Business

Billionaire Mathematician

although by the time I got to a thousand 24 or whatever it is I was had enough of it but I like I like math I discovered as a very young kid maybe for something called Zeno’s paradox Jabbar here of Zeno’s paradox my father told me that the car could run out of gas and I was disturbed by that notion it never occurred to me but then I thought well it should run out you could always use half of what it has and then they can use half of that and then half of that and if you go on forever and so it would never run out so now it didn’t occur to me yes but it wouldn’t get very far either but but the idea that in principle you didn’t have to run out of gas was a kind of a profound thought for for a very little boy did it feel like this was where your career was going to take you a we like another boy who dreamed of being a baseball or or something oh no no no the only thing I thought about was I would be a mathematician whatever exactly that meant I didn’t know quite what it meant except that mathematics was the only subject I really liked they wanted me to go to Berkeley and get away from mi t–‘s meet some new faculty because I was quite close to the MIT faculty and they thought I think they didn’t want to get rid of me so much as they thought I was probably pretty good so I should get exposed to a certain guy named churn who was just coming to Berkeley that year and I got this very nice fellowship and I went there I was very eager to work with churn meter and except he wasn’t there he celebrated his first year at Berkeley he had just come to Berkeley and he celebrated that first year by taking a sabbatical so he wasn’t there so I work with another guy which which was fine and by the time churn came in the second year I was already pretty far along with the what the thesis project I was giving a seminar at the beginning of my second year at Berkeley and in walked this tall Chinese guy and I said to guy next me who’s that so that’s churn that’s churn I didn’t know he was Chinese I thought churn was probably short for Chernov ski or something or he was probably some polish guy who who had shortened his name to churn if it had been Chen or Chen I would have known it was Chinese but churn with the are I don’t know but anyway so I met churn then and we became friends because I was much younger than he but we became friends and later collaborators so we work together and we came up with these results of his whole structure in fact there’s that’s the slides of the presentation to churn made in at the International Congress in the early 70s it was very nice geometry I pushed on with it and we defined some things called differential characters which was another chapter I with working with a guy named cheater but the chern-simons invariants about ten years later the physicists got a hold of it and it seemed to be very good for what ailed them whatever we might have hailed them and so and it wasn’t just string theory as I subsequently developed it was kind of all areas of physics including condensed matter there even some astronomers seem to want to look at those terms that’s really what’s great about basic science in this case mathematics I mean I didn’t know any physics it didn’t occur to me that this material that churn and I had developed would find use somewhere else altogether this happens in basic science all the time that one guy’s discovery leads to someone else’s invention and leads to another guy’s machine actually in the middle of my mathematics career which ended when I was about 37 or 38 was that I spent four years at a place called the Institute for Defense analyses down in Princeton which was a super-secret government based national security agency based place for code-cracking but I also learned about computers and algorithms and I did one thing there that was quite good because I can’t tell you what it was it’s all classified so I had a good career they are both doing mathematics and learning about the fun of computer modeling my father had made a little bit of money and I had the opportunity to try investing it and that was interesting and I thought you know I’m going to try another career altogether and so I went into the money management business so to speak so you started with some of your dad’s money and that got you a tiger and interested out some family money and then some other people put up some money and I did that no models no models for the first two years so what were you doing then you were just using cunning and you know just you know like normal people day like normal people do and I brought in a couple of people to work with me and we were extremely successful I think it was just playing good luck but nonetheless we were very successful but I could see but this was a very gut wrenching business you know you come in one morning you think you’re a genius the markets are for you we were trading currencies and commodities and financial instruments and so on not stocks but those kinds of things and the next Bond you come and you feel like a jerk the markets against you was very gut wrenching and in looking at the patterns of prices I could see that there was something we could study here that there will may be some ways to predict prices mathematically or statistically and I started working on that and then brought in some other people and gradually built models and the models got better and better and finally the models replaced the fundamental stuff so it took a while I would have thought with your background and mathematician this would have almost occurred to you immediately like you would have straightaway seen this well what was the two-year delay well two things I saw it pretty early but and I brought in a guy who was a wonderful guy also from the code-cracking place and he was I thought together we’ll we’ll stop building models that was fairly early but it wasn’t right away but he got more interested in fundamental stuff and he says the models aren’t going to be very strong and so on and so forth so we didn’t get very far but I knew there were models to be made then I brought in another mathematician and a couple more and a better computer guy and then we started making models which really worked but you know the the general there’s something called the efficient market theory which says that there’s nothing in the data let’s say price data which will indicate anything about the future because the prices sort of always right the price is always right in some sense but that’s just not true so there are anomalies in the data even in the price history data for one thing commodities especially used to trend not dramatically trend but trend so if you could get the trend right you’d bet on the trend and you’d make money more often than you wouldn’t whether it was going down or going up that was an anomaly in the data but gradually we found more and more and more and more anomalies none of them is so overwhelming that you’re going to clean up on a particular anomaly because if they were other people would have seen them so they have to be subtle things and you put together a collection of these subtle anomalies and you begin to get something that will predict pretty well it’s it’s what’s called machine learning so you find things that are predictive you might guess Oh such and such should be predictive might be predictive and you test it out in the computer and maybe it is maybe it isn’t what discipline of mathematics or disciplines is that multidisciplinary or we tell he’s mostly statistics mostly statistics and some some probability theory and but I can’t get into you know what things we do do use and what things we don’t use we we reach for different things that might come that might be effective I would imagine lots of people want to have be financially successful most pain most people want that of course I suppose and lots of people are good at mathematics and know a lot about computers like you know at your level I would imagine why did you do it why didn’t someone else do it I don’t know well first of all some other people have done it I think that we’re our firm is better but nonetheless I’m pretty sure of that but nonetheless other people have done some very good modeling and so we’re not alone but it’s not easy to do and there’s a big barrier to entry for example huge data sets that we’ve collected over the years programs that we’ve written to make it really easy to test hypotheses and so on the infrastructure is exceptionally good so everything is tuned right it took years to learn how to do that I know you guys made the model so you do have the ownership of it and feel proud of it but it’s hard to follow the model religiously like is it hard for your ego to think all the success is because of the computer like and I just I just sat there and watched no the computer just a tool that we use to be it’s a good cabinet maker doesn’t say it’s all because of my wonderful chisel you know you may have great film equipment but that’s not why you’re a success at doing what you’re doing you you working with good equipment but another guy would make a mess of it with the same equipment so no are we no we don’t feel oh the computer is doing everything the computer does what you tell it to do given that you will put some of it down to lug what are you more proud of all of this in the business or the all the mathematics from that first half of your career oh it’s in the extent that I’m proud I think I’m proud of both I think yeah I’ve done some mathematics and somewhat had a positive effect that I’m s I’m proud of that and I’ve built a nice business and I’m proud of that I don’t say I’m prouder of one than the other and now for the last number of years I’ve been working with my wife on this foundation which she started actually in 94 with my money but nonetheless she started the foundation and then I joined I got more and more involved with the foundation as time went on and now that’s my main thing you know I’m pretty proud of the foundation let me focus your focus you moron which the mathematics versus the business then would you would you trade any of your any or all of your business success for for being the man who cracked the Riemann hypothesis or something like that no that’s a good question huh when I trade that for well I probably trade some of it I mean for the Riemann hypothesis it would certainly I guess be a thrill to to solve the Riemann hypothesis I’m pleased mostly with what with the way my career has gone so would I trade part of it for something I don’t know it’s I’ve never looked back and said I wish at least in business I wish I hadn’t done that or I wish I had done this and not that whatever it is I’ve never looked back that way focused on support of scientific research primarily basic science but not completely because we have a large autism project which involves a lot of basic science but the but treatments are a goal but the rest is support of mathematics physics computer science biology of all sorts neuroscience genetics we support basic science and that is what we like to do there’s a certain amount of outreach we have a math or America Pro week we spend maybe 10 to 15% on outreach outreach and education but a 85% is supportive basically basic science you put a lot of money into mathematics so you’re you’ve got some right to comment on it how are you feeling about it oh I think mathematics is what is really going quite well worldwide the research end of it a lot of new ideas are coming up new fields or sort of are flourishing it feels like a pretty healthy Enterprise to me what’s not healthy is the state of mathematics education in our country that’s very unhealthy for young people that’s why we have we started this thing called math for America so on but we don’t have enough teachers in mathematics who know it and who know the subject and even of science and that’s it for a simple reason 3040 years ago if you knew some mathematics enough to teach let’s say in high school there weren’t a million other things you could do with that knowledge oh yeah maybe you could become a professor but let’s suppose you you’re not quite at that level but you you were good at math and so on being a math teacher was a nice job but today if you know that much mathematics you could get a job at Google you can get a job at IBM you could get a job and Coldman Sachs I mean there’s plenty of opportunities that are going to pay more than being a high school teacher right there weren’t so many when I was going to high school such thing so the quality of high school teachers and math has declined simply because if you know enough to teach in high school you know enough to work for Google and well they’re not going to pay that much in high school so how do you redress that how do we redress that as a country well you have so we work a person works for a combination of financial reward and respect right so a guy becomes Supreme Court justice he’s not doing it because he’s going to make a fortune he’ll be well-paid I suppose but you know Supreme Court justice everyone says that’s a big deal you have a lot of respect and you respect yourself presumably so there are many so you can’t pay let’s say high school teachers of math as much as they would get at Google but you can give them a bump pay the more we give people $15,000 a year more than they would make their regular salary but we also create a community of math and science teachers which they love and it makes them feel important and they are important do you give your money to basic research because you feel somehow indebted to it for your own success or do you do it to state of like a belief or do you feel that you’re giving something back to us till what gave something to you that’s an interesting question I do it because it feels good I like science I like to see it flourish I like to be around scientists I like to learn some new things my wife feels the same way she loves science so we’re very happy to to do this do I feel I’m giving back and especially you know I could give back in a lot of ways there’s a lot of things I could do besides support science do you have a favorite number seven next question do you have a favorite mathematician well Archimedes and Euler my current favorites but maybe you met somebody very impressed with those two guys thank you so much for so much of your time all right well this was quite a fun you

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