Renowned as one of the most accomplished investors in history, Jim Simons, known for employing quantum mathematics to inform his stock market decisions, has sadly passed away.
Jim Simons’ legacy lives on in the Medallion Fund, a hedge fund that has consistently outperformed the market, delivering exceptional annual returns averaging 66%. An outstanding performance has positioned the Medallion Fund as one of the top performers in the financial world.
Due to the astonishing annual returns, Finbold calculated how much an investment worth $10,000 in Medallion Fund at its foundation in 1988 would be worth now, almost 30 years later.
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Medallion Fund trumps the returns of S&P 500 and Berkshire Hathaway
The S&P 500, often used as a benchmark for performance, has seen an average annual return of 10.22% over the past 30 years. The 30-year average stock market return is 7.5% adjusted for inflation, including dividends.
Berkshire Hathaway (NYSE: BRK.A), led by the renowned Warren Buffett, takes a traditional approach to investing, focusing on company fundamentals. Over the years, it has achieved an average annual return of 20%.
To put this into perspective, if $10,000 were invested in the S&P 500 and Berkshire Hathaway in 1988, it would have grown to $400,000 and $1.5 million, respectively, by 2024.
Comparing the returns of the Medallion Fund with other investment options, it’s clear that the Medallion Fund has outshined them all. If the same $10,000 were invested in the Medallion Fund in 1988, it would have grown to a staggering $420 million today, a return that surpasses even the most successful investments in the market.
How did Jim Simons do it?
Mr. Simons, renowned for his groundbreaking contributions to mathematics, quickly shifted his focus to maximizing financial gains.
At 40, he established Renaissance Technologies, rejecting conventional wisdom by employing mathematicians and scientists instead of financial experts.
Equipped with cutting-edge technology, his firm, particularly the Medallion Fund, generated over $100 billion in trading profits since its inception in 1988.
