quant / HFT

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<h3 style="font-style: normal; font-variant: normal; letter-spacing: normal; line-height: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px;"><span class="mw-headline" id="The_Las_Vegas_connection:_information_theory_and_its_applications_to_game_theory"><font size="4" face="Times New Roman"></font></span></h3><div><span class="mw-headline"><p times="Times" new="New" roman="Roman" font-size="font-size" large="large" background-color="background-color" rgb="rgb" style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font face="Times New Roman" size="4"></font></p><p times="Times" new="New" roman="Roman" font-size="font-size" large="large" background-color="background-color" rgb="rgb" style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font face="Times New Roman" size="4"><a href="https://www.alternet.org/2022/06/billionaire-tax/" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">https://www.alternet.org/2022/06/billionaire-tax/</a></font></p><p times="Times" new="New" roman="Roman" font-size="font-size" large="large" background-color="background-color" rgb="rgb" style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><b><font face="Times New Roman" size="4">S</font><a href="https://www.propublica.org/series/the-secret-irs-files" class="rm-stats-tracked" times="Times" new="New" roman="Roman" font-size="font-size" large="large" text-decoration-line="text-decoration-line" none="none" opacity="opacity" transition="transition" color="color" s="s" ease="ease" background="background" style="text-decoration-line: none; color: rgb(0, 51, 153); outline: none;"><font size="4" face="Times New Roman" color="#000000">eries: The Secret IRS Files</font></a></b></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><b>Inside the Tax Records of the .001%</b></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">One day in July 1985, three young men from Philadelphia, their lawyer and a burly Pinkerton guard arrived at a horse track outside Chicago carrying a briefcase with $250,000 in cash.</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman"><b>Running the numbers on a Compaq computer the size of a small refrigerator, Jeffrey Yass and his friends had found a way to outwit the track’s bookies, according to interviews, records and news accounts</b>. A few months earlier, they’d wagered $160,000, gambling that, with tens of thousands of bets, they could nail the exact order of seven horses in three different races. It was a sophisticated theory of the<b> racing odds, honed with help from a Ph.D. statistician who’d worked for NASA on the moon landing, and it proved right. They bagged $760,000, then the richest payoff in American racing history.</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);">But that summer day, when they presented their strikingly long list of bets at the track window, they were turned away. Their appeal to the track owner got them ejected. Yass, just 27, then sued for the right to place the bets. The track’s lawyer fumed to a federal judge that the men were trying to corner the betting market “through the use of their statistics and numbers.”</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman"><b>Yass lost, but that year he and his friends repeated variations of the strategy at horse and greyhound tracks around the country. Then they decided to turn their focus from a world of hundreds of thousands of dollars to a world of billions: Wall Street.</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman"><span style="background-color: rgb(255, 255, 102);">Four decades later, the firm he and his friends founded, Susquehanna International Group, is a sprawling global company that makes billions of dollars. </span><b>Yass and his team used their numerical expertise to make rapid-fire computer-driven trades in options and other securities, eventually becoming a giant middleman in the markets for stocks and other securities. If you have bought stock or options on an app like Robinhood or E-Trade, there’s a good chance you traded with Susquehanna without knowing it. Today, Yass, 63, is one of the richest and most powerful financiers in the country.</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);">But one crucial aspect of his ascent to stratospheric wealth has transpired out of public view. Using the same prowess that he’s applied to race tracks and options markets, Yass has taken aim at another target: his tax bill.</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);">There, too, the winnings have been immense: at least $1 billion in tax savings over six recent years, according to ProPublica’s analysis of a trove of IRS data. During that time, Yass paid an average federal incom<b>e tax rate of just 19%, far below that of comparable Wall Street traders.</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman"><b>Yass has devised trading strategies that reduce his tax burden but push legal boundaries. He has repeatedly drawn IRS audits, yet has continued to test the limits. Susquehanna has often gone to court to fight the government, with one multiyear audit battle ending in a costly defeat. The firm has maintained in court filings that it complied with the law.</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman" style="background-color: rgb(255, 153, 102);">Yass’ low rate is particularly notable because Susquehanna, by its own description, specializes in short-term trading. Money made from such rapid trades is typically taxed at rates around 40%.</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman" style="background-color: rgb(255, 153, 102);">In recent years, however, Yass’ annual income has, with uncanny consistency, been made up almost entirely of income taxed at the roughly 20% rate reserved for longer-term investments.</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman"><b>Congress long ago tried to stamp out widely used techniques that seek to transform profits taxed at the high rate into profits taxed at the low rate. But Yass and his colleagues have managed to avoid higher taxes anyway.</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman" style="background-color: rgb(255, 153, 0);">The tax savings have contributed to an explosion in wealth for Yass, who has increasingly poured that fortune into candidates and causes on the political right. He has spent more than $100 million on election campaigns in recent years. The money has gone to everything from anti-tax advocacy and charter schools to campaigns against so-called critical race theory and for candidates who falsely say the 2020 election was stolen and seek to ban abortion.</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">ProPublica has pieced together the details of Yass’ tax avoidance using tax returns, securities filings and court records, as well as by talking to former traders and executives. (<b>The former employees spoke on condition of anonymity, with many citing a desire to avoid angering Yass.)</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman"><b>Through a spokesperson, Yass declined to be interviewed for this article. The spokesperson declined to comment in response to a long list of questions for Susquehanna and the firm’s founding partners.</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">Gregg Polsky, a University of Georgia law professor and former corporate tax lawyer who was retained by ProPublica to review Susquehanna’s tax records, said the tax agency may have more to scrutinize. The strategies revealed in Yass’ records, he said, were “very suspicious and suggestive of potential abuse that should be examined by the IRS.”</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">More than 35 years after he was booted from the racetrack outside Chicago, Yass still lives to gamble. Not just on horses, but on poker and on the market. He sheepishly admitted, in a podcast discussion, that he has even placed wagers on his children’s sports games.</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman"><b>Asked to describe his approach to trading at Susquehanna, Yass once reached for a poker analogy. “If you’re the sixth-best poker player in the world and you play with the five best players, you’re going to lose,” he said. “If your skills are only average, but you play against weak opponents, you’re going to win.”</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">That philosophy along with, Yass freely admits, a lot of luck, has made him a billionaire many times over.</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">Compared to many of his fellow billionaires — he’s richer than Hollywood mogul David Geffen, retail brokerage king Charles Schwab and “Star Wars” creator George Lucas — Yass doesn't seem particularly interested in the trappings of extreme wealth.</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">Yass and his wife, Janine, raised four children in the leafy college town of Haverford, on the Main Line outside of Philadelphia. Their large but unremarkable house could easily be the home of a successful doctor rather than one of the richest men in the country. In his quarter-zip pullover sweater, Nikes and no-nonsense rimless glasses, he’d be impossible to pick out of a crowd at the suburban country club where he plays golf.</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">If Yass collects expensive art or maintains a megayacht, he has managed to do so in complete secrecy. What comes closest to an identifiable trophy asset is a house in the ultra-exclusive Georgica Association beach neighborhood of East Hampton on New York’s Long Island. Even that property, purchased for $12.5 million in 2005 and held through an LLC, is in an area known as “<a href="https://www.mansionglobal.com/articles/georgica-association-the-hamptons-special-and-exclusive-enclave-is-less-about-being-seen-204306" class="rm-stats-tracked" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none; opacity: 1; transition: color 0.25s ease 0s, background 0.25s ease 0s, opacity 0.25s ease 0s;">bucolic and understated</a>.”</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">Those who have worked with Yass say he lives less for spending money than for the competition of the market and the thrill of taking calculated risk. Yass softens any impression of ruthlessness by deploying a practiced humility and comedic timing. “<b>Some people like art history,” he once <a href="https://neckar.substack.com/p/the-college-friends-who-bet-their?s=r" class="rm-stats-tracked" style="text-decoration-line: none; color: rgb(0, 51, 153); outline: none; opacity: 1; transition: color 0.25s ease 0s, background 0.25s ease 0s, opacity 0.25s ease 0s;">explained</a>, “I like probabilistic analysis.”</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman"><b>Yet when it comes to his philosophical outlook, he eschews the jokes. He speaks of capitalism in religious terms. Making new markets, he likes to say, is a “mission from God.”</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">Like many religious stories, his begins with a conversion experience.<b> Born in 1958 to two Queens CPAs, Yass said reading the economist Milton Friedman’s “Capitalism and Freedom” as a young man delivered him from an early flirtation with socialism.</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">By the time Yass graduated from the State University of New York at Binghamton in 1979, he was already captivated by trading. (His father had also helped nurture Yass’ love of horse racing by taking him to local tracks to see harness racing, <a href="https://www.forbes.com/sites/antoinegara/2021/04/06/how-trader-jeff-yass-parlayed-poker-and-horse-racing-bets-into-a-12-billion-fortune/?sh=2521fa1c3eb5" class="rm-stats-tracked" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none; opacity: 1; transition: color 0.25s ease 0s, background 0.25s ease 0s, opacity 0.25s ease 0s;">according to Forbes</a>.) <b>Yass’ college thesis weighed whether the budding market in stock options could be justified as socially useful.</b> “I concluded that it should exist,” Yass later cracked. “I got a B.”</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman"><b>After college, he moved to Las Vegas for a year and a half to play poker professionally.</b> Then he returned to the East Coast and settled in Philadelphia, where <span style="background-color: rgb(255, 255, 102);">he began trading options. The previous decade had seen a<b> burst of academic interest in the financial instruments, including a pioneering model of how to more accurately price them. </b>Yass later called the model, and its broader implications for how to make mathematically sound decisions, “the most revolutionary idea in a long, long time.”</span></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">A share of stock is a relatively simple concept: It’s a small ownership stake in a company. <b>An option, by contrast, is a contract that confers the right to buy or sell a given stock at a particular price and time in the future.</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">Options attract mathematically minded traders since a complex set of variables, including the underlying stock price, volatility, time and interest rates, determine how much one of the contracts is worth.</font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman"><b>Options are a versatile tool. They can appeal to the risk-averse: </b><span style="background-color: rgb(255, 255, 102);">Traders can use them as insurance to guarantee they will be paid at least today’s price when they sell in the future. They are also useful to the risk-embracing — gamblers who want to place outsized bets on how a stock will perform</span>. <b>(Here’s how a speculator would use an option: In early June, shares of Netflix were trading at below $200. If the speculator thinks the company’s fortunes will improve dramatically this summer, they could pay just $4.50 each for options to buy the stock at $250 in mid-August. If the stock soars over that figure, they could make a mint.)</b></font></font></p><p style="margin-top: 8px; margin-bottom: 8px; font-size: small; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman" color="#000000"><font size="4" face="Times New Roman">In options Yass found more than a finan...</font></font></p></span></div><div><span class="mw-headline"><font size="4" face="Times New Roman"><font style="background-color: rgb(255, 255, 255);">=</font></font><div style="background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman">medium .com</font></div><div style="background-color: rgb(255, 255, 255);">
</div><div style="background-color: rgb(255, 255, 255);"><a href="https://medium.com/textifire/a-special-relationship-the-birth-of-cambridge-analytica-97633129cb06" style="text-decoration-line: none; font-weight: bold; outline: none;">https://medium.com/textifire/a-special-relationship-the-birth-of-cambridge-analytica-97633129cb06</a></div><div style="background-color: rgb(255, 255, 255);">
</div><div style="background-color: rgb(255, 255, 255);"><div>no lnx </div><div>
</div><div><b>A Special Relationship & the Birth of Cambridge Analytica</b></div><div>Bridging the Atlantic to bring radical nativists of Trump & Brexit together via military tech & ad money, one donation or dataset at a time.</div><div>
</div><div>May 19,<b> 2017</b> · 46 min read</div><div>
</div><div>Steve Bannon-owned Cambridge Analytica LLC, a US subsidiary of UK defense contractor SCL Group, has been increasingly faulted for its dual role in both Donald Trump and Brexit’s victories. Its elevated & expensive role in the Trump digital marketing team’s self-proclaimed voter suppression rollout was the culmination of several years of preparation by military and anti-government interests on both sides of the Atlantic, as well as nationless finance & technology kingmakers seeking to enhance their own profit power.</div><div>
</div><div><b>As a direct result of the reporting led by the Observer’s Carole Cadwalladr, Cambridge Analytica is already under active investigation for violating United Kingdom data protection laws, as related to their involvement with Leave.</b>EU. It’s unclear if anything will come of this, as Leave’s ‘Bad Boys of Brexit’ seem quite confident they were able to skate through some loopholes and use some creative accounting to their advantage.</div><div>
</div><div>Separate issues have been under the microscope of UK authorities. For example, one is the improper collection & use of voters’ personal data via the internet for political marketing/advertising purposes, and another is the question of foreign (read: non-UK) money being used to fund the Leave campaigns. Cambridge Analytica is at the center of the data inquiry, and US-based stock trader Robert Mercer has been identified as the primary source of the foreign money, but in both cases political media production & dissemination is the underlying issue.</div><div>
</div><div>Our previous article looked at the undertold history of the nonprofit organization Citizens United regarding highly influential American political media & advertising from 1988 to 2011, and we’ll continue just prior to where we left off. SCL was in a down period at the beginning of our tale, and its Cambridge Analytica did not yet exist.</div><div>
</div><div> Donald Trump would soon begin early-2011 meetings with his new friends Steve Bannon and Citizens United’s David Bossie (fresh off a huge Supreme Court victory) to plot out a Trump 2012 presidential campaign, but they ultimately decided to once again put his formal aspirations on hold.</div><div>Still, the fire rises.</div><div>
</div><div>Dukakis to Donald: 30 Years of Citizens United - TEXTIFIRE - Medium</div><div>1988 Democratic presidential nominee Michael Dukakis, who was attempting to win back the White House after 8 years of…</div><div>medium.com</div><div>PROFIT BOTS</div><div>
</div><div>Bannon & Bossie began releasing their political issue advocacy film collaborations in 2010, months after Bossie’s Citizens United v FEC case received its big Supreme Court victory, but they were among many looking to exploit the new election [de]regulations. One such up-and-coming major player was half-billionaire Robert Mercer.</div><div><b>Mercer had won awards in his first career, working for IBM’s Watson AI project in the field of natural language processing,</b> where he wrote code teaching computers how to understand humans. The avid yachtsman changed tacks slightly in 1993, as he went on to make his sudden fortune with the wildly profitable private hedge fund Renaissance Technologies, also known as RenTec, of which he is now co-CEO. Its stock-in-trade, if you will, is using quantitative analysis and high frequency trading (HFT) to win big on the global financial markets.</div><div>
</div><div>Quantitative analysis is a blanket term that covers a range of techniques, but the basic idea is to execute financial transactions based on predictions made by calculating large groups of historical alphanumeric sets; i.e., using existing patterns to predict future outcomes. When you’re anticipating future numbers, you might naturally expect to first inspect past numbers.</div><div>
</div><div>However, the standard human brain can only do so much these days, so the vast majority of work involved in this field is performed by computers. Even experts in the field — unsurprisingly called ‘quants’, though RenTec is known for exclusively employing mathematicians, physicists, and cryptographers — are still only able to quickly & accurately calculate a small grouping of historical variables. As a result, giant datasets — consisting of any number of different variables tracked over time — are fed into computers which calculate them using complex math equations, following repeatable series of preprogrammed steps that are known as algorithms.</div><div>
</div><div><b>Not only do quants employ algorithms to spit out robotically identified market trends, but they frequently direct the algorithms to buy and sell stocks all on their own.</b> This outsourcing of labor is known as algorithmic trading, and since the computers involved are usually employing algorithms on both sides of these transactions, the trades can happen incredibly quickly (nanoseconds) and in high volumes (around half of all US equity trades). Now we’re describing the quant subgenre of high frequency trading.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">HFT is very controversial within the financial industry, with supporters saying it helps keep the markets liquid & transparent and detractors saying it increases volatility, but it’s probably safe to say most outside observers think it’s very dangerous. It’s been responsible for “flash crashes”;</span> allowed for massive accumulations of private wealth for no reason other than automated exploitation of loopholes, timezones, and bandwidth;<b> played a sizable (or at least very profitable) role in the 2008 global financial meltdown; and put the planet’s resources under the control of larval artificial intelligence.</b></div><div>
</div><div>For these reasons, it should be no surprise HFT came under the scrutiny of regulators, but only after a decade of algorithmic trading that was enabled by the 2000 changeover to stock decimalization (pricing shares by pennies instead of quarter-dollars). The EU had been fairly vigilant in that regard, but the US government hadn’t pricked up its ears until after the July 2009 arrest of Sergey Aleynikov, a Russian-born U.S. citizen, for allegedly stealing ‘proprietary’ algorithms from his employer Goldman Sachs.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">Aleynikov was accused of sticking his digital avatar hand into the “black box” — the batches of algorithms that are kept secret by HFT firms — of Goldman Sachs, but his still-active case has been in & out of courts for these past 8 years, partially because some of the laws he broke had not yet been fully written. That genre of legislative inefficiency sparked the interest of<b> Peter DeFazio, a Democratic congressman from Oregon,</b> which in turn caught the eyes of quants and black box houses like RenTec.</span></div><div>
</div><div>4 minutes of HFT</div><div>
</div><div><b>DeFazio spearheaded the idea of a financial transactions tax — to impose a micropercent tax on trades that would only affect the high-volume HFT in any tangible way</b>— and teamed up with a couple colleagues to bring bills to the floor of Congress. He got nowhere in 2009, two years after the “Quant Quake”, nor in 2010, even after the May 6th “Flash Crash” again alerted the public to the dangers of HFT. Despite the failure to ignite substantial interest, his dedication to reform did not go unnoticed.</div><div>
</div><div>TEST DRIVING CITIZENS UNITED</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);"><b>DeFazio’s 2010 reelection campaign was nearly derailed by the appearance of highly-funded ads which attacked him and supported his ‘Tea Party’ Republican opponent, Art Robinson</b>. Created by a <b>PAC calling itself Concerned Taxpayers of America (CTA)</b>, it had been an ongoing mystery at the time as to who put up the big money for that organization. Only a few weeks before the election, as per the then-newly lax criteria set forth by the Citizens United decision earlier that year, was it revealed that one of the only two funders was Mr Robert Mercer, who contributed $643,750.</span></div><div>
</div><div>Investigation by the Washington Post prior to the reveal turned up even more curiosities, including a denial of the existence of CTA by a PR rep standing in the doorway of its registered address and directly to DeFazio’s face. Also, we should not be surprised to learn <b>CTA’s treasurer was Jason Miller, who would go on to become Trump’s campaign communications director starting 30 June 2016.</b> Miller was briefly named White House communications director in December 2016, before recusing himself a few days later after a fellow campaign worker accused the otherwise married Miller of fathering her unborn child.</div><div>
</div><div>Mercer’s attacks on DeFazio are easily attributable to HFT tax proposals, but his support of political then-novice Art Robinson is also notable. Robinson is a crackpot pseudoscientist whose <b>mentor was Nobel Prize Winner Linus Pauling</b>, before they acrimoniously parted ways in a divorce which ultimately ended in Robinson’s $25.5m lawsuit against the Pauling Institute (which he<span style="background-color: rgb(255, 255, 102);"> settled for $575k).</span></div><div>
</div><div>Robinson then became a supporter of homeopathic disease cures via exposure to raw radioactive elements, as well as a well-known climate change denier, an obsessive hoarder of 14,000+ human urine samples, and a forest-dwelling widower who homeschooled his 6 children using his own Bible-based, available-for-sale “Robinson Curriculum” (all of which basically makes him the Anti-Captain Fantastic).<b> He lost to DeFazio in 2010 and lost again & again & again in 3 subsequent elections, but managed to become the chairman of the Oregon Republican Party from 2013–15, and has recently been considered for the role of Trump’s chief Science Adviser.</b></div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">Robert Mercer and his politically powerful daughter Rebekah are said to have become fans of Robinson’s after reading his newsletter “Access to Energy”, which argues such things as Chernobyl radiation and carbon pollution are ultimately beneficial to planetary life.</span> However, Mercer has privately “downplay[ed] the dangers posed by nuclear war” when excitedly expressing his belief that Hiroshima & Nagasaki radiation made the greater population of Japan healthier, and Robinson has published a book & multi-DVD set on Nuclear War Survival Skills, so they have that hobby in common.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">After bringing someone like Robinson close to victory in 2010, the Mercers’ fresh taste for political power brought them the privileges and lifestyles of the rich & famous. They soon found themselves at a<b> 2011 conference of the Club For Growth,</b> a pro-business activist group for the conservative elite, which spent $6m of its own in support of 2010 GOP/Tea Party contenders. The Club is perhaps best known for being sued and fined by the FEC in 2005 for violating fair election laws. Its Executive Director <b>David Keating then formed SpeechNow</b>, a group which sued the FEC and did even more damage to campaign finance regulations via their Ninth Circuit Court victory in the immediate wake of Citizens United v FEC, but right now we’re focused on the Club as the place where Mercer first met Andrew Breitbart.</span></div><div>
</div><div>BREITBART OUT, BANNON & MERCER IN</div></div></span></div><div><span class="mw-headline"><font size="4" face="Times New Roman"></font></span></div>

<p style="font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px;"><font size="4" face="Times New Roman">Shannon and his wife Betty also used to go on weekends to <a href="http://en.wikipedia.org/wiki/Las_Vegas" title="Las Vegas">Las Vegas</a> with <a href="http://en.wikipedia.org/wiki/M.I.T." title="M.I.T." class="mw-redirect">M.I.T.</a> mathematician <a href="http://en.wikipedia.org/wiki/Edward_O.Thorp" title="Edward O. Thorp">Ed Thorp</a>,<sup id="cite_ref-Elwyn_article_24-0" class="reference"><a href="http://en.wikipedia.org/wiki/Claude_Shannon#cite_note-Elwyn_article-24">[25]</a></sup> and made very successful forays in <a href="http://en.wikipedia.org/wiki/Blackjack" title="Blackjack">blackjack</a>using <a href="http://en.wikipedia.org/wiki/Game_theory" title="Game theory">game theory</a> type methods co-developed with fellow Bell Labs associate, physicist <a href="http://en.wikipedia.org/wiki/John_Larry_Kelly,Jr" title="John Larry Kelly, Jr" class="mw-redirect">John L. Kelly Jr.</a> based on principles of information theory.<sup id="cite_ref-John_L.Kelly_25-0" class="reference"><a href="http://en.wikipedia.org/wiki/Claude_Shannon#cite_note-John_L.Kelly-25">[26]</a></sup> They made a fortune, as detailed in the book <i>Fortune's Formula</i> by <a href="http://en.wikipedia.org/wiki/William_Poundstone" title="William Poundstone">William Poundstone</a> and corroborated by the writings of <a href="http://en.wikipedia.org/wiki/Elwyn_Berlekamp" title="Elwyn Berlekamp">Elwyn Berlekamp</a>,<sup id="cite_ref-Elwyn_bio_26-0" class="reference"><a href="http://en.wikipedia.org/wiki/Claude_Shannon#cite_note-Elwyn_bio-26">[27]</a></sup> Kelly's research assistant in 1960 and 1962.<sup id="cite_ref-Fortune_2-1" class="reference"><a href="http://en.wikipedia.org/wiki/Claude_Shannon#cite_note-Fortune-2">[3]</a></sup> Shannon and Thorp also applied the same theory, later known as the <i><a href="http://en.wikipedia.org/wiki/Kelly_criterion" title="Kelly criterion">Kelly criterion</a></i>, to the stock market with even better results.<sup id="cite_ref-Poundstone_27-0" class="reference"><a href="http://en.wikipedia.org/wiki/Claude_Shannon#cite_note-Poundstone-27">[28]</a></sup> <span style=" background-color: rgb(255, 255, 102);">Over the decades, Kelly's scientific formula has become a part of mainstream investment theory<sup id="cite_ref-Handbook_of_Asset_and_Liability_Management_28-0" class="reference"><a href="http://en.wikipedia.org/wiki/Claude_Shannon#cite_note-Handbook_of_Asset_and_Liability_Management-28">[29]</a></sup> and the most prominent users, well-known and successful billionaire investors <a href="http://en.wikipedia.org/wiki/Warren_Buffett" title="Warren Buffett">Warren Buffett</a>,</span><sup id="cite_ref-The_Dhandho_Investor_29-0" class="reference"><a href="http://en.wikipedia.org/wiki/Claude_Shannon#cite_note-The_Dhandho_Investor-29">[30]</a></sup><sup id="cite_ref-Ed_Thorp.27s_Genius_Detailed_In_Scott_Patterson.27s_The_Quants_30-0" class="reference"><a href="http://en.wikipedia.org/wiki/Claude_Shannon#cite_note-Ed_Thorp.27s_Genius_Detailed_In_Scott_Patterson.27s_The_Quants-30">[31]</a></sup> <a href="http://en.wikipedia.org/wiki/William_H._Gross" title="William H. Gross" class="mw-redirect">Bill Gross</a><sup id="cite_ref-Wilmott_II_31-0" class="reference"><a href="http://en.wikipedia.org/wiki/Claude_Shannon#cite_note-Wilmott_II-31">[32]</a></sup>, and <a href="http://en.wikipedia.org/wiki/James_Harris_Simons" title="James Harris Simons">Jim Simons</a> use Kelly methods. Warren Buffett met Thorp the first time in 1968. It's said that<span class="Apple-converted-space"> </span>Buffett<span class="Apple-converted-space"> </span>uses a form of the Kelly criterion in deciding how much money to put into various holdings. Also <a href="http://en.wikipedia.org/wiki/Elwyn_Berlekamp" title="Elwyn Berlekamp">Elwyn Berlekamp</a> had applied the same logical algorithm for <a href="http://en.wikipedia.org/wiki/Axcom_Trading_Advisors" title="Axcom Trading Advisors">Axcom Trading Advisors</a>, an alternative investment management company, that he had founded. Berlekamp's company was acquired by<a href="http://en.wikipedia.org/wiki/James_Harris_Simons" title="James Harris Simons">Jim Simons</a> and his <span style=" background-color: rgb(255, 255, 102);"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies_Corp" title="Renaissance Technologies Corp" class="mw-redirect">Renaissance Technologies Corp</a> hedge fund in 1992,</span> whereafter its investment instruments were either subsumed into (or essentially renamed as) Renaissance's flagship <a href="http://en.wikipedia.org/wiki/Medallion_Fund" title="Medallion Fund" class="mw-redirect">Medallion Fund</a>. But as Kelly's original paper demonstrates, the criterion is only valid when the investment or "game" is played many times over, with the same probability of winning or losing each time, and the same payout ratio.<sup id="cite_ref-original_Kelly_article_32-0" class="reference"><a href="http://en.wikipedia.org/wiki/Claude_Shannon#cite_note-original_Kelly_article-32">[33]</a></sup></font>

<font size="4" face="Times New Roman"><span style=" background-color: rgb(255, 255, 102);">The theory was also exploited by the famous <i><a href="http://en.wikipedia.org/wiki/MIT_Blackjack_Team" title="MIT Blackjack Team">MIT Blackjack Team</a></i>, </span>which was a group of students and ex-students from the <a href="http://en.wikipedia.org/wiki/Massachusetts_Institute_of_Technology" title="Massachusetts Institute of Technology">Massachusetts Institute of Technology</a>, <a href="http://en.wikipedia.org/wiki/Harvard_Business_School" title="Harvard Business School">Harvard Business School</a>, <a href="http://en.wikipedia.org/wiki/Harvard_University" title="Harvard University">Harvard University</a>, and other leading colleges who used <a href="http://en.wikipedia.org/wiki/Card_counting" title="Card counting">card-counting</a> techniques and other sophisticated strategies to beat casinos at <a href="http://en.wikipedia.org/wiki/Blackjack" title="Blackjack">blackjack</a> worldwide. The team and its successors operated successfully from 1979 through the beginning of the 21st century. Many other blackjack teams have been formed around the world with the goal of beating the casinos.</font>

<font size="4" face="Times New Roman">Claude Shannon's card count techniques were explained in <i><a href="http://en.wikipedia.org/wiki/Bringing_Down_the_House%28book%29" title="Bringing Down the House (book)">Bringing Down the House</a></i>, the best-selling book published in 2003 about the <a href="http://en.wikipedia.org/wiki/MIT_Blackjack_Team" title="MIT Blackjack Team">MIT Blackjack Team</a>by <a href="http://en.wikipedia.org/wiki/Ben_Mezrich" title="Ben Mezrich">Ben Mezrich</a>. In 2008, the book was adapted into a <a href="http://en.wikipedia.org/wiki/Drama_film" title="Drama film">drama film</a> titled <i><a href="http://en.wikipedia.org/wiki/21%282008_film%29" title="21 (2008 film)">21</a></i>.</font>

 </font>

<font size="4" face="Times New Roman"><b style=" background-color: rgb(255, 255, 255);">Renaissance Technologies</b><span style=" background-color: rgb(255, 255, 255);"> is an American </span><a href="http://en.wikipedia.org/wiki/Hedge_fund" title="Hedge fund" style="text-decoration: none; background: none;">hedge fund</a><span style=" background-color: rgb(255, 255, 255);"> management company that operates three funds.</span><sup id="cite_ref-renfund_2-1" class="reference" style="line-height: 1; unicode-bidi: -webkit-isolate; background-color: rgb(255, 255, 255);"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#cite_note-renfund-2" style="text-decoration: none; white-space: nowrap; background: none;">[2]</a></sup><span style=" background-color: rgb(255, 255, 255);"> It operates in </span><a href="http://en.wikipedia.org/wiki/East_Setauket" title="East Setauket" class="mw-redirect" style="text-decoration: none; background: none;">East<span class="Apple-converted-space"> </span></a><span style=" background-color: rgb(255, 255, 102);"><a href="http://en.wikipedia.org/wiki/East_Setauket" title="East Setauket" class="mw-redirect" style="text-decoration: none; background-image: none; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: initial; background-repeat: initial;">Setauket</a>, <a href="http://en.wikipedia.org/wiki/Long_Island,New_York" title="Long Island, New York" class="mw-redirect" style="text-decoration: none; background-image: none; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: initial; background-repeat: initial;">Long Island</a></span><a href="http://en.wikipedia.org/wiki/Long_Island,New_York" title="Long Island, New York" class="mw-redirect" style="text-decoration: none; background: none;">, New York</a><span style=" background-color: rgb(255, 255, 255);">, near </span><a href="http://en.wikipedia.org/wiki/State_University_of_New_York_at_Stony_Brook" title="State University of New York at Stony Brook" class="mw-redirect" style="text-decoration: none; background: none;">Stony Brook University</a><span style=" background-color: rgb(255, 255, 255);"> with administrative functions handled in </span><a href="http://en.wikipedia.org/wiki/Manhattan" title="Manhattan" style="text-decoration: none; background: none;">Manhattan</a><span style=" background-color: rgb(255, 255, 255);">.</span></font>

<font size="4" face="Times New Roman" /><h2 style="margin: 1em 0px 0.25em; overflow: hidden; padding: 0px; border: none; display: inline; line-height: 1.3; background: none;"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman">Contents</font></font></font></font></font></font></font></h2>

<li class="toclevel-1 tocsection-1" style=" margin-bottom: 0.1em;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#History" style="text-decoration: none; background: none;"><font size="4" face="Times New Roman" color="#000000"><span class="tocnumber">1</span> <span class="toctext">History</span></font></a></li>

<li class="toclevel-1 tocsection-2" style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#Funds" style="text-decoration: none; background: none;"><span class="tocnumber">2</span> <span class="toctext">Funds</span></a>

</font><ul style=" line-height: 1.6; list-style-type: none; margin: 0px 0px 0px 2em; padding: 0px; list-style-image: none;">

<li class="toclevel-2 tocsection-3" style=" margin-bottom: 0.1em;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#Investment_strategy" style="text-decoration: none; background: none;"><font size="4" face="Times New Roman" color="#000000"><span class="tocnumber">2.1</span> <span class="toctext">Investment strategy</span></font></a></li>

</ul>

</li>

<li class="toclevel-1 tocsection-4" style=" margin-bottom: 0.1em;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#Personnel" style="text-decoration: none; background: none;"><font size="4" face="Times New Roman" color="#000000"><span class="tocnumber">3</span> <span class="toctext">Personnel</span></font></a></li>

<li class="toclevel-1 tocsection-5" style=" margin-bottom: 0.1em;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#Renaissance_alumni" style="text-decoration: none; background: none;"><font size="4" face="Times New Roman" color="#000000"><span class="tocnumber">4</span> <span class="toctext">Renaissance alumni</span></font></a></li>

<li class="toclevel-1 tocsection-6" style=" margin-bottom: 0.1em;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#Footnotes" style="text-decoration: none; background: none;"><font size="4" face="Times New Roman" color="#000000"><span class="tocnumber">5</span> <span class="toctext">Footnotes</span></font></a></li>

<li class="toclevel-1 tocsection-7" style=" margin-bottom: 0.1em;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#External_links" style="text-decoration: none; background: none;"><font size="4" face="Times New Roman" color="#000000"><span class="tocnumber">6</span> <span class="toctext">External links</span></font></a></li>

</ul>

</div>

<h2 style="font-style: normal; font-variant: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; font-weight: normal; margin: 1em 0px 0.25em; overflow: hidden; padding: 0px; border-bottom: 1px solid rgb(170, 170, 170); line-height: 1.3; background: none rgb(255, 255, 255);"><font size="4" face="Times New Roman"><span class="mw-headline" id="History">History</span><span class="mw-editsection" style="user-select: none; margin-left: 1em; vertical-align: baseline; line-height: 1em; display: inline-block; white-space: nowrap; unicode-bidi: -webkit-isolate;"><span class="mw-editsection-bracket" style="margin-right: 0px; margin-left: 0px;">[</span><a href="http://en.wikipedia.org/w/index.php?title=Renaissance_Technologies&action=edit&section=1" title="Edit section: History" style="text-decoration: none; background: none;">edit</a><span class="mw-editsection-bracket" style="margin-left: 0px; margin-right: 0px;">]</span></span></font></h2>

<font size="4" face="Times New Roman">Renaissance charges a management fee of 5% and a <a href="http://en.wikipedia.org/wiki/Carried_interest" title="Carried interest" style="text-decoration: none; background: none;">profit participation</a> of, initially 36%, and now 44%, both of which are higher than the industry standard of 2% and 20%, respectively.<sup id="cite_ref-Bloomberg_Simons_5-0" class="reference" style="line-height: 1; unicode-bidi: -webkit-isolate;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#cite_note-Bloomberg_Simons-5" style="text-decoration: none; white-space: nowrap; background: none;">[5]</a></sup></font></p>

<h2 style="font-style: normal; font-variant: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; font-weight: normal; margin: 1em 0px 0.25em; overflow: hidden; padding: 0px; border-bottom: 1px solid rgb(170, 170, 170); line-height: 1.3; background: none rgb(255, 255, 255);"><font size="4" face="Times New Roman"><span class="mw-headline" id="Funds">Funds</span><span class="mw-editsection" style="user-select: none; margin-left: 1em; vertical-align: baseline; line-height: 1em; display: inline-block; white-space: nowrap; unicode-bidi: -webkit-isolate;"><span class="mw-editsection-bracket" style="margin-right: 0px; margin-left: 0px;">[</span><a href="http://en.wikipedia.org/w/index.php?title=Renaissance_Technologies&action=edit&section=2" title="Edit section: Funds" style="text-decoration: none; background: none;">edit</a><span class="mw-editsection-bracket" style="margin-left: 0px; margin-right: 0px;">]</span></span></font></h2>

<p style="font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0.5em 0px; line-height: 22.4px;"><font size="4" face="Times New Roman"><span style=" background-color: rgb(255, 255, 255);">The <b>Medallion Fund</b> has traded non-stock instruments and is international. American-traded instruments include commodities futures and <a href="http://en.wikipedia.org/wiki/US_Treasury" title="US Treasury" class="mw-redirect" style="text-decoration: none; background: none;">US Treasury</a> bonds. Foreign-traded instruments include <a href="http://en.wikipedia.org/wiki/Currency_swap" title="Currency swap" style="text-decoration: none; background: none;">currency swaps</a>, <a href="http://en.wikipedia.org/wiki/Futures_contract" title="Futures contract" style="text-decoration: none; background: none;">commodities futures</a>, and foreign <a href="http://en.wikipedia.org/wiki/Bond_(finance)" title="Bond (finance)" style="text-decoration: none; background: none;">bonds</a>. The Medallion Fund has its own internal <a href="http://en.wikipedia.org/wiki/Trading_desk" title="Trading desk" class="mw-redirect" style="text-decoration: none; background: none;">trading desk</a>, staffed by approximately 20 traders, and trades from Monday opening bell in Australia through Friday closing bell in the US. Its origins date to the late 1980s, and it is believed to have essentially subsumed the trading positions and</span><span style=" background-color: rgb(255, 255, 102);"><span class="Apple-converted-space"> </span>intellectual property of <a href="http://en.wikipedia.org/wiki/James_Ax" title="James Ax" style="text-decoration: none; background-image: none; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: initial; background-repeat: initial;">James Ax</a>'s <a href="http://en.wikipedia.org/wiki/Axcom_Trading_Advisors" title="Axcom Trading Advisors" class="mw-redirect" style="text-decoration: none; background-image: none; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: initial; background-repeat: initial;">Axcom Trading Advisors</a> after that company's dissolution in 1992</span><span style=" background-color: rgb(255, 255, 255);">.</span><sup class="noprint Inline-Template Template-Fact" style="line-height: 1; white-space: nowrap; background-color: rgb(255, 255, 255);">[<i><a href="http://en.wikipedia.org/wiki/Wikipedia:Citation_needed" title="Wikipedia:Citation needed" style="text-decoration: none; background: none;"><span title="This claim needs references to reliable sources. (January 2010)">citation needed</span></a></i>]</sup></font>

<font size="4" face="Times New Roman">The <b>Nova Fund</b> has traded <a href="http://en.wikipedia.org/wiki/NASDAQ" title="NASDAQ" style="text-decoration: none; background: none;">NASDAQ</a> stocks only, executing purely electronically, with a desk staffed by 1–2 traders overseeing operations. In the mid-1990s, Nova was one of <a href="http://en.wikipedia.org/wiki/Instinet" title="Instinet" style="text-decoration: none; background: none;">Instinet</a>'s largest volume customers. On one day in 1997 Nova executions accounted for 14% of the share volume of the NASDAQ.<sup class="noprint Inline-Template Template-Fact" style="line-height: 1; white-space: nowrap;">[<i><a href="http://en.wikipedia.org/wiki/Wikipedia:Citation_needed" title="Wikipedia:Citation needed" style="text-decoration: none; background: none;"><span title="This claim needs references to reliable sources. (May 2008)">citation needed</span></a></i>]</sup></font>

<font size="4" face="Times New Roman">The <b>Renaissance Institutional Equities Fund</b> started in mid-2005 and is offered as a fund for institutional investors. Renaissance manages a number of other funds in various markets, including mortgage-backed securities and funds of external managed funds like the <b>Renaissance Return Fund</b>.<sup class="noprint Inline-Template Template-Fact" style="line-height: 1; white-space: nowrap;">[<i><a href="http://en.wikipedia.org/wiki/Wikipedia:Citation_needed" title="Wikipedia:Citation needed" style="text-decoration: none; background: none;"><span title="This claim needs references to reliable sources. (September 2010)">citation needed</span></a></i>]</sup></font></p>

<h3 style="font-style: normal; font-variant: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0.3em 0px 0px; overflow: hidden; padding-top: 0.5em; padding-bottom: 0px; border-bottom-style: none; line-height: 1.6; background: none rgb(255, 255, 255);"><font size="4" face="Times New Roman"><span class="mw-headline" id="Investment_strategy">Investment strategy</span><span class="mw-editsection" style="user-select: none; font-weight: normal; margin-left: 1em; vertical-align: baseline; line-height: 1em; display: inline-block; white-space: nowrap; unicode-bidi: -webkit-isolate;"><span class="mw-editsection-bracket" style="margin-right: 0px; margin-left: 0px;">[</span><a href="http://en.wikipedia.org/w/index.php?title=Renaissance_Technologies&action=edit&section=3" title="Edit section: Investment strategy" style="text-decoration: none; background: none;">edit</a><span class="mw-editsection-bracket" style="margin-left: 0px; margin-right: 0px;">]</span></span></font></h3>

<p style="font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin: 0.5em 0px; line-height: 22.4px;"><font size="4" face="Times New Roman"><span style=" background-color: rgb(255, 255, 255);">For more than twenty years, Simons' Renaissance Technologies </span><a href="http://en.wikipedia.org/wiki/Hedge_fund" title="Hedge fund" style="text-decoration: none; background: none;">hedge fund</a><span style=" background-color: rgb(255, 255, 255);">, which trades in markets around the world, has employed complex mathematical models to analyze and execute trades, many of them automated. Renaissance uses computer-based models to predict price changes in easily traded financial instruments. These models are based on analyzing as much data as can be gathered, then looking for non-random movements to make predictions.</span><sup id="cite_ref-Bloomberg_Simons_5-1" class="reference" style="line-height: 1; unicode-bidi: -webkit-isolate; background-color: rgb(255, 255, 255);"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#cite_note-Bloomberg_Simons-5" style="text-decoration: none; white-space: nowrap; background: none;">[5]</a></sup><span style=" background-color: rgb(255, 255, 255);"> Some also attribute Renaissance performance to employing </span><a href="http://en.wikipedia.org/wiki/Financial_signal_processing" title="Financial signal processing" style="text-decoration: none; background: none;">financial signal processing</a><span style=" background-color: rgb(255, 255, 255);"> techniques such as pattern recognition.</span><span style=" background-color: rgb(255, 255, 102);"> <a href="http://en.wikipedia.org/wiki/The_Quants" title="The Quants" style="text-decoration: none; background-image: none; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: initial; background-repeat: initial;">The Quants</a> describes the hiring of speech recognition experts, many from IBM, including the current leaders of the firm.</span></font>

<font size="4" face="Times New Roman">Renaissance employs staff with non-financial backgrounds, including mathematicians,</font>

<font size="4" face="Times New Roman"> physicists, <a href="http://en.wikipedia.org/wiki/Astrophysicist" title="Astrophysicist" class="mw-redirect" style="text-decoration: none; background: none;">astrophysicists</a> and <a href="http://en.wikipedia.org/wiki/Statistician" title="Statistician" style="text-decoration: none; background: none;">statisticians</a>. About a third of the 275 employees at the <a href="http://en.wikipedia.org/wiki/Setauket" title="Setauket" class="mw-redirect" style="text-decoration: none; background: none;">East Setauket</a>office have <a href="http://en.wikipedia.org/wiki/Doctor_of_Philosophy" title="Doctor of Philosophy" style="text-decoration: none; background: none;">Ph.Ds</a>.<sup id="cite_ref-Bloomberg_Simons_5-2" class="reference" style="line-height: 1; unicode-bidi: -webkit-isolate;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#cite_note-Bloomberg_Simons-5" style="text-decoration: none; white-space: nowrap; background: none;">[5]</a></sup></font>

<font size="4" face="Times New Roman">Like many other quantitative funds, their RIE Fund had difficulty with the higher volatility environment that persisted throughout the end of the summer of 2007. According to an 10 August (2007) article in Bloomberg by Katherine Burton, "James Simons's $29 billion Renaissance Institutional Equities Fund fell 8.7% in August 2007 when his computer models used to buy and sell stocks were overwhelmed by securities' price swings. The two-year-old quantitative, or 'quant', hedge fund now has declined 7.4 percent for the year. Simons said other hedge funds have been forced to sell positions, short-circuiting statistical models based on the relationships among securities."<sup id="cite_ref-Bloomberg_Drop_6-0" class="reference" style="line-height: 1; unicode-bidi: -webkit-isolate;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#cite_note-Bloomberg_Drop-6" style="text-decoration: none; white-space: nowrap; background: none;">[6]</a></sup></font>

<font size="4" face="Times New Roman">On 25 September 2008, Renaissance wrote a comment letter to the <a href="http://en.wikipedia.org/wiki/Securities_and_Exchange_Commission" title="Securities and Exchange Commission" class="mw-redirect" style="text-decoration: none; background: none;">Securities and Exchange Commission</a>, discouraging them from implementing a rule change that would have permitted the public to access information regarding institutional investors' <a href="http://en.wikipedia.org/wiki/Short(finance)" title="Short (finance)" style="text-decoration: none; background: none;">short</a> positions, as they can currently do with <a href="http://en.wikipedia.org/wiki/Long(finance)" title="Long (finance)" style="text-decoration: none; background: none;">long</a> positions. The company cited a number of reasons for this, including the fact that "institutional investors may alter their trading activity to avoid public disclosure".<sup id="cite_ref-7" class="reference" style="line-height: 1; unicode-bidi: -webkit-isolate;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#cite_note-7" style="text-decoration: none; white-space: nowrap; background: none;">[7]</a></sup></font></p>

<h2 style="font-style: normal; font-variant: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; font-weight: normal; margin: 1em 0px 0.25em; overflow: hidden; padding: 0px; border-bottom: 1px solid rgb(170, 170, 170); line-height: 1.3; background: none rgb(255, 255, 255);"><font size="4" face="Times New Roman"><span class="mw-headline" id="Personnel">Personnel</span><span class="mw-editsection" style="user-select: none; margin-left: 1em; vertical-align: baseline; line-height: 1em; display: inline-block; white-space: nowrap; unicode-bidi: -webkit-isolate;"><span class="mw-editsection-bracket" style="margin-right: 0px; margin-left: 0px;">[</span><a href="http://en.wikipedia.org/w/index.php?title=Renaissance_Technologies&action=edit&section=4" title="Edit section: Personnel" style="text-decoration: none; background: none;">edit</a><span class="mw-editsection-bracket" style="margin-left: 0px; margin-right: 0px;">]</span></span></font></h2>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman"><a href="http://en.wikipedia.org/wiki/James_Harris_Simons" title="James Harris Simons" style="text-decoration: none; background: none;">Jim Simons</a>, Founder, President & CEO</font></li>

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<h3 class="r" style="font-weight: normal; margin: 0px; padding: 0px; overflow: hidden; text-overflow: ellipsis; white-space: nowrap;"><a href="http://www.institutionalinvestor.com/article.aspx?articleID=1028172&single=true" style="cursor: pointer; text-decoration: none;"><font size="4" face="Times New Roman" color="#000000">The Secret World of Jim Simons | Institutional Investor</font></a></h3>

<div class="f kv SWb" style="height: 17px; line-height: 16px; white-space: nowrap;"><font size="4" face="Times New Roman"><cite class="Rm" style="font-style: normal;">www.institutionalinvestor.com/article.aspx?articleID...</cite>

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<span class="st" style=" line-height: 1.4; word-wrap: break-word;"><font size="4" face="Times New Roman"><span class="f" style="">Nov 1, 2000 - </span>Chances are you haven't heard of Jim <span style="font-weight: bold;">Simons</span>, which is just fine by him. ... <span class="ft">haven't heard of <span style="font-weight: bold;">Simons</span> or of his operation, <span style="font-weight: bold;">Renaissance Technologies</span> Corp., either.</span> ... <span class="ft">After big reverses, <span style="font-weight: bold;">Julian</span> Robertson closed down Tiger</span>  ...</font></span></div>

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<li style=" margin-bottom: 0.1em; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman">Peter Brown, co-CEO<sup id="cite_ref-8" class="reference" style="line-height: 1; unicode-bidi: -webkit-isolate;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#cite_note-8" style="text-decoration: none; white-space: nowrap; background: none;">[8]</a></sup></font></li>

<li style=" margin-bottom: 0.1em;"><span style=" background-color: rgb(255, 255, 102);"><font size="4" face="Times New Roman"><a href="http://en.wikipedia.org/wiki/Robert_Mercer_(businessman)" title="Robert Mercer (businessman)" style="text-decoration: none; background-image: none; background-attachment: initial; background-size: initial; background-origin: initial; background-clip: initial; background-position: initial; background-repeat: initial;">Robert Mercer</a>, co-CEO</font></span></li>

<li style=" margin-bottom: 0.1em; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman">Gudjon Hermansson, Production Manager, Medallion Fund. Stony Brook University, PhD, Computer Science, 1993</font></li>

<li style=" margin-bottom: 0.1em; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman">Robert Lourie, Head, Futures Research</font></li>

<li style=" margin-bottom: 0.1em; background-color: rgb(255, 255, 255);"><font size="4" face="Times New Roman">Nathaniel Simons, Principal, Vice Chairman, and Director<sup id="cite_ref-9" class="reference" style="line-height: 1; unicode-bidi: -webkit-isolate;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#cite_note-9" style="text-decoration: none; white-space: nowrap; background: none;">[9]</a></sup></font></li>

<li style=" margin-bottom: 0.1em; background-color: rgb(255, 255, 255);"><a href="http://en.wikipedia.org/wiki/George_Zweig" title="George Zweig" style="text-decoration: none; background: none;"><font size="4" face="Times New Roman" color="#000000">George Zweig</font></a></li>

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<h2 style="font-style: normal; font-variant: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; font-weight: normal; margin: 1em 0px 0.25em; overflow: hidden; padding: 0px; border-bottom: 1px solid rgb(170, 170, 170); line-height: 1.3; background: none rgb(255, 255, 255);"><font size="4" face="Times New Roman"><span class="mw-headline" id="Renaissance_alumni">Renaissance alumni</span><span class="mw-editsection" style="user-select: none; margin-left: 1em; vertical-align: baseline; line-height: 1em; display: inline-block; white-space: nowrap; unicode-bidi: -webkit-isolate;"><span class="mw-editsection-bracket" style="margin-right: 0px; margin-left: 0px;">[</span><a href="http://en.wikipedia.org/w/index.php?title=Renaissance_Technologies&action=edit&section=5" title="Edit section: Renaissance alumni" style="text-decoration: none; background: none;">edit</a><span class="mw-editsection-bracket" style="margin-left: 0px; margin-right: 0px;">]</span></span></font></h2>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman">Alexander Astashkevich—Research, Medallion Fund, committed murder and suicide in February 2006<sup id="cite_ref-10" class="reference" style="line-height: 1; unicode-bidi: -webkit-isolate;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#cite_note-10" style="text-decoration: none; white-space: nowrap; background: none;">[10]</a></sup></font></li>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman"><a href="http://en.wikipedia.org/wiki/James_Ax" title="James Ax" style="text-decoration: none; background: none;">James Ax</a>, founder of Axcom Trading Advisors, predecessor to the <a href="http://en.wikipedia.org/wiki/Medallion_Fund" title="Medallion Fund" class="mw-redirect" style="text-decoration: none; background: none;">Medallion Fund</a>, and a mathematician</font></li>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman"><a href="http://en.wikipedia.org/wiki/Elwyn_Berlekamp" title="Elwyn Berlekamp" style="text-decoration: none; background: none;">Elwyn Berlekamp</a>, president of Axcom Trading Advisors, predecessor to the <a href="http://en.wikipedia.org/wiki/Medallion_Fund" title="Medallion Fund" class="mw-redirect" style="text-decoration: none; background: none;">Medallion Fund</a>, and a mathematician</font></li>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman"><a href="http://en.wikipedia.org/wiki/Leonard_E._Baum" title="Leonard E. Baum" style="text-decoration: none; background: none;">Leonard E. Baum</a>, the coauthor for the <a href="http://en.wikipedia.org/wiki/Baum-Welch_algorithm" title="Baum-Welch algorithm" class="mw-redirect" style="text-decoration: none; background: none;">Baum-Welch algorithm</a>, built early trading models for <a href="http://en.wikipedia.org/wiki/Axcom_Trading_Advisors" title="Axcom Trading Advisors" class="mw-redirect" style="text-decoration: none; background: none;">Axcom Trading Advisors</a><sup id="cite_ref-Bloomberg_Simons_5-3" class="reference" style="line-height: 1; unicode-bidi: -webkit-isolate;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#cite_note-Bloomberg_Simons-5" style="text-decoration: none; white-space: nowrap; background: none;">[5]</a></sup></font></li>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman"><a href="http://en.wikipedia.org/wiki/Robert_J._Frey" title="Robert J. Frey" style="text-decoration: none; background: none;">Robert J. Frey</a>, 1992–2004, Managing Director Emeritus</font></li>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman"><a href="http://en.wikipedia.org/wiki/Henry_Laufer" title="Henry Laufer" style="text-decoration: none; background: none;">Henry Laufer</a>, Vice President of Research</font></li>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman"><a href="http://en.wikipedia.org/w/index.php?title=David_Lysenko&action=edit&redlink=1" class="new" title="David Lysenko (page does not exist)" style="text-decoration: none; background: none;">David Lysenko</a>, Principal; now Managing Director, Stone Beach Investment Management</font></li>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman">Nick Patterson, Research, Medallion Fund; chess player, formerly with the UK's <a href="http://en.wikipedia.org/wiki/Government_Communications_Headquarters" title="Government Communications Headquarters" style="text-decoration: none; background: none;">Government Communications Headquarters</a>| MIT's <a href="http://en.wikipedia.org/wiki/Broad_Institute" title="Broad Institute" style="text-decoration: none; background: none;">Broad Institute</a></font></li>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman">Kresimir Penavic, Research, Medallion Fund (retired)</font></li>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman">Alkes Price, Research, Medallion Fund; now at Harvard</font></li>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman">Serge Ferleger,<sup id="cite_ref-11" class="reference" style="line-height: 1; unicode-bidi: -webkit-isolate;"><a href="http://en.wikipedia.org/wiki/Renaissance_Technologies#cite_note-11" style="text-decoration: none; white-space: nowrap; background: none;">[11]</a></sup> Research, Medallion Fund</font></li>

<li style=" margin-bottom: 0.1em;"><font size="4" face="Times New Roman"><a href="http://en.wikipedia.org/wiki/Peter_J.Weinberger" title="Peter J. Weinberger" style="text-decoration: none; background: none;">Peter J. Weinberger</a> (the "W" in <a href="http://en.wikipedia.org/wiki/AWK(programming_language)" title="AWK (programming language)" class="mw-redirect" style="text-decoration: none; background: none;">AWK</a>), Medallion Fund, left Renaissance for <a href="http://en.wikipedia.org/wiki/Google" title="Google" style="text-decoration: none; background: none;">Google</a> in 2003</font></li>

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