What prompted simons to take this approach

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In the current issue of the AAII Journal (American Association of Individual Investors), Jim Simons, founder of Renaissance Technologies, the world's most successful hedge fund, says:

"If you do fundamental tradingm one morning you feel like a genius, the next you feel like an idiot. By 1998, I decided we would go 100% models." By this, Simons means he would base all trades on pre-defined mathematical alforithms. "You do whatever the model says, no matter how smart or dumb you think it is. And that turned out to be wonderful for our business."

What prompted Simons to take this approach? Why did it turn out so well?

 

Reference no: EM13264798

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