The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution, November 2019, reviewed

By @SimonCocking review of The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution. Available here.

NEW YORK TIMES BESTSELLER

Gregory Zuckerman, the bestselling author of The Greatest Trade Ever and The Frackers, answers the question investors have been asking for decades: How did Jim Simons do it?

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

Jim Simons is the greatest money maker in modern financial history. No other investor–Warren Buffett, Peter Lynch, Ray Dalio, Steve Cohen, or George Soros–can touch his 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; Simons is worth twenty-three billion dollars.

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 sweeping 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 means for the rest of us.

Jim Simons, The Man Who Solved the Market, reviewed

This is an interesting book, well written, and, as mentioned above, short listed for next month’s FT / McKinsey Business book of the year award. Of the five books we have read so far (out of the six on the short list) this one is good, certainly raises some important questions, and adds to our better understanding of the business world. However if we were betting people, this would not be our sure fire bet to be the ultimate winner in this competition.

Zuckerman writes well, but even from the very beginning, the title is a little heavy on the hyperbole. For long periods of the book, and the decades covered within it’s time frame, these are not people who ‘solved the market’, so the title is a little disingenuous. Jim Simmons, the main focus of the book certainly, overall, in the long run, does achieve massive financial success, and wealth far beyond his dreams. However it is a bumpy track that he takes, and by the end his methodology is not a done deal, as other companies continue to innovate and challenge their approach.

In the final sixty or so pages the book does get onto some very interesting territory. As we have seen with Bill Gates, and other tech entrepreneurs who have achieved massive success, the opportunity does then follow to have a massive impact on the passion projects that are closest to your heart. But what happens if you invest in Breitbart, and are directly the catalyst to enable a failing Trump campaign to turn around their fortunes and achieve a success that not even they predicted. Unleashing a can of worms upon both the US and the world, that no one surely intended.

This makes for a fascinating chapter in the book, but at the same time it feels like the sands of time of rapidly ebbing from the book, just as it started to get really interesting. We found the book useful and informative to read, but not perhaps the final story on either the Quant revolution, nor the unfortunate rise and kick start to the Alt.right movement in Ireland.

See more book reviews here.

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