A must-read book for anyone in the financial markets

Renaissance Technologies and its founder James Simons have received a worthy biography. The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution is the latest book by Gregory Zuckerman.

If you are involved in finance or just want to know more about making money in the markets, you need to read this book.

Renaissance Technologies and James Simons

James Simons is a mathematician who once did code-breaking for the US government. He would eventually turn his attention to the financial markets. Simons and his team of scientists built Renaissance Technologies into the best-performing asset management firm of all time. From 1988 through today, the firm compounded at least 65% before fees.

Now, the book does not reveal any of Mr. Simons exact techniques or provide you with line of code from his team’s black box. However, the book does help readers understand the thought process that helped them achieve spectacular gains.

The team understood how to model human behavior. The anomalies and patterns they found in the data were the results of other investors mistakes. Their computing power allowed Renaissance Technologies to identify and exploit these mistakes for huge gains.

More on the Book

The book reads like a high-tech finance novel instead of a dry recitation history. We are introduced to some of the great mathematical minds of the last 50 years. We also learn how through trial and error, James Simons’ team combined to rewrite the idea of trading and finance.

Managing the collection of personalities was every bit as important as managing the data his team collected and Mr. Simons is revealed to be not just a brilliant mathematician but a brilliant manager of people as well.

Today quantitative strategies are becoming widely accepted but that, not always s the case. People were very skeptical of using a black box to trade financial instruments. The Man Who Solved the Market is an exceptional look at the history of quantitative trading and investing.

It should be at the top of your must-read list this winter.

Reviewed by Tim Melvin

Review: ABI Research: the U.S. Represents 52.3% of All Artificial Intelligence Investment