Me and Jim Simons, the "Elvis" of Hedge Fund Managers

With an income of $1.7 billion, James Simons, of Renaissance Technologies, topped the list of the 25 highest paid hedge-fund managers in 2006. This according to an article published last year in Alpha magazine. I met Jim Simons 40 years ago, during an earlier incarnation of him, when he was a Ph.D. mathematician, and a very good one at that. Simons had worked for a time at the Institute for Defense Analysis (IDA) in Princeton, NJ, but he had quit that job by the spring of 1968.

At the time I was an Assistant Professor in the Mathematics Department at S.U.N.Y., Stony Brook, on Long Island. (Now the University at Stony Brook) I had joined the department after getting my Ph.D. in 1966. In those days Stony Brook was "on the make", and I along with others served as "warm bodies," people who could get the job done until being replaced by someone better. One thing the department lacked was a "name" chairman, whom they kept trolling for.

Simons was interviewed in the spring of 1968; he was offered, and accepted, the chairmanship, (The joke at the time was that we had a better than average chance of landing him, since he was at the moment out of a job.) and he succeeded in building up a very strong department. A few anecdotes:

Simons had a droll sense of humor. In one departmental meeting we were discussing what role students should have in running the department. Ever the mathematician, Simons decided to start with the first grade and work his way up. He said, "Well we can all agree that first graders should not be running the first grade," to which my good friend and fellow "warm body", Hugo d'Alarcao, responded, "Why Not?"

I had become friends with another mathematician, Barney Glickfeld, as we worked in the same field. He was a very humorous fellow. Glickfeld had taught at the University of Washington, but that job was ending and he was hunting for a new one. At some point, I arranged for him to have an interview with Simons. As Barney told it, the interview was short and to the point.

Simons: Are you fantastic?
Barney: No, but neither are you.
Simons: That's true, but I'm the chairman.

During the academic year '69-'70, I rented a house that was near Simons' home. I was non-renewed in the spring of 1970 (to be effective a year later). One day, before I was officially given the boot, he gave me a ride home, and he commented "Gee, that's a nice place. I hope we can keep it in the Department."

I didn't take well to my non-renewal. I could have stayed for the academic year '70-'71, but I decided instead to accept a visiting position at Kansas State University. In the summer of 1970, as I headed to KSU, Hugo d'Alarcao and I drove to the Southwestern U.S. While driving through Kansas, we stopped at Dodge City. I bought a postcard with a picture of "Boot Hill", which Hugo and I signed and mailed to Simons with the inscription "Wish you were here!"

The last time I saw Simons was at a mathematics convention in San Antonio in 1980. He had won a prize, and as he accepted it he made some funny remarks. As he opened the envelope with the check, he said something to the effect that, "Last night in New York before flying down here, I thought that it would be OK to tell some friends that I had won this prize, and I asked them, 'How much is it for? How much money comes with it?' And no one seemed to know." "I guess we'll leave that as an open question." he intoned, as he put the check back in the envelope. After the Awards ceremony, I went down to the front of the auditorium, congratulated Simons and shook his hand. He seemed a bit taken aback, I guess because of the "Wish you were here" business. But hey, he deserved the award. And what are "warm bodies" for anyway, if not to be dispatched when the time comes?

I knew that Simons had gone into the money-making business in the early '80's and had eventually left mathematics (as a vocation, but not as an object of philanthropy), taking several other mathematicians with him. But I had no idea of the extent of his success until I read an article last year in the New York Times that quoted the article in Alpha magazine referred to above. I tried without success to get his email address. (I could try "snail mail", but that's so "Twentieth Century.") If I could send him an email message, here is what I would say:

Dear Jim:
Congratulations on being a mega-billionaire. Have you ever considered paying "reparations" to all those "warm bodies" you dispatched while building up the department at Stony Brook? (Just kidding!) Best wishes for your continued success, and in the meantime, don't be a hedgehog.

Articles cited:
"Alpha Profiles the Top 25 Moneymakers," Alpha Magazine, 20 April 2007.
"Economic Scene: A Career in Hedge Funds and the Price of Overcrowding," Robert H. Frank, New York Times, July 5, 2007.