RIP, Jim Simons

The founder of Renaissance Technologies died last week at age 86. May 13, 2024 [WEBSITE]( | [UNSUBSCRIBE]( RIP, Jim Simons SEAN RING Dear Reader, It’s perfectly understandable if you were wondering what all the fuss was about over James Simons’ death. He didn’t court attention like Buffett and Soros. He just performed. There may be ten interviews you can find of Simons on the internet. Simons just wasn’t interested in promoting himself. But his is one of those names you need to know if you’re investing in the financial markets. That’s because Jim Simons didn't just invest, he revolutionized the very concept of investing with his groundbreaking quantitative approach. Simons was a man of many talents and achievements. He was a mathematician, code breaker, professor, hedge fund manager, and philanthropist. His diverse career showcased his exceptional intellect and his ability to excel in multiple fields. He didn’t do it Wall Street’s way, either. Simons only hired the most intelligent people he could - Renaissance Technologies, his firm employs over 100 PhDs - to unravel the mysteries of the markets. And we’re talking hard math, physics, and engineering PhDs, not economists. Simons’ Medallion Fund returned on average 39.2% annually for 30 years after fees. And it’s not like he didn’t charge people. Medallion’s fees were 5% for end-of-year assets under management (AUM) and a 44% performance fee. Most hedge funds charge 2% and 20%. It’s a fabulous record. Credit: [@scalptrading]( What Happened? James Harris Simons, the visionary mathematician and investor who revolutionized the world of finance with his groundbreaking quantitative approach, passed away on May 10, 2024, at the age of 86. Simons' remarkable journey, marked by his exceptional intellect, innovative spirit, and commitment to philanthropy, left an indelible mark on the financial landscape. The Start Born April 25, 1938, in Brookline, Massachusetts, Simons demonstrated an early affinity for mathematics. He was the son of a shoe factory owner and a homemaker and grew up in a middle-class family. He pursued his passion at the Massachusetts Institute of Technology (MIT), where he earned a bachelor's degree in mathematics in 1958. His academic excellence continued at the University of California, Berkeley, where he received his PhD in mathematics in 1961 under the supervision of celebrated mathematician Bertram Kostant. [Are You Missing Out?]( Our records indicate you are not receiving the most profitable recommendations from our leading analyst. Don't miss the next opportunity to double your investment in just 24 hours. [>> Act now <<]( [Click Here To Learn More]( Codebreaker During the Vietnam War, Simons worked as a codebreaker for the National Security Agency (NSA), utilizing his mathematical prowess to contribute to the war effort. However, his opposition to the war led him to resign from his position at the Institute for Defense Analyses in 1968. This period showcased Simons' technical expertise and highlighted his strong moral convictions. Academics Simons' academic career was marked by his professorship at MIT, Harvard University, and Stony Brook University, where he chaired the mathematics department. His teaching tenure was interspersed with research stints, including his work at the Institute for Defense Analyses. During this time, Simons developed the Chern-Simons form, a significant contribution to the field of mathematics that combined geometry and topology with quantum field theory. He also made significant advancements in number theory, particularly in the area of prime numbers, which have had a profound impact on cryptography and computer science. Fund Management In 1978, Simons founded Monemetrics, a hedge fund that laid the groundwork for his future endeavors. He soon realized that pattern recognition, a concept he had studied extensively, could be applied to trading in financial markets. This epiphany led him to develop a system based on quantitative models, which would become the hallmark of his investment strategy. In 1982, Simons founded Renaissance Technologies, a hedge fund that would become one of the most successful in history. Renaissance Technologies' flagship Medallion Fund, known for its “black box” strategy, was only open to the firm's owners and employees. This secretive approach, which relied entirely on quantitative analysis and algorithmic investment strategies, earned Simons the moniker' Quant King.' The 'black box' strategy refers to the fund's use of complex mathematical models and algorithms to make trading decisions, with the specific details of these models kept confidential. Under his leadership, Renaissance Technologies managed an impressive $55 billion in assets as of 2022, with the Medallion Fund alone worth $10 billion. Philanthropy His philanthropic endeavors matched Simon's success in the financial world. In 1994, he co-founded the Simons Foundation with his wife, Marilyn, to support research in mathematics and fundamental sciences. The foundation has been a significant benefactor to Stony Brook University, MIT, and the University of California, Berkeley, funding numerous research projects and academic initiatives. It has also contributed significantly to autism research and education initiatives, supporting the development of innovative treatments and educational programs. In 2023, the Simons Foundation donated $500 million to Stony Brook University, the second-largest gift to a public university in American history, furthering its mission to advance scientific research and education. Simons' commitment to education and mathematics was further demonstrated by his founding of Math for America in 2004, an organization encouraging mathematics and science teachers to remain in their roles and advance their teaching abilities. His philanthropic efforts have profoundly impacted the academic community, fostering a culture of innovation and discovery. Awards Throughout his life, Simons received numerous accolades for his contributions to mathematics and finance. In 1976, he was awarded the Oswald Veblen Prize, a prestigious honor in the field of mathematics that recognizes outstanding research, for his work on geometric topology. In 2016, the International Astronomical Union named an asteroid, 6618 Jimsimons, in his honor, a testament to his significant contributions to both mathematics and finance. At the time of his passing, Simons' net worth was estimated to be $31.4 billion, making him the 51st-richest person in the world. Wrap Up Jim Simons' legacy extends far beyond his financial success. His quantitative approach revolutionized the investment industry, inspiring a new generation of investors and mathematicians. His philanthropic efforts have supported groundbreaking research and education initiatives, leaving a lasting impact on the world of mathematics and beyond. As the financial community mourns the loss of this visionary, his contributions will continue to inspire and influence the world of finance and mathematics for generations to come. And now you know what all the fuss is about. Have a great week ahead! All the best, Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… Major Miners SEAN RING When I had a conversation with the renowned Rick Rule last week, he shared an intriguing insight. He pointed out that central banks were essentially hosting a gold party, and when retail investors eventually wake up from their slumber, it could propel gold and silver to unprecedented heights. It's important to note that Rick’s analysis is not based on mere speculation, but on simple mathematics. He suggests that gold could potentially reach a staggering $8,000 to $10,000. His rationale is straightforward: the historical average portfolio holding of gold is 2.0%, but it’s currently a mere 0.5%. Therefore, a return to the mean, or the average, could quadruple the gold price from its current level. And how will that mean reversion happen? When retail buyers return to gold. (And silver, too, but we’ll get to that later.) If you’re a Strategic Intelligence subscriber, you’d have seen that yesterday, my esteemed colleague Jim Rickards wrote, “I have updated my forecast that gold will move past $25,000 per ounce by 2026 or sooner. That’s not a guess; it’s the result of rigorous analysis.” Jim continues: U.S. M1 money supply is $17.9 trillion. (I use M1, which is a good proxy for everyday money). What is M1? This is the supply that is the most liquid and money that is the easiest to turn into cash. It contains actual cash (bills and coins), bank reserves (what is actually kept in the vaults), and demand deposits (money in your checking account that can be turned into cash easily). The total amount of official gold the U.S. has is 8,133 metric tonnes. That equals 261.5 million troy ounces. One needs to make an assumption about the percentage of gold backing for the money supply needed to maintain confidence. I assume 40% coverage with gold. (This was the legal requirement for the Fed from 1913 to 1946. Later it was 25%, then zero today). Applying the 40% ratio to the $17.9 trillion money supply means that $7.2 trillion of gold is required. Applying the $7.2 trillion valuation to 261.5 million troy ounces yields a price of $27,533 per Troy ounce of gold. That’s the implied non-deflationary equilibrium price of gold in a new global gold standard. To paraphrase my favorite fictional libertarian Ronald Ulysses Swanson, just reading, copying, and pasting that gave me a semi. Anyway… Right on cue, the Twitterverse (or X-verse, now?) erupted with a bunch of charts I’ve collected and curated for your edification. If you’re already long gold and silver, this will only enhance your confirmation bias. Your FOMO (Fear Of Missing Out) bells will ring if you're not. We’ll start with the fear trade (gold) and move on to the greed trade (silver). Gold First, let’s start with Northstar Charts. This chart shows what we already know. At first, Gold kept bumping its head on the overhead $2,000 resistance. In a reverse of polarity, that resistance, once broken, became support. Now, it looks like gold will remain above $2,000 for good. (Though Northstar cautioned we may get an ugly move to $1,900 or so before we recover. Credit: [@NorthstarCharts]( Next, Jesse Colombo looks at gold’s current bull flag pattern. From StockCharts.com’s Chart School: Flags are short-term continuation patterns that mark a small consolidation before the previous move resumes. These patterns are usually preceded by a sharp advance or decline with heavy volume, and mark a midpoint of the move. Importantly, it’s a consolidation and continuation pattern. That means it’s taking a breather before resuming its uptrend. Credit: [@The BubbleBubble]( Let’s move on to silver. Silver Tavi Costa is usually excellent. I’ve followed him for years. Here, he writes about why silver is so important. Then, he shows a chart of the silver price and explains why he thinks we’re heading up from here. (Hint: it’s another bull flag, similar to gold’s.) Credit: [@TaviCosta]( Next, venerable trader Peter Brandt shows another chart pattern, known as an area island or island reversal pattern. Again, from StockCharts.com: An island reversal is a reversal pattern that forms with two gaps and price action in between the two gaps. These gaps tell us that the island reversal marks a sudden, and sharp, shift in direction. Even though they are relatively uncommon, island reversals are potent patterns that warrant our attention. Credit: [@PeterLBrandt]( Notice how silver reversed course after the island reversal. Next, onto the main event: the miners. [Elon Musk’s NEXT Billion-Dollar IPO Revealed by the end of 2024?]( First, Paypal’s IPO made him a multi-millionaire… Then Tesla’s IPO made him a billionaire… Now, his NEXT big IPO could make him a TRILLIONAIRE. And for anyone who knows how to follow Musk as he potentially takes this new company public… The gains could be life-changing. [Click here to find out how](. [Click Here To Learn More]( The Miners In this chart, Northstar shows the tremendous gap between gold (black line) and the gold miners (orange line). Northstar writes, “When gold breaks out versus the CPI, the miners should do very well.” The miners, indeed, have much catching up to do! Credit: [@NorthstarCharts]( Next, Peter Brandt points out all the bull flags in the gold and silver miners and gold and silver junior miners. Credit: [@PeterLBrandt]( Finally, Don Durrett, who runs Gold Stock Data, gave out his four favorite silver miner stocks on X. Credit: [@DonDurrett]( Don also posts videos on YouTube. His latest analysis of [24 Large Cap Gold/Silver Producers]( is worth watching, especially if you’re after new tickers to invest in! Wrap Up I’m loathe to sound like other newsletter writers who tell their readers, “You must act now! If you don’t, you’ll lose out forever!” But I genuinely believe it’s the time of the precious metals and their miners. I hope you participate in this exciting opportunity, as your involvement is crucial in creating the life you want for you and your family. You deserve it! Have a great weekend. All the best, Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. 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