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
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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
