The acknowledged quant king is James Simons, 69, an M.I.T.-trained mathematician with a groundbreaking theory that physicists are using to plumb the mysteries of superstring study and get at the very nature of existence itself. Simons turned his big brain on investing after his math career, founding Renaissance Technologies quant shop. The firm pocketed $1.7 billion in investor fees last year, among the highest in the industry. In return, his clients can reap annual returns of more than 30 percent, according to news reports.
As elegant as the models are, they cannot predict unpredictable events, or human panic, some traders say. Further, some say, too many quant funds are full of myopic brainiacs, overly reliant on their tools.
"Most are idiot savants brought to industrial proportion," Nassim Nicholas Taleb, former quant-jock and bestselling contrarian author, said by phone from Scotland, where he is promoting his new book on improbability, "The Black Swan."
"They are very smart in front of a textbook but not smart enough to understand very elementary things in reality," he said.
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