Gregory Zuckerman: How Jim Simons Produces Massive 66% Annual Returns

ValueWalk’s Raul Panganiban interviews Gregory Zuckerman, the author of “The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.”

Interview with Gregory Zuckerman

Transcript

Hello podcast listeners. Today’s a very special episode with Gregory Zuckerman. He’s a 23 year vet at Wall Street Journal. He’s also the author of “The Frackers,” “The Greatest Trade Ever,” and his most recent book that’s coming out soon, “The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.” Greg is a graduate of Brandis University with a BA in politics and economics. And for Wall Street Journal, he was a reporter and New York Post and Investment News Digest. In today’s episode, we discuss his recent book on Jim Simons. And I want to welcome Greg to the show, and I want to welcome our listeners to a very special episode.

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Welcome to ValueTalks with Raul.

So just wanted to welcome my listeners to a very special episode as a Gregory Zuckerman, writer and Wall Street Journal author of The Greatest Trade Ever, The Frackers and the most recent book now The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution. Gregory, welcome to show.

Oh, great to be here.

All right. Yeah, if you can just begin with your background and what led you to a career in journalism?

Sure, I’m a guy who grew up reading about markets, I love with finance, loved investing, I lost all my bar mitzvah money, not that I had much but I was trading stocks like in camp and found a broker and reading and had my counsellors go get me barons on days office like that. So I was always pretty obsessive about markets, and finance. I’m not sure why my father was an academic. My mother didn’t know too much. So I just had this interest, though. I graduated from a good liberal arts school and went to go work on Wall Street and I couldn’t even get an interview, let alone a job. I didn’t really know anyone. I did well in school, but I know background I would spend summers like working in camps, and didn’t really have an experience. That was a bad time. No one was hiring at the time. It was just bad compliment to things. So I did a few different things and I got fired from them. And I stumbled into journalism. I was like, Wait, hold on a second. They’re gonna pay me to write about this world I love and read about and how much fun is that directly going to pay me to learn about finance and investing in Wall Street so I stumbled into the career I should be doing I really didn’t have the temperament to be a trader and try to be a Great Investor myself, but I do like meeting these people and writing about them and learning from them. So I really kind of stumbled into it and I started a little financial newsletter and went to the New York Post and then I got the journal in 1996 so I’ve been here ever since.

Oh nice, very nice. And if you can just tell me what was the inspiration behind this book and why did you want to write about Jim Simon story?

Sure, so I’ve been at the Journal 23 years and this is the untold storey the Jim Simon story and Renaissance. I wasn’t interested in myself I was curious how the heck did they do it? I mean we all heard of these returns we all heard of him and his people and they’re fascinating group forget about just investing just as characters are fascinating. They do math background, the science background what these individuals have accomplished. Simons and others you know, be even before Renaissance and after Renaissance their philanthropy into science and code breaking when it comes to Simon. So these are really interesting personalities. What’s the storey I always wanted to understand and learn myself read about and know written it, so I thought I’d take it on.

Nice. And then as you’re preparing for this project, what was the general sentiment? And you mentioned in the beginning that Jim didn’t even want you to write this book.

Yeah, this was the hardest thing I ever did in my life. There were months early on, when I wasn’t sure I could pull this off. I had a book contract, but I didn’t cash the advance you get, even though I could use the money. But I didn’t want to cash the check because I wanted the ability to hand it back to the publisher if I couldn’t do it. So there was a good six months where I was just concerned that I wouldn’t be able to pull this thing off because they’re the most secretive firm out there. They deal in concepts, mathematical concepts that I wasn’t sure I could a) understand, but b) be able to transmit the reader in an enjoyable fashion. I, you know, I write nonfiction narratives, I write storeys, about people, and you have to make it something that’s accessible to every reader. And it’s one thing to sort of understand what he’s doing but another thing to write it in a fashion that, you know, you want it to be a page turner, you want something that the average person, not just a wall street person, but everyone can read, you work really hard on these things. I mean, I literally was doing these all nighters in really killing myself. So if you’re going to put that much work into it, you want people to read it. And if you want people to read, it’s got to be in a fashion. That’s more than a polemic. Baris saying, Greg, why don’t you write about Trump this or why about this idea? I could but people wouldn’t read it. You want to don’t wave people are going to really pick up the book is if it’s fine, if it’s enjoyable, if they can learn, you want them to learn clearly from the book, but it should be a fun read, too. So I was concerned I wouldn’t be able to pull this thing off. So, yeah, it was, it was a