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Aug 23
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Jim Simon is a hedge fund manager with Renaissance Technologies. A.K.A as “Quants” Traders with PHds and rely on complex mathematics in making money.
When they came to the scene with their mathematical models for investing it seemed they had found the answer to the age old question “Is there a perfect formula to make money in the stock market?”
From a NYT article:-
Mr. Simons was celebrated as the King of the Quants after his in-house fund, Medallion, posted an average return of nearly 39 percent a year, after fees, from 2000 to 2007. It was an astonishing run rivaling some of the greatest feats in investing history.
With those kind of results it was easy for investors to get carried away with the idea that Jim Simon and the rest of Quants family were the messiahs.
Past results is not an indicator of future performance.
After the collapse of Bear Sterns and Credit crises most Quant funds are fighting for their own survival. The NYT article further reported : -
The combined assets of quantitative funds specializing in United States stocks have plunged to $467 billion, from $1.2 trillion in 2007, a 61 percent decline. And One in four quant hedge funds has closed since 2007