James Simons. A conversation with Billionaire Mathematician
Published on Jan 15, 2016
James Simons. A conversation with Billionaire Mathematician [HD]
1:43 Berkeley
3:00 Simons & Chern
4:35 Codebreaker
5:16 Knowledge that worth billions of dollars
7:55 Efficient market theory or do prices always right?
9:15 Machine Learning
13:18 Never look back
14:45 Math for America
15:54 If you know enough math to teach in high school you know enough to work for Google
James Harris “Jim” Simons (born 1938) is an American mathematician, hedge fund manager, and philanthropist. He is a code breaker and studies pattern recognition. Simons is the co-inventor – with Shiing-Shen Chern – of the Chern–Simons form,Chern and Simons (1974) one of the most important parts of string theory.
Simons was a professor of mathematics at Stony Brook University and was also the former chair of the Mathematics Department at Stony Brook.
In 1982, Simons founded Renaissance Technologies, a private hedge fund investment company based in New York with over $25 billion under management. Simons retired at the end of 2009 as CEO of one of the world’s most successful hedge fund companies. Simons’ net worth is estimated to be $14 billion.
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she started the beginning ok as a child
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are you good at mathematics like was with mathematics and natural thing for
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you which I was very natural and I always like that I like counting like
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continually multiplying things by 2020 by the time I got 2024 or whatever it is
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I was had enough of it but I like I like I discovered as a very young kid maybe
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for something called Zeno’s paradox generator of Zeno’s paradox my father
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told me that the car could run out of gas and I was disturbed by that notion I
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never occurred to me but then I thought well it shouldn’t run out you could
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always use half of water has another can use half of that number half of that
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interview go out for every child whatever I know so now it didn’t occur
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to me yes but it wouldn’t get very far either but but the idea that in
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principle you didn’t have to run out of gas was kind of a profound thought for
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about a little boy did it feel like just as well your career was gonna take you
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away you like have another boy who dreamed of being a baseball or something
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normal normally only thing I thought about was I would be a mathematician
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whatever exactly that met I didn’t know quite what it meant except that actually
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only subject I really like
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they want to go to berkeley
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disease meet some new faculty cuz I was quite close to the MIT faculty and I
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thought I think that it will want to get rid of me so much as they thought I was
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probably pretty good so I should get exposed to a certain guy named churn who
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was just coming to Berkeley that year and I got this very nice fellowship and
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I went there I was very eager to work with Jeremy Chardy except he wasn’t
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there he celebrated his first year at berkeley here just come to Brooklyn he
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celebrated that first year like taking a sabbatical so he wasn’t there so I work
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with another guy which which was fine and by the time church came in the
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second year I was already pretty far along with what the thesis project I was
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giving a seminar at the beginning of my second year at Berkeley and then walk
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this tall Chinese guy and i said i text me that that’s church at church I didn’t
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know he was Chinese I thought church was probably shot portrait of secure
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shopping or he’s probably some polish guy who would shorten his name to charge
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it had been channel Channel I would have known it was judge but churn with the IR
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but anyway so I’m at church and then we became French cause I was much younger
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than me but we became friends and later collaborators
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so we worked
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and we came up with these results of this whole structure in fact there’s
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that’s the slides of the presentation to turn made at the international congress
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in the early seventies it was very nice job a tree I pushed on with that and we
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define something called differential characters which was another chapter
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with working with a guy named cheerleader but the church Simons
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invariants about ten years later the physicists got a hold of it and it
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seemed to be very good for what ails them whatever what might have held them
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and so and it wasn’t just string theory as I software developer was kind of all
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areas of physics including condensed matter there have been some strong
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numbers seem to want to look at those terms that’s really what’s great about
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basic science in this case mathematics I mean I didn’t know any physics didn’t
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occur to me that this material that China and I had developed would find you
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somewhere else altogether this happens in basic science all the time that want
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one guy’s discovery leads to someone else’s invention and leads to another
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guy’s machine
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actually in the middle of
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mathematics career which ended when I was about 37 38 was that I spent four
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years at a place called the Institute for Defense analyses down in princeton
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which was super secret government based national security agency based place for
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cold cracking but I also learned about computers and algorithms and I did one
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thing that was quite as I can tell you what it was classified so I had a good
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career they’re both doing mathematics and learning about the fund computer
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modeling
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a little bit of money and I have had the opportunity to try investing it and that
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was interesting and I thought you know I’m gonna try another career altogether
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and so I went into the money management business so to speech so you started
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with some of your dad’s money and that got you have an interest in some family
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money and then some other people put up some money and I did that no models know
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models for the first two years so what we doing then you just using coming and
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you know just like normal people don’t like normal people do and I brought in a
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couple of people to work with be and we were extremely successful I think it was
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just playing good luck but unless we were very successful but I could see but
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this was a very gut-wrenching business you know you come in one morning you
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think you’re a genius democracy thought we were trading currencies and
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commodities and financial instruments so I’m not stocks those kinds of things and
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that’s bosnia coming you feel like a jerk the market’s against you was very
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gut-wrenching and in looking at the patterns of prices I could see that
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there was something we could study here that there may be some ways to predict
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prices mathematical or statistical and I started working on that and then brought
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in some other people gradually build models and models got better and better
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and found the models replaced the old stuff so it took a while I would have
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thought with your background and mathematician this would have almost
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occurred you immediately like you would have strayed away saying this was what
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was the two-year delay well two things I saw it pretty early but and I brought in
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a guy who was a wonderful guy also from the cold cracking place and he was I
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thought together will will stop building models that was fairly early but it
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wasn’t right away but he got more interested in us on the amount of stuff
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he says the mall
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going to be very strong and so on so forth so we didn’t get very far but I
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knew there were models to be made then I brought in another mathematician and a
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couple more and better computer guy and then we started making models which
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really worked but you know the general there’s something called the efficient
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market theory which says that there’s nothing in the data sets a price data
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which will indicate anything about the future is the prices always write the
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prices always write some songs but that’s just not true so are anomalies in
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the data even in the price history data for one thing
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commodities especially used to trend not dramatically trend but trend so if you
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get the trend right you bet on the trend and you’d make money more often than you
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wouldn’t whether it was going down or going up that was an anomaly in the in
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the data but gradually we found more and more and more and more
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anomalies none of them is so overwhelming that you gonna clean up on
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a particular anomaly as if they were other people would have seen them so
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they have to be subtle and you put together a collection of these subtle
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anomalies and you begin to get something that will predict pretty well
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it’s it’s what’s called machine
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behind
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things that are predictive you might guess 0 such-and-such should be
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protective might be productive and you tested on the computer and maybe it is
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maybe it isn’t what discipline of mathematics or disciplines is a
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multidisciplinary are we talking about statistics mostly statistics and some
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some probability theory and but I can’t get it to you know what things we do to
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use what they really don’t use we reach for different things that might come
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that might be effective I would imagine lots of people want to have been
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financially successful most famous people what that of course I scrolls and
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lots of people good at mathematics and know a lot about computers like you know
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if your level I would imagine why did you do it why didn’t someone else do it
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I don’t know what about some other people have done it I think that we’re
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farmers that are but nonetheless that but nonetheless other people have done
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some very good modeling and so we’re not alone but it’s not easy to do and
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there’s a big barrier to entry for example huge datasets that we’ve
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collected over the years
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programs that we’ve written to make it really easy to test hypotheses and so
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the infrastructure is exceptionally good show everything is tuned right that took
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years to learn how to do that I know you guys made the modal say you do have the
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ownership of a and proud of it but it’s hard to follow the model religiously
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life is hard for a go to think all the successes because of the computer like
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and I just SAT there and watched the computer just a tool that we used to be
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a good cabinet maker doesn’t say it’s all because of my wonderful chisel you
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know you may have great film equipment but that’s not why your successor doing
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what you’re doing you working with good equipment but another guy would make a
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mess of it with the same equipment
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so no we don’t we don’t see all of the computers doing it with a computer does
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what you tell it to do given that you will put some of it down to like what
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are you most proud of all of this and the business or the or the mathematics
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from that first half of your career any chance that I’m proud i think im proud
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of both I i think you know I’ve done some mathematics and some but had a
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positive effect as I’m proud of that and i felt nice business and I’m proud of
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that I don’t say I’m proud of one than the other and now for the last number of
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years working with my wife on this foundation which he started actually 94
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with my money but nonetheless she started the foundation that then I
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joined I got more and more involved with the foundation as time went on and now
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that’s my main thing I’m pretty proud of the foundation let me focus more on
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which the mathematics versus the business then would you would you trade
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any of your any or all of your business success for for being the man who
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cracked the Riemann hypothesis or something like that that’s a good
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question I trade that for
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well I probably trade show but I mean for the remainder party it would
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certainly be a troll 2 I’m pleased with what my career has gone so I create part
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of a person I don’t know that’s why I’ve never looked back and said I wish at
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least in business I wish I had done that I wish I had done this and not that
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whatever that I’ve never looked back that way
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on support of scientific research primarily basic science but not
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completely because we have a large autism project which involves a lot of
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basic science but but treatments are a goal at the rest the support of
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mathematics physics computer science biology of all sorts neuroscience
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genetics we support basic science and that what we like to do there’s a
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certain amount of outreach we have a better America Pro week we spend maybe
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10 or 15 percent on outreach region education but a 85% is supporting basic
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basic science you put a lot of money into mathematics are you are you got
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some right to comment on how are you feeling about it
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oh I think mathematics is bob is really going quite well
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worldwide the research but a lot of new ideas are coming up new fields short of
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a flourishing it feels like a pretty healthy enterprise to be what’s not
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healthy is the state of mathematics education in a country that’s very
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unhealthy for young people that’s why we have started this thing called math for
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America so on but we don’t have enough teachers of mathematics you know it and
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you know the subject and even if science and and that’s it for a simple reason
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thirty forty years ago if you do show mathematics enough to church and high
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school than 12 million other things you could do with that knowledge oh yeah
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maybe you could become a professional but let’s suppose you’re not quite at
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that level but you you’re good at math and so being a math teacher was a nice
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job but today if you know that much mathematics you get a job at Google he
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got a job at IBM you get a job at Goldman Sachs I mean there’s plenty of
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opportunities that are gonna pay more than being a high school teacher right
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now what so many when I was going to high school
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such things so the
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quality of high school teaches has declined simply because you know enough
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to teach in high school you know enough to work with Google and while I’m not
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gonna pay that much in high school so how do you read rest that how do we
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address that as a country you have so we work a person works for a combination of
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financial reward and respect right so a guy become Supreme Court justice is not
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doing it because the tobacco fortune will be well paid I suppose but you know
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just as everyone says it’s a big deal you have a lot of respect and you
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respect yourself so there are many so you can’t pay let’s say high school
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teachers of math as much as they would get a Google but you can give them a
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bumper pay them or we give people $15,000 you more than they would make
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the regular salary but we also create a community math and science teaches which
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they love and it makes them feel important and they are important to you
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give your money to basic research because you feel somehow indebted to it
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for your own success or do you do it just out of luck a belief or what do you
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do you feel like you’re giving something back to us
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gave something to hear that question i do it because it feels good I like
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science I like to see it flourish I like to be around scientist’s I like to learn
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new things my wife feels the same way she loves science so we’re very happy to
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to do this do I feel I’m giving back especially
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you know I could give back in a lot of ways I don’t think I could do be such a
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port side do you have a favorite number seven next question do you have a
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favorite mathematician well archimedes and Oyler my current favorites but maybe
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you met somebody very impressive those two day thank you so much for so much of
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your time
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well this was kind of fun
