Quant king
The world’s smartest billionaire
Good morning, math geniuses. This is your Stock Market Rundown for May 13th, 2024. Thanks for joining me for another week of financial fun times. Let’s get started:
TODAY’S TOP STORY: CODEBREAKER CAPITALIST
Typically, mathematics professors don’t end up becoming billionaires. But Jim Simons, who died last week at age 86, wasn’t a typical mathematics professor.
The son of a shoe-factory employee and a homemaker, Simons was only 23 when he received his PhD. He cracked Soviet codes during the Cold War, and rose to become chairman of a top university math department.
It was only after he chucked his academic career to wade into capital markets by founding Renaissance Technologies that he became an investing legend.
Simons was among the pioneers of what became known as “quant investors”, who trade stocks, bonds, and other financial assets using mathematical models to statistically predict prices. The chain-smoking Simons was known for hiring brainiac mathematicians rather than MBA types.
Renaissance offered various strategies, but the best-performing by far was the flagship Medallion Fund. Between 1988 and 2018, it achieved annual returns of 66%.
Part of Medallion’s success was due to capping the size of the fund at $10 billion. Profits couldn’t be reinvested, and the fund was closed to outsiders in 2005—only Renaissance employees were permitted to invest (lucky them).
While Simons indulged in luxuries (such as his $100-million superyacht), he also donated billions to supporting causes like autism research and mathematics education. Fitting, for a man the Financial Times dubbed “the world’s smartest billionaire.”
SO WHAT ELSE IS GOING ON?
Elon doesn’t want you getting stranded by the side of the road because your car battery conked out. Tesla will spend half a billion bucks to build more EV charging stations nationwide.
Honda’s profits increased more than my trunk space when I upgraded from a Civic to an Odyssey, rising six fold year-over-year.
Chinese electric vehicle maker Zeekr zoomed in its debut on the the New York Stock Exchange, with the stock up 35% on its first day of trading.
Thanks to food price inflation, Big Macs are now a luxury item. McDonalds is considering introducing a $5 meal deal to lure price-conscious diners. What are they gonna call it, the McSawdust Burger?
That's all for today, superstars; catch you on the flip side tomorrow morning. Yours in capitalism, The Axe
Thank you so much for reading. If you enjoyed today’s Stock Market Rundown, the #1 thing you can do to help me out is forward it to a friend.