The greatest trader

[oildaytrader]

Mind you although Medallion, the fund that was closed to new clients years ago, and now is only run for Rentec employees has continued to do extremely well, the other funds, which are open to clients (REIF and RIFF) are by no means as successful.

This is the most up-to-date relevant article I have been able to find so far:

http://www.menafn.com/qn_news_story.asp?storyid={B067928E-43BD-4283-AFD8-2C1AA80520D8}


Another version of that story:

http://www.wealth-bulletin.com/portfolio/content/4058549611/


Another related story:

http://www.wealth-bulletin.com/portfolio/content/4058549611/

And this seems to be a copy of that WSJ story, but you don't need a subscription to read it:

http://www.efinancialnews.com/story/18-03-2010/renaissance-hedge-fund-succession

Exactly!The ponzi scheme could be making money , but not the investor's scheme.

 

[montmorencyt2w]

Exactly!The ponzi scheme could be making money , but not the investor's scheme.

But hang on though; I thought you were putting up Jim Simons as the greatest trader, i.e. something of a hero figure, especially for one such as you, who believes in automated trading.

To be fair, perhaps you have made your point, at least as far as his Medallion fund (and I think its predecessors) is concerned. It appears to have been consistently successful over many years.

But his funds aimed at a larger community of outsider investors have not been successful, to the point where many have pulled out, and the one that once had £100 billion, is now smaller than Medallion, at something like $6 billion (?).

There are a number of different points here:

First, I have seen it stated, that they could not have scaled up the methods they used with Medallion into the much larger fund that they planned RIEF and RIFF to be.
I have not seen a reason given, but I suspect it is partly to do with computer power.
Although no one outside knows exactly how Medallion works (or worked), it was supposed to depend on millions and millions of small short-term transactions, billions of pennies accumulating into millions (and eventually billions) of pounds. I guess that even with their immense resources there are or were limits.

Also, Medallion is not, or was not, an Equity-based fund, so the suggestion above about using stock scanners would not seem to apply.

RIEF and RIFF were partly equity-based and also were designed for longer-term trades.

You say that Simons was not using anything beyond what an ordinary trader could use. I think you are very wide of the mark here. He has/had an army of PhDs, and a battery of servers, and of course masses of capital; a world away from the ordinary trader.

If even he could not scale up his operation from a $6-10 billion fund to a $100 billion dollar fund, then I would respectfully suggest that the systems you have been talking about (in your other thread) would not scale up well either.



It has been suggested (given the mystery that surrounds Simons) that he might turn out to be another Bernie Madoff. While this seems a bit unlikely, even you have used the word "Ponzi".

What his outside investors didn't like was that while their funds were down, the Medallion fund was going great thank you, only for the benefit of Simons and his employees (the last of the outside investors' money having been returned years ago, as I understand it). You don't have to have too much of a suspicious mind to wonder whether some of the money from RIEF and RIFF was actually being channelled off into Medallion...



http://www.bloggingstocks.com/2008/12/21/could-james-simons-be-the-next-bernie-madoff/


An interesting connection with Madoff:

http://wallstfolly.typepad.com/wall...st-in-bernie-madoffs-fund-simons-family-.html


EDIT: another link:

http://dealbreaker.com/2010/03/rentecs-new-ceos-mulling-over-shuttering-rief-and-riff/

Edit: and again:

http://dealbreaker.com/2009/05/live-blogging-the-renaissance-rief-call/