I get all the data from the following web sites: http://www.forbes.com/lists/2005/54/5GZ7.html http://www.turtletrader.com/trader-simons.html http://en.wikipedia.org/wiki/James_Harris_Simons http://en.wikipedia.org/wiki/Renaissance_Technologies http://www.finfacts.com/irelandbusinessnews/publish/printer_1000article_10005996.shtml If memory serves, the inception time for Medallion Fund was late 1988. It may be the reason that most people cited the annual performance of this fund starting at 1989. You may be able to find more updated information by using GOOGLE. Just search for the keywords: James Simons Medallion
Being an old man, I have a bad memory The inception time for Medallion Fund was March 1988. Should double-check by using Google, before opening my big mouth.
The "leverage" comes from getting more profits with less investment. More profits since you are investing other people' money, and not providing all the investing capital yourself. Less investment since your investment is only the cost to run an office. Most hedge-funds have small offices with less than 10 employees.
Much of what Simons says in interviews is misdirection, pure and simple. His public statements are rife with contradictions, obfuscations, inside jokes, and nonsense. Rentec is VERY secretive. You can't rely on what you can find out with a Google search. Yes, as Axcom run by Elwyn Berlekamp. Berlekamp did not sell his interest to Rentec until Dec 31, 1990. Berlekamp, C. Shannon's reseach assistant, was the brains behind the funds trading style. At that time Simons was running longer term factor models (fundamentals) in his main fund, which I think was called Limroy. That fund started before Rentec, in 1978 and then after Axcom changed to Medallion, you never heard of it. That happens to a lot of Simons' funds. The mortgage fund was called Matrix. Besides Equimetrics, there was a long/short fund that ran from 1995 to 1998 I think, and then was folded. There was a venture cap fund started right at the exact peak of the tech boom. Where is that one now? And don't forget the internal fund-of- funds, for which Simons claimed higher risk-adjusted returns than for Medallion itself. The list goes on... Axcom/Medallion started at 20% incentive, not 44%. The high fees came later, when it could barely be called a public fund. It has been closed to new money since 1993, and the last of the outside money was given back at the end of 2005. .
If you want your lies straight from the horse's mouth, instead of via Google, the man himself is giving a talk in Paris this coming Wednesday evening. I see you are in NYC. Paris is a short flight. This venue is where he has dropped the best hints in the past, maybe because so few of his local rivals attend. .
Yes, the profits are bigger but they are splitted between all members in proportion to everyone's contribution. So where is the leverage? People didn't make Warren Buffet richer by giving him their money. On the contrary he made people richer by producing those returns for them.
I'm no expert on Buffet but I read that he traded a lot of covered calls on companies that he owned a big piece of and knew the management well.
I doubt that covered calls helped him boost his returns. He might have used them simply to smooth out the volatility.
I cut and paste the following statements from the web site: http://en.wikipedia.org/wiki/Renaissance_Technologies Renaissance Technologies is a hedge fund management company. Renaissance was started by Jim Simons in 1982. Its $6 billion Medallion Fund has averaged 37% annual returns, after fees, since 1989, and is considered in the industry to be the most consistently successful hedge fund, yielding returns ten percentage points higher than legendary investors Bruce Kovner, George Soros, or Paul Tudor Jones. If the above information were a complete lie, should SEC, Bruce Kovner, George Soros, Paul Tudor Jones, etc., have taken legal actions against Renaissance Technologies ? They should at least ask this web site to change the above statements. Is James Simons a close friend to all of them ? I believe what you said, (well maybe not 100% YET). But I am a little shocked.