What Hedge Funds Really Do: An Introduction to Portfolio Management by Romero Philip J. & Balch Tucker

Author:Romero, Philip J. & Balch, Tucker [Romero, Philip J.]
Language: eng
Format: mobi
Publisher: Business Expert Press
Published: 2014-08-31T16:00:00+00:00

Annual return: 39 percent, 1989 to 2006

AUM: $20 billion (2010)

Style: Quantitative all-asset trend-following, specializing in commodities

Simons background: B.S. in Math, MIT; PhD in Math, UC Berkeley. Mathematician and code-breaker at the Institute for Defense Analysis (IDA); winner of the highest prize in geometry. Fired from IDA for opposition to the Vietnam War, Simons rode from Boston to Bogota, Columbia, on a motor scooter. He then launched a factory in Colombia. Successfully traded commodities during the high-inflation, high-volatility late 1970s, collecting a team of applied mathematicians who used the principles of cryptography to “decode” commodity price patterns.

Differentiation: RenTec employs many scientists and mathematicians without financial backgrounds, believing that they can examine financial data without preconceptions. “Simons’ team took their experience with code-breaking algorithms and used it to look for ghostly patterns in market data. Economists could not compete in the same league, because they lacked the specialized math to do so.” (from More Money Than God)

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