderful circumstances I went back to my older age and to do mathematics United 2004 We watched the Sun What about sons and that was obviously very sad And Kind of was a refuge I just started Think about math And you know Doing mathematics you can Retreat and into your head And you just thinking about a problem and it and it can Blood Out other stuff and end I thought about a problem in What’s now called Jeff Roger call mology that I I thought about before and then I got serious about Hernan Turns out I later discovered That was a group of Germans Any German Honeywell Okay there are some Germans in you Who were working on the same problem I didn’t know that Set the time But I got an idea of how to solve it it was But it needed some topology which was beyond me And I spoke to my friend Dennis Sullivan who probably You’ve heard off it was a great apologist and together we we saw this problem with beat out The German Fitbit They were very nice German soccer that came Overnight they had Had some other results that we didn’t have someone in Joel Elvis all very collegial But not unless we beat them And that was that was gratifying And since then I haven’t written a couple of other papers with that is so I found Back Small way doing Chow I retired from From Renaissance And now 5 years ago 2009 And Well I’m the chair Should I go to a monthly meeting and But those guys are doing a wonderful job Peter Brown and Bob Mercer Who came out of IBM 20 years ago Then. They ran it Speech recognition group for IBM They came in and I kept bringing members of that group How to write a song to now there They’re running The company show And I’ve just been focusing on the foundation Fact one of our Bob Mention the other programs are basic science project we have a program called Math for America Inn in New York City Which John Ewing was formerly the head of Executive director of the math American Mattress it who was here There is What is white Janice And John runs at program and it’s a very successful Very successful program of Getting competent teachers Rewarding them In the New York City schools and now in And the state Schools as well And So That’s That’s what I do So Soy I gave a similar talk Sameer Segal My wife said while you know your otter Talk And a talk with your values Chad Remember Weather in the cottage I’m not sure I have any any values I know what my values are exactly But I said oh but I But I have some guiding principles will call him guiding Pro Which Wich Looking back I think I’ve probably filed it so I have five guys Boy tell you So one of them is Don’t run with the pack try to try to do something That’s that’s original course you want to do something original but sometimes it’s in matheran Trying to General Everyone’s kind of running to solve the same problem do the same thing If you’re really fast Maybe you’re going to be the winner But it’s better I think Probably you’re not going to be the one but if you can Shut up doing and run around think about something that other people aren’t thinking about That’s that’s a pretty good way to To do things Now I partnered with a lot of people And I think that partnering was people is terrific but you want to partner with wonderful people The names I’ve mentioned the churn and Sullivan and Various people John Ewing They’ve been Really outstanding David eisenbud Outstanding people And you can Leverage your own Efforts and Sometimes Proper people are smarter than you But that’s fine and if it’s But just have good choice in partners And I think that’s I’ve always try to do that A third principal Is be guided by Beauty Now you all are mashed petitions and you know about Maddox is beautiful And Do you know you’re you know in an equation Greater work Ideas Is very pretty and so on and that’s a wonderful Aesthetic To follow but it’s not just true in mathematics there’s their Aesthetics In other Enterprises a well-run business Is Call of a beautiful thing if everything is just working just right and the pieces I’m Messing And it’s a good organization that that’s kind of beautiful and and it’s so Beauty is a Can be a good guy The last About the penultimate Principle is Don’t give up No Sometimes It is Discretion is the better part of valor and you can just say the hell with it But I can go out to something else and that’s a decision We’ve all made it one time or another But Persistence Has a lot of value and something that’s Really worthwhile can take a lot of time to come to fruition and your other have patience If you believe in something To just stick with it And my final principal is APA good luck That’s it so thank you very much We have a few minutes What’s 4 questions So The floor is open Okay who is it? Alright there’s one there And speak loudly Well I’ve not done a lot of things So the question is When do when do I have any wisdom about when not to do something and Well I don’t think I have any wisdom on that that any One else you looks like a room full of sensible people Panda You probably can Ditto You’ve had a lot of opportunities to say no and it’s And in particular They had of a foundation you really need to know how to say no because you know Well anyway I was going to tell a joke but I won’t Okay another another question Yeah I can’t hear you Okay My thoughts on the hedge fund industry today Do I think it’s working right or I think it’s worth or what’s right or what’s wrong well There are a lot of hedge funds today when when When I started this there were a lot fewer A hedge fund for those of you who don’t know what they are Is a fund that people invest in The managers charge a percentage of the profits Typically let’s say 20% And a fixed fee The maybe one or two percent and they manage the money and the new Hopefully you a benefit from it Hedge funds of ebbed and flowed on I don’t know what the word is That got waxed and waned they’ve got Pet got better and then got worse They go through periods where They seem to be doing all very well The last Two years hedge funds have not done very well The markets have One of the things that’s good about Some hedge funds Buy and sell things and they go along and they go short You need a certain amount of volatility To make that work if nothing’s really moving Then they better talk that I talked to make money was a lot of competition and hedge funds was an awful lot of them today So I think probably That is as a whole industry it’s not as successful as perhaps it was when they were Fewer but there are certainly some Some good hedge funds in that coming all Stripes wear Are funds as I told you it was 100% systematic And there aren’t very many of those But they’re awesome And a few of them are good But But there are many That have other policies and Do fundamental trading in And you know it’s it’s a range of approaches Child That’s all I can say about hedge funds I think Okay What’s the reason On these collaborative goal-driven things but it’s not our only focus it’s it’s it’s Shaping up to be about a third of what we’ll do what we’re doing and it’s not there yet I find it Challenging and enjoyable It’s Ri autism project Which is certainly goal-driven and it is collaborative Has Show me yeah this is a pretty good way to make progress And it and I like I like working with me but I like seeing people working together Chow Yeah it is you have to be careful You understand that the goal Maybe Far off But if they’re making progress like this origins of life I mean You know I don’t think in life my lifetime I’m going to know The answer which is really what’s a completely plausible path let’s say to RNA or something like that From first principles how do we get to that Oneonta Han I see they’re making some really nice nice progress And and how this The chemical came to an existence or that And they’re also looking at exoplanets and seeing and they can look at atmospheres of exoplanets and see what Planets might have atmospheres that would be conducive to life show A lot of science will get done And gradually will will You know eventually maybe we’ll find the answer so I like that Approach it’s not the only approach Most of the money we give out in mathematics Is the individual researchers and so on and all those people fell Held up the hands are Individuals but but I like that Yes When I was a kid how did my parents help Foster my mathematical knowledge that’s the question And the answer is they didn’t I mean you know they thought I was a good kid And they were Glad I like School But I don’t think they said his this boy is going to be I’m at petition or anything like that So I wasn’t put into any Pushed in any direction whatsoever Have to do my homework my mother I was not a good homework to her like I hated doing my homework Yes Okay so what I change anything is I look back in my professional life Well Not really I don’t think I made any huge mistakes In my professional life one doesn’t know what A different path might have might have led to a dime is nothing that glares is that oh my God I wish I hadn’t done that I’m in there silly things In my life that I Say I wish I hadn’t said that or or one thing or another Are going out with that particular Good girl But But in general No when I look back I think was at all okay babe it’s nothing I would no big change that I would want to make What weather Okay Okay that’s a good question the question is at Renaissance where The algorithms that they develop in the ideas are very proprietary And not you know you can’t patent or copyright them Cuz people would just take it over and you You just be lawsuits all the time The question is if we’re developing this Scott a new science Would we have any wish to set of share with the general public In some sense or other hand The answer is No nobody else not meant as a joke that the There isn’t anything that these guys have done That of such generality and Power That it would be that it’s a shame That the world doesn’t know it Is it it’s a very powerful group of people Who can focus on on data and and get some very very good results But but That’s nothing but show General That it would really need to be shared with the world Far as I know Yes Yes Yes okay the question is what am I thoughts on math education In America and my thoughts are needs to be better As probably most of you Most of you realize So How did the background I got interested in this because When I went to Berkeley To be a graduate student I was the Beneficiary Of a National Defense Education Act Fellowship Now only these old folks here and probably ever heard of the National Defense Education Act but when Sputnik went up In 1957 The hole Country wedding into Spasm And the Congress at oh my God you know the Russians are going to beat us I’ll be on the moon throwing vodka Raditz soon we can’t get our satellites up there Got theirs up We need to strengthen the scientific Enterprise in United States and they did They created the National Defense Education Act a beefed-up the National Science Foundation When I got my massage Quarrel with John about this but I’m going to give this statistic anyway When I got my PhD in 1961 I think there were fewer than a hundred people in the United States Show me 100 Americans who got PhD in mathematics Ten years later they were 1400 About 100 was too few 14 highway to know what to do with it because you know they weren’t enough academic job But the end and another Professions other scientific theories this was someone that was a lot of growth and we Saw a national problem Cold War And we were going to solve it through building up our science And we did we did a marvelous job of building up science Salaries went up in in in the universities for Those kind of folks in a lot of people came in The science young young people And it was a great success so about 15 years ago I looked around More maybe more The 15 years but And I Realize that the Teaching Math I was only focusing on math in our schools was really not very good And And I realized like we all do that the economy is becoming Farm or quantitative and then it used to be 40 or 50 years ago And more and more of Things are based on quantitative methods I would not Really Keeping up Are Teachers Buying large don’t know in particular in math I think The subject Very well Cuz if you know enough math to be a good high school teacher and that means you know college math and Something something You’re not just one step ahead of the kids if you know that much Matt and you have the least Mental agility which I Will you see if the second I don’t have You know how to program a computer You can go to work for Google you can go to work for Microsoft you can go to work for Apple I haven’t An apple fell right here in front of me And so and you know you’re going to get paid twice as much and and so on What’s the keep Someone who actually knows the field In the profession Well You might really like teaching and that’s great But the The pullout So something needs needed to be done to make the job of teaching math and in fact Math and Science more track So that we would Educate our kids better and be able to compete in the world and Show I had Okay I have a program I know what to do Friend of mine guy who became a friend Senator Schumer Schumer Adjustment elected and part of the reason he was elected as because I gave him $250 or whatever it was anyway I was just I was a supporter of Senator Schumer I probably was a little more But I know it wasn’t somehow but I had a party for him and became a friend And as soon as he got elected I went right to Washington I said here’s an idea you got to do this and I said Drake this program Reward people who Give teachers a test if they pass the test You give them money And they’ll be rewarded and I’ll stay in the schools and people will be drawn into The field because they’re going to get an extra stipend from the National Defense Education Act You should that’s a great idea I’ll get right on As I left his office another group one in about I don’t know something about Dams on the beaches of Long Island and I heard him say So that’s a great idea I’ll get right on it I’m exaggerating Finish lot we’ve been only slightly So So not he didn’t get right on We Chat we had a few conversations but nothing was going to happen As a federal program And so A few years went by End Actually Msri Was kind of in the picture Because We had A poker tournament to benefit at Msri David hook me up with a few people in New York or in the also in the financial business out of the way you found those guys And We shot together how can we benefit msri And One of the guys with a poker player and we were talking and I said hey you know And I like poker why do we have a Charity poker tournament and we did And it worked Extremely well and then msri Casa benefit Well I thought well if it were going to do this every year In New York It better be something that really relates more than you are cuz I’m not going to get These guys coming out every year to give money to msri which is in California Add for math research I don’t know how we talked him into it the first time but Tell that I thought okay you know maybe this is the time to start this program here in the city And just do what I selves and so so we did And and we had to Tournament every year not raise some money and the quartzite Provided a great deal of it On top of that And so that the program was started privately Two years ago the state of New York Took on to do the same program Outside the city as we’re doing in the city and they’re building up we have 800 teachers of now Math and Science in New York City Next year it’ll be a thousand that will be 10% of the math and science teachers in New York will be part of this A really knowledgeable Committed teachers they all get extra stipends and sewing in the states doing the same thing and will hoping that other states In the country will take on the federal government Is The state of paralysis And it’s probably better to work through States but it’s a long haul That’s a very long answer I’m sorry I maybe I’ll take one more question Okay Amine Baba robot kit for XK you guys know about bourbaki Robotboy biking Well it was sort of a the French of course that this Any French people in the army You know they wanted to codify you know all of You know United States in England we have common law The tradition and other conditions grow up and let you know do you call bike Various court cases in that becomes a law in one thing or another In France and it’s not like that at all everything is codified all of the you know Only in routers code in the end of the French lactic Codify everything and so Bourbaki wanted to get right down to it and Codify mathematics and somewhere then I think some of it was pretty good I’m not an expert on it what what do you think about Poor Bucky Well that’s when it went IC was actually created at that time well okay Weather Will he catch it will they catch it I just be exposed to it I know question and I’m sure of it The federal money is not well as spending my Republican friends think not a penny of it as well spent but. But I think so All of it is anyway I think we have to stop David Is going to throw me off


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You can be smarter than an algorithm, but you cannot be faster. Speed of light, doncha know?! Why do we get so much bullshit on YouTube?

dont waste your time watching this, I wasted 1 hour and learned NOTHING.. to make money like this guy did you must either have insider information or sell your soul to the devil or both.. behind every fortune is a huge crime.

32:20. Mathematics for the win.
Fuck the engineers, fuck the physicist,fuck the computer scientist.
They hate us cause they anus.

I want to thank the founders of this investors archive.I have been watching some of the billionaire interviews & have found them quite educating.

hmmmm…..why did he trade "manifest" for "take place" @ 19:33 – 19:36 . Plus he somewhat shivered after saying "manifest" halfway as if he isn't supposed to use such a word. Very Very Interesting. Sth to ponder on.

So he explains all this shit about computers for ages but when time comes for explaininghow he multiplied his money 10 times he skips . Wtff

this why I hate so call speakers don't waste my time tell me your whole life story I don't give a damm just get to how can I do what u did if I can damm

Such a great achievement, using computers to speed trade, manipulate markets, currencies, suck billions from traditional investors. Where do people think this money comes from?
So great to know that 2008 didn't leave any lasting mark.
Want to worship a billionaire? Find someone who actually created something useful for people, I don't know, Musk..

For those who just want to find out what the secret behind Renaissance Technologies's amazing returns is, you can skip all the dull stuff about what's it's like to be a brilliant mathematician, how he came to make the connection with quantum field theory, what wonderful charitable work Jim has done blah blah and just start at 46:31. Blame yourself if you're disappointed.

I'm confident you would be interested in some quality market analysis stuff so check this guy out, drop a like! I have enjoyed this page a lot so thought more people in the area all together could bring good stuff popular.

Using fancy math to buy and sell stocks is nothing but pure speculation, this guys is probably trying to get gullible people to invest in his mutual fund or hedge fund.

Much more than common sense and luck; 300 mathematics took 8 years to build a fast computer model that beats the market.

Another old geezer pumping his chest, received a bunch of tax money, hired some math and comp geeks with said money and now he has billions…what a genius, more like another parasite roaming amongst us while most people are one pay check from living o the street…stop idolizing these old money geezers, they've done nothing good for society

Did not expect to hear Bob Mercer's name, financier of awful conservative causes like the death penalty in Nebraska.

I saw a number of videos about him. Looking at him now, I just thought, he won't go down as the Einstein of Math, but as the Einstein of WallStreet. Sadly, the later is only selfhelping and of no use for mankind – speaking of which, too, he got the best scientists on his board – double ouchi.

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Look at what this Jew has done. He constructed a mathematical model which, over time, beats the market and thereby extracts wealth by producing nothing of value. To extract large amounts of wealth while producing nothing of value is quintessentially Jewish.

no such thing as thrillx or tediousx or boringx or know enoughx or financial reward or respect or work for that or not, math is a toolx, nonerx, cepu, do/can do any no matter what and any can be perfect. any be any interesx. no such thing as normal or succesx or not, monex maters not, using data analysis is ok, no nerx.

Why does not he do something useful with his talent, other than enrich himself and a handful of his employees?

In high school, kids told me I wouldn't be able to get into any Cal State and that I wasn't smart. I got into a prestigious college, and having taken Algebra 2 in high school, I placed into college calculus, skipping trigonometry and precalculus requirements. This is not to bolster my ego but to state that you don't have to be interested in math at any early age to be good at it. It's moreso the appreciation of applied mathematics in everything that makes me interested. Don't believe what negative things people say about you.

Very nice people want to learn in one hr, while that jim Simons invested complete life to learn and create all these things..
He hired 12000 math and science teacher for American children future @ 16000 dollars per provide high quality math and science education.

Amazing man talking about things I'd never heard of. But..haven't I heard this story before with Long Term Capital Management?

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