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The world’s greatest investor… Hired PhDs not MBAs… Played a different game… He cracked the code… Two biotech gems… Amazon hires robots… Philip Morris shares drop… |
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Today, Porter turns the Journal over to Erez Kalir, editor of Porter & Co.’s Tech Frontiers.
Erez has degrees from Stanford, Yale, and Oxford, has studied biology, finance, and law, and has worked at McKinsey & Co. and for Julian Robertson at Tiger Management. Porter & Co. has recently expanded the domain of Erez’s investment research to include tech stocks, the blockchain, and science beyond his original focus of biotech.
Four of the 12 open positions in the Tech Frontiers portfolio are up 2x or more since he recommended them. There are three more that doubled before he suggested selling them to take gains. Overall, the portfolio is up 57% since he launched it last year. In today’s Journal, Erez discusses two of those biotech gems…
Who is the greatest professional investor of all time?
Ask the average person and they’ll likely answer Warren Buffett. Buffett, after all, built Berkshire Hathaway into a trillion-dollar global empire based on successful investments, compounding its stock at roughly 20% annually for nearly six decades – a feat few have matched, especially with the huge amount of capital that Buffett has to manage. A savvier interlocutor might suggest Stan Druckenmiller, who compounded the funds he managed at 30% annually over three decades without a single down year.
But true professionals know there is only one correct answer: the late Jim Simons, the legendary mathematician who founded and built Renaissance Technologies (“RenTech”). Since its inception in 1988, Simons’ Medallion Fund has compounded at 66% annually before fees – an almost mythical return that has never been matched or even approached by any hedge fund in history. His achievement is so extraordinary it lives in a different statistical universe.
Jim Simons was no ordinary hedge fund titan. Before turning to finance, he had already achieved more than most academic scientists do in a lifetime. Simons earned his PhD in math at U.C. Berkeley, taught at MIT and Harvard, then became the chairman of the math department at Stony Brook University in New York. Along the way, he made major contributions to differential geometry – most famously the Chern-Simons theory, still widely cited in theoretical physics and string theory today.