Alpha Trader #5 - The Man Who Solved The Market with the WSJ's Greg Zuckerman

The fifth episode of Alpha Trader features hosts Aaron Task and Stephen Alpher talking to the WSJ's Greg Zuckerman, author of The Man Who Solved The Market: How Jim Simons Launched The Quant Revolution. Already a highly accomplished mathematician and successful commodities trader, Jim Simons in his mid-40s wanted more, and took his particular set of skills to the far deeper world of stocks. Equities trading then (the mid-80s) was dominated by fundamental analysis, but Simons didn't know the first thing about dissecting a balance sheet or income statement. Simons (and team) relied instead on harnessing massive amounts of data into purely algorithmic strategies for trading stocks. Money soon began rolling in by the truckload - since 1988, Renaissance Technologies' flagship Medallion Fund has generated average annual returns of 66% and trading profits topping $100B. It's also changed the financial world. Today, so-called quants are the largest players in the markets, accounting for about 30% of stock trading. Renaissance is famously secretive, but Zuckerman somehow found a few to open up (just a bit), including Jim Simons himself. It makes for a fascinating story. Sorry, no trading strategies are revealed! Prior to their chat with Zuckerman, Task and Alpher mull last week's big move higher in interest rates. The surge in yields across maturities for now does away with the inverted curve, though it's only modestly sloped upward. The 10-year yield, however, remains relatively low compared to levels seen just a few months ago. Was last week's action the start of a larger trend? Also up for discussion is today's highly-anticipated launch of Disney Plus (DIS), and what that might mean for the world of streaming, Netflix (NFLX) in particular. At $6.99 per month, Disney's service is a good deal cheaper than Netflix's most popular plan. While large numbers of folks might not ditch Netflix for Disney, the days of Netflix's pricing power may be coming to an end.