Jim Simons, math genius who conquered Wall Street, dies at 86

RIP legend.

My favorite description of his crazy returns and the power of compounding comes from the 'Psychology of Money':

"Think of this another way. Buffett is the richest investor of all time. But he’s not actually the greatest—at least not when measured by average annual returns.

Jim Simons, head of the hedge fund Renaissance Technologies, has compounded money at 66% annually since 1988. No one comes close to this record. As we just saw, Buffett has compounded at roughly 22% annually, a third as much.

Simons’ net worth, as I write, is $21 billion. He is—and I know how ridiculous this sounds given the numbers we’re dealing with—75% less rich than Buffett. Why the difference, if Simons is such a better investor?

Because Simons did not find his investment stride until he was 50 years old. He’s had less than half as many years to compound as Buffett.

If James Simons had earned his 66% annual returns for the 70-year span Buffett has built his wealth he would be worth — please hold your breath — sixty-three quintillion nine hundred quadrillion seven hundred eighty-one trillion seven hundred eighty billion seven hundred forty-eight million one hundred sixty thousand dollars."

PS: Ofc his wealth couldn't grow that much because their fund was capped, and they returned the money to investors instead of compounding it ad infinitum. Plus, there's not that much money in the world. But it's still a great mental experiment to understand how crazy their returns were.