How Jim Simons of Renaissance Technologies crushed the market for 30 years - Business Insider

— has accomplished. What's arguably even more impressive is that Simons and his subordinates knew almost nothing about business when they got into it. It simply didn't matter.," readers are given a peek into the inner workings of one of the most secretive and successful hedge funds the world has ever seen — one that started on a whim.

After growing tired of academia, he decided he'd try his hand at investing. New challenges never seemed to faze him, and Simons wanted to apply his mathematical aptitude to the world of finance. Simons' search was unrelenting. Historical data was sequestered into tiny fragments, vetted tirelessly for potential opportunities, back-tested, and then applied to emerging trends in order to verify usability. The firm referred to these finds as "nonrandom trading effects," and aimed to take full advantage of these relationships in their model.

"We make money from the reactions people have to price moves," an employee of Renaissance Technologies said.In time, Simons and his subordinates would carve the trading day into five-minute "bars" as part of their constant search for new ideas. Once a thesis was developed to better understand this pricing action, an algorithm was built to predict where prices would move in the future. Although this practice may seem easy to employ in theory, it incorporated large swaths of data points, complex mathematical models, and tons of computational force.

Good use of technology (and machine learning and language technology in particular) Check this clip:

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