QUOTE OF THE DAY

Let me give you an example of a successful idea. When I was at Stony Brook, a distinguished mathematician, Prof. James Simons, who was the chairman of the mathematics department and is 15 years younger than me, went to Wall Street around 1980s and became a billionaire. He is currently one of the leading hedge fund managers in the world. So I asked him: “What is the secret of your success as a fund manager?” He said, “Usual fund managers would look at stock information every day and formulate their speculations about the future.” He added,“That is not enough, I need massive data.” So he hired around 50 PhDs in physics and mathematics working for him. They all collect information, not daily, not hourly, but every five minutes. One of them may be specialising in energy stocks, and he would collect information for energy stocks every 5minutes. Others do it similarly for chemical stocks. It is out of that massive amount of information that they perceive certain patterns. They had seminars like physics seminars and one of these PhDs may say, “I see certain patterns”, and they would discuss it and arrive at a majority view. If these patterns were likely to be correct, they would make a massive investment into that particular stock. It was a new kind of analysis using massive amount of data and mathematical theories.

-- Yang Chen-Ning