Monday, June 15, 2020

Thoughts on Zuckerman's The Man Who Solved the Market: Great story about Personalities, but not much Tech Stuff

I read Gregory Zuckerman's book, The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution, with great interest.

Before reading the book, my understanding of Jim Simons was that he was a person doing big data and data science before it was cool— in a wide-open "blue sea." Now, data science is popular on Wall Street, with many firms competing with each other—in a "red sea." I was eager to read the book to learn more about some of Simons' seminal ideas and how they became the foundation for applying a quantitative approach to the market.

Unfortunately, I found that the book lacked substantial insight into Simon's algorithms and tactics.
Instead, the book focused more on personalities and their histories. It described how Simons started a very small operation that eventually grew to become the highly successful Renaissance Fund. Technical buzzwords were mentioned – such as "hidden Markov models" and "Baum-Welch algorithm" – and there were some hints about Renaissance's strategies, such as making trades at certain times of the day, accumulating very granular information on trading history, and looking at correlations between related stocks. However, overall the book provided very few details on Simon's overall approach. Perhaps this was by intention due to the great secrecy surrounding Simons and the Renaissance.

In any case, I enjoyed the book despite the dearth of technical knowledge.

Gregory Zuckerman
The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution



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