The Mathematician who Cracked Wall Street
- Thread starter Chuck Krug
- Start date
I've always held Jim Simons in the highest regard for his genius and incredible talent. In terms of the markets, his accomplishments should serve as inspiration to many that aspire to get to the next level.
Renaissance charged 5 and 44 and eventually closed to new investors and Medallion has reportedly averaged around 70% a year.
Opportunities are out there.
Renaissance charged 5 and 44 and eventually closed to new investors and Medallion has reportedly averaged around 70% a year.
Opportunities are out there.
None of this is true. It's well documented that Rentech violated leverage limits. It was running at 15x leverage when hedge funds are limited to, at most, 6x leverage. Rentech in effect was running an unregulated broker dealer fronted by the legitimate broker dealers. If Simons had some special sauce, he wouldn't need massive and illegal levels of leverage.
Great stuff, thanks for posting!
Can you please elaborate on 6X max allowed to HFs. I have never heard anything like this before.
If what you tell is true, then the performance is more like a joke.
70% with leverage 6 means only 11.66% without leverage.
70% with leverage 15 means only 4.66% without leverage.
Hedge Funds, Leverage, and the Lessons of
Long-Term Capital Management
Report of
The President's Working Group on Financial Markets
April 1999
Hedge funds are limited in their use of leverage only by the willingness of their creditors and counterparties to provide such leverage.
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The fact that he's running so much leverage is testament to the quality of his strategies. If he's running so much leverage, a 1% loss on the book (which is not unreasonable for most strategies) would be a 15% loss on equity. Yet he's never had a down year for like 30 years.
If he is in fact running an unregulated broker dealer, that's testament to his cleverness. Trading isn't just about calling the direction of stocks. It's about building a platform with real edge. He has done that by building this "unregulated broker dealer" which gives him access to leverage and access to superior execution.
I'd like some elaboration here as well if we are to take any of this post seriously.