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

by Gregory Zuckerman

“The lesson was: Do what you like in life, not what you feel you ‘should’ do,” Simons says. “It’s something I never forgot.”

Jimmy reasoned, the family’s automobile could never have run out of gas. After it used half its tank, there would be another half remaining, then they could use half of that, and so on, without ever reaching empty. The four-year-old had stumbled onto a classic mathematical problem involving a high degree of logic. If one must always travel half the remaining distance before reaching one’s destination, and any distance, no matter how small, can be halved, how can one ever reach one’s destination?

“Bad ideas is good, good ideas is terrific, no ideas is terrible.”

A hidden Markov process is one in which the chain of events is governed by unknown, underlying parameters or variables. One sees the results of the chain but not the “states” that help explain the progression of the chain.

“I don’t want to have to worry about the market every minute. I want models that will make money while I sleep,” Simons said. “A pure system without humans interfering.”