Simons hired "the best" people?
On who Simons hired: IIRC there is an
interview with Simons where he explains that
he hired good mathematicians, etc. who had
published interesting work or some such.
In particular, he required no MBA or business
degrees, experience with accounting, reading
corporate annual reports, SEC filings, or
business.
So, my guess would be that at least
for the early years of Simons's work, such people would not be very welcome
in the rest of Wall Street and usually not
considered the "best" or even good at all.
Point: That he hired "the best"
has to do with what criteria
one is using for goodness!
By the way, in this thread there is mention
of Thorpe! So, yes, his Beat the Market
had in the back that some argument
was from "measure theory". So, before
my Ph.D., I was working carefully through
Royden, Real Analysis! I was getting
through the two exercises on upper and
lower semi-continuity when I
went to grad school. Right away
I took the 700 level course in
analysis (measure theory and
functional analysis) and probability.
The prof was a star student of
E. Cinlar, long head of Operations
Research and Financial Engineering
at Princeton. Got to meet him
once! So, that background should
be of interest on Wall Street?
After some good efforts,
not as far as I could tell although
then I didn't yet know of Simons.
It is true that the year I got my
Ph.D. near DC, the ORSA (Operations
Research Society of America) conference
was there and I submitted a resume.
I was 110% busy taking care of my
(later fatally) sick wife so didn't
go but some friends said that
on some bulletin board I had lots
of requests from Wall Street! Gee!
At one time I interviewed at
Morgan Stanley and mentioned
my paper on multi-variate,
distribution-free anomaly detection.
A computer systems management guy
was a little interested.
Another guy wanted me to
give him an outline of the paper;
I did and mentioned that I'd
like to work on applied math
of trading -- his reaction
seemed to be that neither he
nor Morgan Stanley nor anyone
on Wall Street would be interested
in any such thing!
Later a Bertsekas student from MIT
gave me the rumor that Simons also liked
hiring Russian mathematical physicists!
Point: It seems
to me from a distance
that
Wall Street has
been slow to hire
people like Simons did.
On what Simons did: There's an old
comment that a good casserole is
like a good marriage -- only
the people who made it really
know what is in it.
My guess is that this remark
applies also to Simons! In
particular I doubt that we
should regard him as a
quant much like the rest of
Wall Street.
Bluntly, I suspect that there's
no telling what the heck Simons did:
E.g., there's no law that he
had to have much contact with
the Markowitz work, the Sharpe work,
the CAPM (capital asset pricing model),
econometrics,
classic time series analysis,
the Thorpe work,
the Black-Scholes work,
the Martingale convergence
theorem, the Doob decomposition,
controlled Markov processes,
stochastic differential equations,
the Brownian motion solution to the
Dirichlet problem --
he could have been doing
things totally different!
Heck, quite generally it's
beyond super tough to be on
the outside trying to know
what's going on inside:
E.g., I got interested in
cooking, once took my wife to
André Soltner's
Lutèce,
but never got a clue
about how he did it!
E.g., I made some progress with
violin but never figured out
how Heifetz did it!
E.g., I made some progress in
physics but never figured
out how Einstein did it!
E.g., I made some progress in
math but really have no
idea how Simons did it.
It's a Robert Frost one?? --
"We dance round and round
and suppose while the secret
sits in the middle and knows."??
My approach to making money
is not to try to get hired
on Wall Street, out on Long Island,
or near the commodity pits
in Chicago or Kansas City
but just to do my startup.
There I don't have to know
all the ways people got rich
in business -- it's enough
for me to find just ONE way!
I don't have to know
how all the cooking,
music, physics, or math of the
past was done -- it's enough
for me to do some math
for the problem I'm trying
to solve.
I don't have to know
every computer operating
system, programming language,
memory management or concurrency
algorithm -- it's
enough for me to know
enough computing to
get the code running
for my startup.
Since I'm able to be
a sole, solo founder, I don't
have to convince
people on Wall Street or
Silicon Valley that I might make them money --
I just need to convince myself
and then actually DO it!
And if I'm successful,
my crucial core original
applied math secret sauce
should remain secret!
Point: I don't believe
I can figure out how
Simons did it!