The Man Who Solved the Market

I strongly believe, for all babies and a significant number of grownups, curiosity is a bigger motivator than money. Elwyn Berlekamp

“You have money in the bank or not, at the end of the day,” Mercer told science writer Sharon McGrayne. “You don’t have to wonder if you succeeded . . . it’s just a very satisfying thing.”2

In a matter of months, Meriwether and his colleagues had lost nearly $2 billion of personal wealth, marks on their careers they would never erase.

“There’s no data like more data,” Mercer told a colleague, an expression that became the firm’s hokey mantra.

John Nash, the game theorist and mathematician who later would be immortalized in Sylvia Nasar’s book A Beautiful Mind.

Laufer’s work also showed that, if markets moved higher late in a day, it often paid to buy futures contracts just before the close of trading and dump them at the market’s opening the next day.

They also made their system adaptive, or capable of learning and adjusting on its own, much like Henry Laufer’s trading system for futures. If the model’s recommended trades weren’t executed, for whatever reason, it self-corrected, automatically searching for buy-or-sell orders to nudge the portfolio back where it needed to be, a way of solving the

“I don’t know why planets orbit the sun,” Simons told a colleague, suggesting one needn’t spend too much time figuring out why the market’s patterns existed. “That doesn’t mean I can’t predict them.”

“The lesson was: Do what you like in life, not what you feel you ‘should’ do,” Simons says. “It’s something I never forgot.”