Before there was a Medallion Fund, before Renaissance Technologies existed as a name, there was a piece of mathematics almost nobody outside a narrow academic circle had heard of, and a mathematician who had never set out to solve a market problem. The mathematician's name was Leonard Baum. Leonard Baum spent his career on a problem that sounds abstract to the point of uselessness: how do you infer the hidden state of a system when all you can see is a noisy, partial signal generated by it? Working through the 1960s alongside colleagues like Lloyd Welch, Baum helped develop what's now called the Hidden Markov Model — a mathematical framework for figuring out what's probably happening beneath the surface of data, using only the messy, incomplete observations that surface produces. It was built for speech recognition and codebreaking, not stock charts. And that's precisely why it mattered so much when Jim Simons brought Baum into the fold. The Insight Nobody in F...
Opinionated, yet Open-minded.