#387 Jim Simons Built The World’s Greatest Money-Making Machine

Founders

David Senra

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4.8 • 1.5K Ratings

🗓️ 1 May 2025

⏱️ 68 minutes

🔗️ Recording | iTunes | RSS

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Summary

Jim Simons never took a single class on finance, wasn’t interested in business, and didn’t start trading full time until he was 40. The company he founded — Renaissance Technologies — has made over $100 billion in profits. Starting out with the heretical belief that there was a hidden structure in financial markets, Jim decided to staff his “crazy hedge fund” with mathematicians, computer scientists, and physicists. He went to great lengths to collect more historic financial data than anyone else, spent a lot of time recruiting “killers” (people with single minded focus that wouldn’t quit), invested heavily in computers (and the people who ran them), and designed the most collaborative work environment. Jim was a world-class mathematician, code breaker, exceptional manager of people with exceptional minds, a genius in system design, and deeply understood the power of incentives. He was also incapable of giving up, willing to endure a decade of struggle and pain, and hell-bent on doing something “historic” with his life. Jim Simons lived a life defined by persistence, unconventional thinking, and an unwavering pursuit of excellence. Studying his life and work is time well spent. This episode is what I learned from rereading The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution by Gregory Zuckerman.

Transcript

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0:00.0	Jim Simons published a list of five guiding principles that he used throughout his career.
0:05.1	The second principle that he listed was surround yourself with the smartest people you can find.
0:10.6	When you see such a person, do all you can to get them on board.
0:14.4	That extends your reach and terrific people are usually fun to work with.
0:19.2	It's actually reminded me of Jeff Bezos. From day one in his
0:22.3	very first shareholder letter, Jeff Bezos emphasized the importance of having the very best team.
0:27.6	And he wrote, setting the bar high in our approach to hiring has been and will continue to be
0:32.3	the single most important element of Amazon's success.
0:37.0	Bezos's focus on talent is just like this quote from Steve Jobs that happened in an interview
0:41.1	that Steve gave that very same year in 1997.
0:43.9	Steve said, I think that I've consistently figured out who the really smart people were to hang
0:48.0	around with.
0:48.8	You must find extraordinary people.
0:50.8	The key observation is that in most things in life, the dynamic range between average
0:55.1	quality and the best quality is at most two to one. But in the field that I was interested in,
1:00.6	I noticed that the dynamic range between what an average person could accomplish and what the
1:05.4	best person could accomplish was 50 or 100 to 1, given that you're well advised to go after the cream of the cream and build a team that
1:14.2	pursues the A plus players.
1:16.1	That is exactly what Ramp did.
1:18.3	Ramp is now the presenting sponsor of this podcast, and Ramp has the most talented technical
1:23.7	team in their industry.
1:25.6	Becoming an engineer at Ramp is nearly impossible. In the last 12
	...

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