By now many of you will be familiar with the investment record of Renaissance Technologies. A book on the subject came out earlier this month.
We can never completely rule out that this is a blind-folded monkey throwing darts. But if that is the case then it is one hell of a monkey. Or it's an 800 pound gorilla.
This performance is even more striking because the fund apparently employs few, if any, finance domain experts. Mathematician Isadore Singer described Renaissance as having "the best physics and mathematics department in the world". This capability is combined with a data-driven, quantitative approach across multiple asset classes, and a reported 2 day average holding period.
It's a powerful story of just what is possible with data, and I love it because of that. But unless you also have a team of world class scientists, their approach may not be one that you want to try to emulate exactly. There may or may not be room for a few more players deploying similar strategies to the Medallion fund, and at similar scale. But their very existence suggests that for many others with a quantitative focus, their efforts may best be expended by doing what the Medallion Fund does not.