Medallion Fund Literally Printed Money In The Last 30 Years
We all know that the secret to getting insanely rich is to accumulate assets and avoid liabilities. The difficult part is knowing in advance which asset gets us there faster.
Before the technology boom, some may have picked San Francisco Real Estate and gone all in; enabling them now to do a Cash Out Refinance. Others may have picked a relatively unknown asset like Bitcoin before it’s meteoric rise.
There are several success stories involving real estate, collectibles and other assets which are not liquid or do not have a large trading market.
Who Owns Renaissance Technologies?Renaissance Technologies was founded by Jim Simons; a former Cold war code breaker and a famous mathematician. He is known in the scientific community for co-developing the Chern–Simons theory.
Simons and algebraist James Ax started a hedge fund and named it Medallion in honor of the math awards that they had won. The Medallion fund used mathematical models to explore correlations from which they could profit.
DataSince the early days, Renaissance has been collecting and curating vast data archives of everything. From economic metrics to the weather to trading sentiment and a million other variables. The interaction between these wide data sets and the direction of the security movement forms the base of their secret sauce.
Strategy
Medallion’s strategy involves holding thousands of short-term positions, both long and short, at any given time. The fund makes high-frequency trades, but has also held positions for up to one or two weeks.
Algorithmic TradingThe Medallion Fund has employed mathematical models to analyze and execute trades, many of them automated. The firm uses computer-based models to predict price changes. These models are based on analyzing as much data as can be gathered, then looking for non-random movements to make predictions.
How Big Is Medallion fund?
The Medallion fund manages roughly $10 billion in assets. The secret to their outperformance also lies in the fund size. They have never let the fund get too big. Whatever profit they make, is paid out. This enables the firm to stay small and nimble.
How Do I Invest In Medallion fund?
If you are wondering how to invest in the Medallion Fund, the bad news is that you can’t.
The Medallion fund has been closed to outside investors since 1993 and is available only to current and past employees of Renaissance Technologies and their families.
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