Now that I’ve read Gregory Zuckerman’s The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution, it’s clear to me that people were Jim Simons’s greatest asset.

Massive losses from investments based on Simons’s judgment were crushing in Renaissance Technologies’ first year or two. Simons was forced to clarify his mission. “I don’t want to have to worry about the market every minute. I want models that will make money while I sleep,” Simons said. “A pure system without humans interfering.”

Simons was brilliant but couldn’t build this system himself; he didn’t have the skills to build the models that would power it. He needed to recruit people who could. So, how did he find the right people for this seemingly impossible mission?

Spotting

When Simons was working at the Institute for Defense Analyses (IDA), peers noticed that he had a gift: “His ability to identify the most promising ideas of his colleagues was especially distinctive.”

“He was a terrific listener,” one person said. “It’s one thing to have good ideas; it’s another to recognize when others do . . . . If there was a pony in your pile of horse manure, he would find it.”

In short, Simons had an eye for great ideas. He recognized them even before the person with the idea realized what they had. Simons would leverage this strength in recruiting his team.

Talent Pools

After working at IDA and Stony Brook University, Simons maintained relationships with these organizations—shrewdly, given the exceptional mathematical abilities of their people. He kept his contacts up to date with what he was working on at RenTech and how things were going. He inquired about what others were working on and who seemed promising. He also acted as a conduit, connecting people who could help each other. He stayed top of mind at IDA and Stony Brook and kept a finger on the pulse of these organizations.  

Simons strategically assembled a team that could build the “pure system” he envisioned. He leveraged his natural strength in spotting great ideas and his relationships with organizations with talented mathematicians.

“He told one Stony Brook professor, Hershel Farkas, that he valued ‘killers,’ those with a single-minded focus who wouldn’t quit on a math problem until arriving at a solution.”

When Simons found someone with the rare combination of killer persistence, great ideas, and original thinking, he aggressively recruited them to RenTech.

It was a slow and winding journey, but it eventually paid off. Simons assembled a team that slowly created the model that would power a highly profitable trading system that didn’t require human intervention. RenTech’s outsize and consistent investment returns enabled Simons to build a personal fortune exceeding $30 billion. And he had control of his life and a company where he felt at home and could be himself.

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