WSJ Article on Jim Simons: Pioneering Fund Stage Second Act

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guruek
Mar 16, 2010
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Wall Street Journal this morning published a detailed article on Jim Simons and his firm Renaissance Technologies LLC. The article is entitle Pioneering fund Stages Second Actand was written by Scott Patterson and Jenny Strasburg.


GuruFocus tracks the portfolio of Renaissance Technologies. As of December 31, 2009, our data shows that Jim Simons owns a total of 3023 stocks that worth $26.16 billion. Not only the number of stocks is beyond humanly possible to know anything in detail about them, the firm also use computer to perform most of the trading with minimum human interaction. According to the WSJ article, the firm often holds positions for a few minutes or even seconds, so a year-end slap-shot probably does not add much value to individuals who subscribe to the concept of investing as defined by Ben Graham.


But defying Ben Graham does not stop Jim Simons from profiting handsomely: The firms flagship fund Medallion Fund returned about 45% a year after fees since its inception in 1988, beating the return of our much-adored Warren Buffett . Since 1995, Medallion fund had only one money-losing quarter, slipping 0.5% in the first quarter of 1999. Medallion is closed to new investor.


The other two funds of the firm that are open to investors have somewhat longer holding period (days instead of minutes of seconds) but posted less impressive investment results, causing investor to pull out their money recently.


Jim Simons has since stepped down as chief executive in January 2010, leaving the helm to his two lieutenants: Peter Brown and Bob Mercer. Much of the WSJ article is focused on how the firm is going to regroup in face of investor exodus from the two newer funds.


For those who are ambitious enough to follow the moves of Jim Simons , here is the WSJ article link to Pioneering fund Stages Second Act (subscription required). Good Luck!


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