The Man Who Solved the Market

Gregory Zuckerman
2019

Highlights

• Finally, he was left alone to ponder what mattered most in his life. Math. Girls. The future.
  —The Man Who Solved the Market by Gregory Zuckerman


• Q: What’s the difference between a PhD in mathematics and a large pizza? A: A large pizza can feed a family of four.
  —The Man Who Solved the Market by Gregory Zuckerman


• “Bad ideas is good, good ideas is terrific, no ideas is terrible.”
  —The Man Who Solved the Market by Gregory Zuckerman


• Simons had to stifle a giggle. Yes, the regulators were grilling him, but they had to realize Simons hadn’t meant to accumulate so many potatoes; he couldn’t even understand why his computer system was buying so many of them.
  —The Man Who Solved the Market by Gregory Zuckerman


• “Why do I need to develop those models?” Baum asked his daughter Stefi. “It’s so much easier making millions in the market than finding mathematical proof.”
  —The Man Who Solved the Market by Gregory Zuckerman


• “Lenny, sell right now.” “No—the trend will continue.” “Sell the fucking gold, Lenny!” Baum ignored Simons, driving him crazy.
  —The Man Who Solved the Market by Gregory Zuckerman


• plummeted 40 percent, it triggered an automatic clause in his agreement with Simons, forcing Simons to sell all of Baum’s holdings
  —The Man Who Solved the Market by Gregory Zuckerman


• Straus’s father and friends gave the same advice: Don’t even consider giving up a steady job to join a no-name trading firm that might fold.
  —The Man Who Solved the Market by Gregory Zuckerman


• Straus had a cousin who worked at AccuWeather, the weather forecasting company, so he made a deal to review Brazilian weather history to see if it could predict coffee prices, another effort that proved a waste of time. Data on public sentiment and the holdings of fellow futures traders also yielded few dependable sequences.
  —The Man Who Solved the Market by Gregory Zuckerman


• They also used simple linear regressions, a basic forecasting tool relied upon by many investors that analyzes the relationships between two sets of data or variables under the assumption those relationships will remain linear. Plot crude-oil prices on the x-axis and the price of gasoline on the y-axis, place a straight regression line through the points on the graph, extend that line, and you usually can do a pretty good job predicting prices at the pump for a given level of oil price.
  —The Man Who Solved the Market by Gregory Zuckerman


• No one ever made a decision because of a number. They need a story. Daniel Kahneman, economist
  —The Man Who Solved the Market by Gregory Zuckerman


• Each week, Simons decided, Brown, Mercer, and other senior executives would be assigned three papers to read, digest, and present—a book club for quants with a passion for money rather than sex or murder.
  —The Man Who Solved the Market by Gregory Zuckerman


• “Peter, you can’t call him,” he said. “It’s two a.m.” Brown looked confused, forcing the colleague to explain himself. “He doesn’t get paid enough to answer questions at two a.m.” “Fine, let’s give him a raise, then,” Brown replied. “But we have to call him!”
  —The Man Who Solved the Market by Gregory Zuckerman


• It became clear to Mercer and others that trading stocks bore similarities to speech recognition,
  —The Man Who Solved the Market by Gregory Zuckerman


• When Medallion spied especially juicy opportunities, such as during a 2002 market downturn, the fund could boost its leverage, holding close to $20 of assets for each dollar of cash, effectively placing the portfolio on steroids.
  —The Man Who Solved the Market by Gregory Zuckerman


• All models are wrong, but some are useful. George Box, statistician
  —The Man Who Solved the Market by Gregory Zuckerman


• Simons was an effective salesman, a world-class mathematician with a rare ability to connect with those who couldn’t do stochastic differential equations.
  —The Man Who Solved the Market by Gregory Zuckerman


• As the global economy deteriorated throughout 2008, and financial markets tumbled, interest in a stake in Renaissance evaporated. But the Medallion fund thrived in the chaos, soaring 82 percent that year,
  —The Man Who Solved the Market by Gregory Zuckerman


• “I’m happy going through my life without saying anything to anybody,” Mercer told the Wall Street Journal in 2010.7
  —The Man Who Solved the Market by Gregory Zuckerman