By the late 1980s, Renaissance Technologies had found something rare — a system that worked. But what happened next was almost as unusual as the discovery itself. In 1988, Jim Simons and mathematician James Ax launched Medallion, the fund that would eventually become the best-performing investment vehicle in modern financial history. Yet instead of opening it up to the world's wealthiest investors — the usual move for a fund posting extraordinary numbers — Renaissance did the opposite. Outside capital was slowly pushed out. By the mid-1990s, Medallion was almost entirely closed to outsiders, run overwhelmingly with the money of its own employees. This wasn't modesty. It was strategy. Simons understood something most fund managers ignore: statistical edges decay as more money chases them. A model that works beautifully on a few hundred million dollars can break down entirely at several billion, because the very act of trading a strategy at scale erodes the mispricings it dep...
Opinionated, yet Open-minded.