MURUGAVEL

When Jim Simons started Renaissance Technologies, most of Wall Street thought he was solving the wrong problem. Hedge funds in the late 1970s and 80s were built around people who could read balance sheets, interview CEOs, and forecast economies. Simons built something almost perverse by comparison — a firm that avoided hiring economists and traders altogether. Instead, Renaissance filled its ranks with mathematicians, physicists, astronomers, and cryptographers. People who had spent their careers finding faint signals inside massive, noisy datasets — cosmic radiation, encrypted messages, particle collisions — not people who had spent careers explaining markets. The bet was simple to state and brutally hard to execute: if markets have any repeatable structure at all, it will show up in the data long before it shows up in a story anyone can tell about "why." So instead of theories, Renaissance built models. Instead of predictions about the economy, it looked for statistical r...

  Long before he became known as the most successful trader in history, he was solving problems most people can't even understand. He chaired a university mathematics department. Before that, he worked as a codebreaker for a U.S. defense think tank during the Cold War, using pure mathematics to crack Soviet codes — work he was eventually let go from after publicly criticizing the Vietnam War. Along the way, he co-developed a piece of geometry so fundamental it would later turn up in string theory and even condensed matter physics. This was not a man dabbling in numbers. This was one of the sharpest pure mathematicians of his generation. So why did he walk away from academia to start a hedge fund? He had a hunch that most of Wall Street was getting it backwards. Traders were relying on instinct, narratives, and "expert" judgment about companies and economies. He believed markets — chaotic as they looked on the surface — might actually contain hidden statistical structure, ...