The Man Who Solved The Market

The Man Who Solved The Market shares the interesting story of Jim Simons’s rise to wealth and success that came from him tapping into his math genius to make incredible gains in stock market investments.

Do you think that a 4-year-old could understand complex math theorems? How about come up with them all on his own? As crazy as it sounds, this is just what young Simons did.

His interest in math began early. By three he knew how to solve complex problems. And can you divide 1024 by 2? Young Simons’s parents were surprised one day to find him doing divisions like this one and more!

A normal kid in the car might enjoy looking out the window and daydreaming. Jim Simons had bigger thoughts though. He once had difficulty understanding why his Dad had to put gas in the car, thinking the tank shouldn’t ever run out.

The reasoning behind this was that once half of the tank was gone, the other half was left to use. This could continue on theoretically forever and they would never need more gas. It turns out the boy had found a math problem that Greek philosophers first came up with!

Although the family doctor thought that Simons should study medicine, the newly graduated young man had his sights set on arithmetic. It was no wonder that he began at MIT and quickly found himself majoring in mathematics. At first he had a difficult time and even failed some tests, but put his head down and got to work. His efforts paid off and he soon felt he was on track for the sort of life he wanted.

His impressive career includes studying at MIT and Berkeley, teaching at Harvard, cracking Soviet codes during the Cold War, and much more. All of his studies in math made Simons think about how it could apply to the stock market. At 40-years-old he left academia to begin a hedge fund management firm by the name of Monemetrics. Although this decision sometimes troubled him, Simons had to admit that he was curious about hidden patterns in the market and wanted a lot of money. Beginning this journey with his friend Leonard Baum, the two were destined for success. Baum’s work would help lay the groundwork for the company’s impressive earnings. His research into hidden Markov chains helped him develop an algorithm that could estimate events from analysis of the existing patterns. This unique tool was so influential that it’s still used today in speech-recognition and Google’s search engine! The art of predicting would be very useful in analyzing changes in the markets. Although they began by only trading in currencies, they quickly began to make…