Every investor in this series relied on judgement: reading balance sheets, sizing up managers or interpreting the economy. Jim Simons did something different. He hired mathematicians, physicists and computer scientists, fed huge amounts of data into models and let the models decide. The result was the Medallion Fund, often described as the most successful investment fund in history. In the final part of Legendary Investors, we look at Simons and then pull together lessons from all ten legends.
A mathematician first
Simons was born in 1938 in Massachusetts. He studied mathematics at MIT, earned a PhD from the University of California, Berkeley, and became a highly respected mathematician. With Shiing-Shen Chern he developed the Chern-Simons theory, which later proved important in theoretical physics. He received the Oswald Veblen Prize in geometry in 1976.
In the 1960s he also worked as a codebreaker at the Institute for Defense Analyses, an experience that taught him to look for hidden patterns in noisy data. He later chaired the mathematics department at Stony Brook University.
Renaissance Technologies
In 1978 Simons left academia and started a trading firm, which became Renaissance Technologies. Early years were rocky, with some traditional discretionary trading mixed in. Gradually Simons and his colleagues moved to a fully systematic approach: computer models that identified small, repeatable patterns in price data and traded on them.
The Medallion Fund launched in 1988. According to Gregory Zuckerman's book The Man Who Solved the Market (2019), it averaged roughly 66% a year before fees from 1988 to 2018, or about 39% after its very high fees. It was closed to outside investors in the 2000s and is now run largely for Renaissance's own employees.
What is quant investing?
Quantitative, or "quant", investing uses mathematical and statistical models to make decisions. Instead of asking "Is this a good company?", a quant asks "When this pattern appears in the data, what tends to happen next, and how reliably?"
Renaissance's edge reportedly came from:
- Enormous, clean data: collecting and cleaning historical prices and other data going back decades.
- Many small edges: each signal might be right only slightly more than half the time, but across millions of trades the advantage adds up.
- Short holding periods: much of Medallion's trading was short term.
- Strict risk control and leverage applied carefully to small, consistent gains.
- Collaboration: researchers shared code and ideas openly within the firm rather than guarding them.
Hiring scientists, not Wall Street
Simons famously avoided hiring people from traditional finance. He recruited astronomers, speech-recognition experts, physicists and statisticians, valuing curiosity and problem-solving above market experience. Robert Mercer and Peter Brown, from IBM's speech-recognition team, became key leaders.
Philanthropy
Simons and his wife Marilyn founded the Simons Foundation, which supports research in mathematics and basic science, and he founded Math for America to support maths teachers. He died in May 2024.
Can ordinary investors copy Simons?
Not directly. Medallion's methods are secret, require vast data and computing power, and work at short time scales where retail investors face high costs. But his story still offers useful lessons: trust evidence over gut feelings, follow your system consistently and avoid overriding it in moments of fear.
What all ten legends agree on
Our ten investors used very different methods, from Graham's bargains to Bogle's index funds and Simons's algorithms. Yet several themes appear again and again:
- Have a clear method. Every legend knew exactly what they were doing and why.
- Control emotions. Fear and greed are the biggest threats to returns.
- Manage risk first. Margin of safety, diversification and position sizing protect you from ruin.
- Think long term. Compounding needs time.
- Keep learning and admit mistakes. Buffett, Munger, Dalio and Soros all talked openly about errors.
- Know yourself. Most people are better off with Bogle's simple, low-cost approach than trying to be the next Soros.
The takeaway
There is no single right way to invest. The best approach is one you understand, can stick with through bad years and that matches your goals and temperament. Thank you for following the Legendary Investors series.
Legendary Investors: the full series
- Part 1: Benjamin Graham
- Part 2: Philip Fisher
- Part 3: Warren Buffett
- Part 4: Charlie Munger
- Part 5: John Templeton
- Part 6: Peter Lynch
- Part 7: John Bogle
- Part 8: George Soros
- Part 9: Ray Dalio
- Part 10: Jim Simons (you are here)
This series is for education only and is not investment advice. Returns, dates and figures are commonly cited historical values and may vary slightly between sources. Past performance does not guarantee future results.
