Today on the Rational Reminder Podcast we interview a seasoned journalist from The Wall Street Journal, Greg Zuckerman. With 23 years of experience with the media outlet, Greg has written extensively about the most prominent figures in the world of investing, including Jim Simons, John Paulson and Carl Icahn, generally focusing his attention on significant trades, traders and fund managers. In this episode, Greg shares how covering the stories of renowned investors and fund managers have influenced his investment philosophy. Specifically, we get into his book about John Paulson, The Greatest Trade Ever, and why Greg reckons Paulson never managed to achieve the same level of success following this famous trade. His work on the founder of Renaissance Technologies, Jim Simons, also produces fascinating points of discussion, including why their Medallion Fund became so successful and how capping the size of the fund contributed to its outstanding performance. Greg also talks about the idiosyncratic character of Simons, the role of luck, why taking an algorithmic approach to investing is likely to produce good outcomes in the long run, and why people should not always pay attention to the advice of “smart money” sources like hedge funds. 

Key Points From This Episode:

• How covering the stories of prominent fund managers has affected Greg’s investment philosophy. [0:03:27.1]
• Thoughts on the likelihood of fund managers outperforming the market. [0:05:54.1]
• Hear about John Paulson’s big trade and why he has failed to outperform since. [0:07:24.1]
• Find out what made Renaissance Technologies’ Medallion Fund so successful. [0:11:25.1]
• The role that capping the size of their fund has played in their ongoing success. [0:13:30.1]
• More about Jim Simons: the mathematician with outstanding people skills. [0:14:46.1]
• The influence that Simons personally had on the outcome of the Medallion Fund. [0:17:02.1]
• The unpredictability of luck and intuition Simon’s relied upon in his early days of trading. [0:22:22.5]
• George’s biggest surprise in writing the story and his general thoughts on market efficiency. [0:24:27.1]
• Advice about investors making decisions based on the opinions of people like Buffett and Dalio. [0:28:06:7]
• Algorithmic thinking and other lessons from working with Renaissance Technologies. [0:31:26.1]
• Why the so-called “smart money” sources like hedge funds are not so smart. [0:34:28.6]
• Learn how Greg became interested in Wall Street characters and how he gets access to their stories. [0:36:36.6]

Find show notes and other resources here

Brian Keating, Director of the Simons Observatory, interviews Greg Zuckerman, author of the bestselling biography of Jim Simons, “The Man Who Solved The Market”.  Portfolio/Penguin has published Greg Zuckerman’s latest book, THE MAN WHO SOLVED THE MARKET: How Jim Simons Launched The Quant Revolution. This book, the culmination of two challenging years of research, is the story of how Simons, a secretive mathematician and code breaker, set out to conquer financial markets, overcoming a series of imposing obstacles to become the greatest moneymaker in modern finance. Recruiting colorful and enigmatic mathematicians and scientists, Simons embraced algorithms and computer models while Mark Zuckerberg was still in grade school, launching a quantitative revolution that has shaken Wall Street. With their winnings, Simons, his colleague Robert Mercer, and others at Renaissance Technologies have upended the worlds of education, science and politics. THE MAN WHO SOLVED THE MARKET was shortlisted for the Financial Times/McKinsey Business Book of the Year award. The book competed against five of the year’s best nonfiction books for the award. It’s been reviewed in Bloomberg, and the Financial Times, and adapted in the Wall Street Journal. Get your copy here:  or from our friends at Warwicks.com

For more, including an excerpt of the book and its many endorsements and reviews, visit here.

In this episode of the Intelligent Investing Podcast, Eric Schleien sits down with WSJ Veteran Reporter, Gregory Zuckerman, to discuss his book "The Man Who Solved The Market: How Jim Simons Launched The Quant Revolution"

“Leave it to the Wall Street Journal’s Greg Zuckerman to lay open the golden mysteries of quantitative investing. With this fine, humane, and eye-opening book, he’s well and truly broken the code.” —James Grant, Grant’s Interest Rate Observer

• NEW YORK TIMES BESTSELLER
• Shortlisted for the Financial Times/McKinsey Business Book of the Year Award
• The unbelievable story of a secretive mathematician who pioneered the era of the algorithm--and made $23 billion doing it.

The Man Who Solved The Market: How Jim Simons Launched The Quant Revolution": Summary

Jim Simons is the greatest money maker in modern financial history. No other investor--Warren Buffett, Peter Lynch, Ray Dalio, Steve Cohen, or George Soros--can touch his record. Since 1988, Renaissance's signature Medallion fund has generated average annual returns of 66 percent. The firm has earned profits of more than $100 billion; Simons is worth twenty-three billion dollars.Drawing on unprecedented access to Simons and dozens of current and former employees, Zuckerman, a veteran Wall Street Journal investigative reporter, tells the gripping story of how a world-class mathematician and former code breaker mastered the market. Simons pioneered a data-driven, algorithmic approach that's sweeping the world.As Renaissance became a market force, its executives began influencing the world beyond finance. Simons became a major figure in scientific research, education, and liberal politics. Senior executive Robert Mercer is more responsible than anyone else for the Trump presidency, placing Steve Bannon in the campaign and funding Trump's victorious 2016 effort. Mercer also impacted the campaign behind Brexit.The Man Who Solved the Market is a portrait of a modern-day Midas who remade markets in his own image, but failed to anticipate how his success would impact his firm and his country. It's also a story of what Simons's revolution means for the rest of us.

Greg is a Special Writer at The Wall Street Journal, ​a 20-year veteran of the paper and a three-time winner of the Gerald Loeb award — the highest honor in business journalism.

Greg is the author of “The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters,” a national bestseller published October 2014 by Portfolio/Penguin Press. The book describes how several unlikely individuals created an American energy renaissance that brought OPEC to its knees. The Frackers was named among the best books of 2014 by The Financial Times and Forbes Magazine and book of the year by the New York Financial Writers Association.

Greg also wrote “The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History,” a New York Times and Wall Street Journal best seller published December 2010 by Crown Business/Random House. The book has been translated into 10 languages.

Greg and his two sons wrote Rising Above: How 11 Athletes Overcame Challenges in their Youth to Become Stars,” a book for young readers and adults published May 2016 by Philomel/Penguin that describes the remarkable stories of how stars in various sports overcame imposing setbacks in their youth. The book was chosen by Scholastic Teacher magazine as a top pick for 2016 and a top 2017 recommendation of the Texas Library Association. In February 2018, Rising Above-Inspiring Women in Sports, also written by Greg and his sons, will be published.

At the Journal, Greg writes about big financial firms, personalities and trades, hedge funds, the energy revolution and other investing and business topics. Previously, Greg was the lead writer of the widely read “Heard on the Street” column and covered the credit markets, among other beats.

In 2015, Greg won the Loeb Award for a series of stories revealing discord between Bill Gross, founder of bond powerhouse Pimco, and others at the firm, including Mohamed El-Erian. The stories led to Mr. Gross’s surprise departure from Pimco. In 2012, Greg broke news about huge, disastrous trades by the J.P. Morgan trader nicknamed the “London Whale.”

In 2007, Greg was part of a team that won the Gerald Loeb award for breaking news coverage of the collapse of hedge fund Amaranth Advisors and in 2003 he won the Loeb award for breaking news coverage of the demise of telecom provider WorldCom. Greg was part of a team that won the New York Press Club Journalism award in 2008. He was a finalist for the 2011 Gerald Loeb award for investigative news coverage of the insider trading scandal and a finalist for the 2008 Gerald Loeb award for coverage of the mortgage meltdown.

Greg appears regularly on CNBC, Fox Business, Yahoo Finance, Bloomberg Television and various television networks. He makes regular appearances on National Public Radio, BBC, ABC Radio, Bloomberg Radio and radio stations around the globe.

Greg gives speeches to business groups on a variety of topics. Over the past year, he has spoken to groups in New York, Los Angeles, San Francisco, Houston, Dallas, Las Vegas, Phoenix, Calgary, Montreal and Niagara Falls.

Greg joined the Journal in 1996 after writing about media companies for the New York Post. Previously, he was the managing editor of Mergers & Acquisitions Report, a newsletter published by Investment Dealers’ Digest. He graduated from Brandeis University in 1988, Magna Cum Laude.

A graduate of Brandeis University, Greg lives with his wife and two sons in West Orange, N.J., where they enjoy the Yankees in the summer, root for the Giants in the fall, and reminisce about Linsanity in the winter.

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Jim Simons is the most successful trader of the last 3 decades by a country mile. Simons founded the Renaissance Technologies the secretive Hedge Fund which employs some of the world’s most brilliant mathematical geniuses. Their flagship Medallion fund has returned a staggering 66% annually, before fees, since 1988.

In November 2019, Wall Street journalist and author Greg Zuckerman published his book which lifted the veil on Jim Simons and Renaissance. ‘The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution’ tells the story of Simons, his early years, his influences, his prolific rise as a mathematician, and his career as a code-breaker for the US government. It explores Simon’s initial ventures into the world of investing and trading, how Simons vision shaped the direction his firm took, his search for methods and models which could unlock the potential to profit in the markets and how he accumulated a team of world renowned Mathematicians to form Renaissance Technologies.  

This brilliant book also tells the story of the Renaissance through some of the individuals which were leading figures within the firm, how they found and improved the model which still runs today as the Medallion Fund, and how they launched other highly successful funds. The book also digs below the surface to reveal some of the dramas which occurred within the firm, the battles between personalities, and finally the how the wealth created by one partner, Robert Mercer, was to have a huge influence on the world we live in today, and which without, we may not have had Donald Trump or Brexit. 

The book is a brilliant read, and in this interview with Zuckerman, we explore his inner thoughts on the book, Simons and Renaissance and discover a little more about what lies behind their extraordinary success. 

You can find out more about the AlphaMind podcast and the show’s co-hosts Steven Goldstein and Mark Randall on the AlphaMind podcast website https://alpha-mind.net.

You can also follow them on twitter https://twitter.com/AlphaMind101 or visit their blog page https://alphamindblog.blogspot.com/

If you are interested in the AlphaMind Trader Performance Coaching you can find out more at  https://alphamindblog.blogspot.com/p/the-alphamind-private-trader.html

Gregory Zuckerman is a "Special Writer" at the WSJ. He is the author of a new book about Jim Simons and RenTech: https://amzn.to/2tAkxU9. 

He is also the author of The Greatest Trade Ever https://amzn.to/2ZQ5v96 and The Frackers.  

Greg's Twitter: https://twitter.com/GZuckerman 

Greg at the WSJ: https://www.wsj.com/news/author/gregory-zuckerman

ABOUT THE PODCAST

Hi, I'm Tobias Carlisle. I've launched a new podcast called The Acquirers Podcast.

The podcast is about finding undervalued stocks, deep value investing, hedge funds, activism, buyouts, and special situations.

We uncover the tactics and strategies for finding good investments, managing risk, dealing with bad luck, and maximizing success.

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ABOUT TOBIAS CARLISLE

Tobias Carlisle is the founder of The Acquirer’s Multiple®, and Acquirers Funds®.

He is best known as the author of the #1 new release in Amazon’s Business and Finance The Acquirer’s Multiple: How the Billionaire Contrarians of Deep Value Beat the Market, the Amazon best-sellers Deep Value: Why Activists Investors and Other Contrarians Battle for Control of Losing Corporations (2014) (https://amzn.to/2VwvAGF), Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors (2012) (https://amzn.to/2SDDxrN), and Concentrated Investing: Strategies of the World’s Greatest Concentrated Value Investors (2016) (https://amzn.to/2SEEjVn). He has extensive experience in investment management, business valuation, public company corporate governance, and corporate law.

Prior to founding the forerunner to Acquirers Funds in 2010, Tobias was an analyst at an activist hedge fund, general counsel of a company listed on the Australian Stock Exchange, and a corporate advisory lawyer.

In this episode, you'll learn:

• How Jim Simons’ fund has performed 66% annually since 1988
• How to make money when you’re only right 51% of the time
• Why there are fewer inefficiencies in the market than value investors think
• Ask The Investors: What is the difference between index funds and ETFs and what is the better investment? 

BOOKS AND RESOURCES MENTIONED IN THIS EPISODE

• Gregory Zuckerman’s book, The Man who Solved the Markets – Read reviews of this book
• Tweet to Gregory Zuckerman
• Email Gregory Zuckerman
• Sign up to the TIP live event in Los Angeles with Stig and David by emailing stig@theinvestorspodcast.com
• Join the Mastermind Group and the TIP Community for the Berkshire Hathaway Annual Shareholder’s Meeting
• Download your free audio book at Audible.
• Be prepared for the unexpected with AirMedCare Network.
• Automate your work with Zapier.
• Move your business to the cloud with Netsuite.
• Discover CMC Markets, the ultimate platform for online trading on mobile and desktop.
• Experience a real estate investing platform that is powered by an investor-first model with Fundrise. 
• Send money abroad the smart way with Transferwise.

In this episode, we talk about the recently released book about Jim Simons, and the methods he used to become the most successful investor in recent history. 

Gregory Zuckerman is a writer at the Wall Street Journal and author of The Man Who Solved the Market: How Jim Simons Launched The Quant Revolution.

For anyone unfamiliar, Jim Simons is the brilliant-minded mathematician who founded hedge fund Renaissance Technologies. Using quantitative models and with billions in AUM, Renaissance has averaged annualized returns of net 39% since 1988. And these returns only become more spectacular, once you discover that Renaissance investors pay a management and performance fee of 5 and 44—therefore bringing the gross annualized returns to 66%.

Due to the superior performance, today, Jim has an estimated net worth of $23-billion. Greg describes him as being, “The greatest money maker in modern financial history.”

Although journalists have previously covered the rise of Renaissance, for the longest time, much of it was still shrouded with mystery. But by gaining remarkable access to Jim and also many of the people around him, Greg has been able to tell the full story, in print, with detail and accuracy.

Pick up a copy of The Man Who Solved the Market, available on Amazon.