Jim Simons.

66% annual returns.

Every. Single. Year.

$100 invested in his Medallion Fund in 1988 would have grown to about…

According to my back-of-the-napkin math…

$42 million—after the ginormous fees—by 2018.

(No, you can’t invest. The fund is closed. Sorry.)

Craziest part…

Simons (RIP) wasn’t a Wall Street guy. He was a mathematician.

Not the type that counted tips at a diner. The kind that co-developed groundbreaking things like the Chern-Simons theory…

Which sounds like something out of a sci-fi novel but is actually the foundation of string theory.

And he changed everything.

Guts, Greed, and Getting “Lucky”

See, before Simons, the stock market existed largely as an old boys’ club.

The kind of place where guys in suits swung their canes when they talked and pretended they had "gut instincts."

In reality, the guys actually trading on gut instincts were (figuratively and sometimes actually) lighting cigars with $100 bills.

The guys making real money from the markets? They were getting “lucky” from grapes dropping from the vine.

The kind of grapes that mysteriously fell into their laps—like a whispered government contract or an upcoming merger.

Though, of course, insider trading still happens to this day…

Ivan Boesky—yes, the fellow who inspired Gordon Gekko in Wall Street—embodied the climax of this relatively-unfettered era of… let’s say… “grape discovery.”

This era hit its pinnacle during a 1986 commencement speech at UC Berkeley’s business school, when Boesky told graduates:

"Greed is all right, by the way. I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself."

(Just a few months later, Boesky was arrested for insider trading and fined $100 million—at the time, the biggest SEC penalty in history. After that, the SEC actually started to crack down on insider trading.)

Around the same time, this guy Simons came along with a radical idea: What if, instead of getting “lucky,” we used math?

But hold on. Let’s go back.

Because it takes more than genius to make it in this game—and with his kind of brain.

How Newton Got Ruined

Isaac Newton.

One of the smartest men who ever lived. Basically invented physics.

And yet, in 1720, he got wrecked in the stock market.

Don’t feel sorry for him.

Newton was rich.

He was the Master of the Royal Mint (basically the head of the British economy).

But he got caught up in the hype of the South Sea Bubble, a scam so bad it makes FTX look like a neighborhood dog park scandal.

Newton invested early. Doubled his money. Cashed out.

Smart.

But then he watched the stock go higher.

FOMO kicked in. He jumped back in—this time at the peak.

Not smart.

The bubble popped. He lost a third of his fortune.

His famous quote after this financial faceplant:

"I can calculate the motions of the heavenly bodies, but not the madness of people."

Boesky had his cigar bars. Newton had a gut instinct. Simons had an equation.

I bet you can guess where I’m going with this.

Where the Wild Gains Are

Simons wasn’t interested in gut feelings or stock tips.

He built Renaissance Technologies on one simple principle: Find patterns in the noise.

He hired physicists. Statisticians. Codebreakers. People who had zero finance experience but knew how to find hidden signals in massive amounts of data.

He broke the mold, and to no shortage of controversy.