1/Today in @bopinion, I talk about the legacy and career of Jim Simons, the founder of Renaissance Technologies, who is stepping down as the hedge fund's

2/Simons' fund beat the market -- consistently, by huge percentages, after fees.

That's an astonishing accomplishment.

https://t.co/uopG6WutzU
3/How did he do it?

Basically, by being relentlessly smarter and better-managed than the competition.

https://t.co/p6ZTd7POfQ
4/So does Simons' success mean markets are inefficient?

Yes and no.

Obviously yes, since Renaissance could (and can) beat the market. But there are a few key caveats...
5/First of all, RenTech's most eye-popping and consistent returns are in its flagship Medallion Fund.

But most investors can't invest in that fund. It doesn't take your money.

https://t.co/sTXUzl09Lc
6/In fact, the Medallion Fund doesn't even take *its own* money. It makes regular profit distributions, so that the fund's total size remains small -- around $10 billion or so.

https://t.co/bhqE71eSdH
7/This means that the Medallion Fund's famous 39% annualized return (after fees) doesn't compound.

If it did, Medallion would be worth far more than all the rest of the hedge funds in the world combined, by now!
8/So a fund like Medallion isn't really comparable to, say, the return of the S&P. One compounds, the other does not.

Why? Because the market inefficiencies Medallion exploits are limited in size. And thus, Medallion's profit opportunities are limited in size.
9/To address this, Renaissance made a bunch of other funds that do different things than Medallion, and whose strategies scale up more. These have done generally well, but they're no Medallion...

https://t.co/ZsXQ4NNUI8
10/Even as Medallion racked up huge gains in 2020, Renaissance's other funds largely tanked.

This shows that consistently beating the market AT SCALE is incredibly hard, even for the smartest and best-managed people on the planet.

https://t.co/oowJd3k8GH
11/That's no knock against Renaissance, of course. They're the best in the biz.

But it does mean that Renaissance's existence doesn't prove that stock markets are inefficient. Indeed it shows us just how not-so-hugely-inefficient they are!

(end)

https://t.co/uopG6WutzU

More from Noahtogolpe 🐇

1/I'm thinking about the end of Apu in the context of the national debates on immigration and diversity.


2/Apu's presence in Springfield represented a basic reality of America in the late 20th and early 21st century: the presence of nonwhite immigrants.

3/As Tomas Jimenez writes in "The Other Side of Assimilation", for my generation, immigrants from India, China, Mexico, and many other countries aren't strange or foreign. On the contrary, they're a

4/But that America I grew up with is fundamentally ephemeral. The kids of immigrants don't retain their parents' culture. They merge into the local culture (and, as Jimenez documents, the local culture changes to reflect their influence).

5/Simpsons character don't change. But real people, and real communities, do. So a character who once represented the diversity that immigrants brought to American towns now represents a stereotype of Indian-Americans as "permanent foreigners".
Yes, we have been more divided than we are now. Within living memory.


Labor disputes used to kill hundreds of people!

In 1932 Douglas MacArthur called in tanks on protesting veterans, injuring over a thousand people!

In 1967 there were 159 race riots in cities across

In 1921, rioters used airplanes to bomb black businesses in Tulsa, Oklahoma! Hundreds were killed in the riot!

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Margatha Natarajar murthi - Uthirakosamangai temple near Ramanathapuram,TN
#ArudraDarisanam
Unique Natarajar made of emerlad is abt 6 feet tall.
It is always covered with sandal paste.Only on Thriuvadhirai Star in month Margazhi-Nataraja can be worshipped without sandal paste.


After removing the sandal paste,day long rituals & various abhishekam will be
https://t.co/e1Ye8DrNWb day Maragatha Nataraja sannandhi will be closed after anointing the murthi with fresh sandal paste.Maragatha Natarajar is covered with sandal paste throughout the year


as Emerald has scientific property of its molecules getting disturbed when exposed to light/water/sound.This is an ancient Shiva temple considered to be 3000 years old -believed to be where Bhagwan Shiva gave Veda gyaana to Parvati Devi.This temple has some stunning sculptures.