Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

Hello and welcome back to Patrick Boyle on finance. So this week in the news,

legendary investor Jim Simons has stepped down as the chairman of Renaissance Technologies, which is of course

the most successful quant hedge fund in history. Now, Simons hasn't been in charge of the day-to-day

running there for probably over a decade, but he has stayed on as the chairman of the fund

up until this January. Jim's retirement marks the end of an era in finance. Simons's

career and the fund that he launched proved that the finance textbooks which claim that markets are

perfectly efficient were wrong. Obviously the trading strategies at Renaissance are secret, but let's

look at Simons's career and see what lessons we can learn.

So Simons didn't have a fancy upbringing. He was a middle-class kid from Massachusetts. His

father was the manager of a shoe factory in Brookline, Massachusetts, just outside of Boston.

He excelled at school, graduating high school in three years, then skipping the first year of

mathematics while at MIT, and eventually earning his PhD from Berkeley at the young age of 23.

So Simons was clearly a very smart guy, but he was also focused and hardworking, and he found

something he was interested in, mathematics, and really

pursued it.

Simons then went on to teach mathematics for a few years at Harvard University before famously

working at the NSA as a codebreaker.

While he was at the NSA, Simons noticed that his brilliant colleagues weren't hired in for their experience,

but instead just for their sheer brain power, and he realized that you can teach a person how to do a job,

but you can't necessarily teach someone to be smart.

And this realization was one of the keys to his later success.

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