Prologue | curiosities.dev

Fall 1990. Simons had spent 12 years searching for a successful investing formula. In 1989, his net returns were -4.0%. In 1988, he had netted 9.0%. In 1990, he netted 55.0% (77.8% before fees).

With Elywn Berlekamp, game theorist professor at UCB, Simons built a model for selecting idea trades based on data.

Berlekamp knew their approach was alchemic - no cash flows, interest rate forecasts, product research. Some of the trade recommendations didn’t make sense.

From :

Marilyn Simons, who has a Ph.D. in economics, said that her husband, Jim, a financier and a former mathematician, doesn’t like puzzles: “He says that if he works that hard he wants to get a theorem out of it.”

I like Rockmore’s casualness when name-dropping Jim. Yields some insight into Simon’s character.

Simons believed the system could be tuned to give 80%. Berlekamp was incredulous and quit due to Simon’s incessant nagging.

Simons firmly believed that there are patterns in the market and they can be found.

Sets up Simon’s convictions. It’s the opposite of what random walkers would say.

Dinner! Drinks! Denominators! | The New Yorker. Dan Rockmore. www.newyorker.com . Jan 10, 2022.