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THE CODE BREAKER

Old article here from Blooomberg.  Some of you might have read it before, but it’s always interesting to look back on.  For those of you who don’t know, Jim Simons runs Rennaissance Technologies, a multi-billion dollar hedge fund that has absolutely trounced the major indices since inception.  It wouldn’t be a reach to say that Simons is the greatest investor alive.

Renaissance is on fire: Its Medallion Fund–which uses computers and trading algorithms to invest in world markets–returned more than 50 percent in the first three quarters of 2007. It had about $6 billion in assets as of July 1. Simons registered that performance as subprime and related markets were collapsing, sending two mortgage-related hedge funds run by Bear Stearns Cos. into bankruptcy. The turmoil pummeled the Goldman Sachs Global Alpha Fund, a rival to Renaissance’s funds, which fell more than 25 percent during the same time. Morgan Stanley’s computer jockeys lost $390 million in a single day in early August.

Medallion’s returns are no anomaly. The fund, which trades everything from soybean futures to French government bonds in rapid fire, hasn’t had a negative quarter since early 1999. From the end of 1989 through 2006, it returned 38.5 percent annualized, net of fees.

The full article can be found here.

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