Here is Why Jim Simons is Beating the Market This Year

Jim Simons is one of the richest men on the planet. The reason is his high performing and highly envied hedge fund, Medallion Fund, which has not realized negative returns since 1990. Jim Simon’ Medallion Fund is the best hedge fund Insider Monkey has come across. In 2007, Simons returned 73% and in 2008 he returned 80%. The return is exceptional as such incomparably high returns were realized during the time of the financial crisis. We believe if he had started investing 20 years before he did, he would be the richest man on this planet today.

RENAISSANCE TECHNOLOGIES

Jim Simons exploits market inefficiencies through high frequency trading. He makes use of algorithms to assist in execution of large orders. Consequentially, Medallion faces high expenses and transactions costs. This explains the higher than average performance fee of 44% that Medallion charges. However, the 44% fee is quite irrelevant considering the fact that the fund’s investors are current and past employees and their families. Jim Simons is the largest investor of Medallion and owns approximately 25-50 percent of Renaissance Technologies.

Jim Simons currently manages $24.85 billion. In the first quarter of 2011, Jim Simons reduced Lorillard Inc (LO) by 38%, Apple (AAPL) by 58%, Chipotle Mexican Grill (CMG) by 28%, and Google Inc (GOOG) by 27%. Since the end of March 2011, Lorillard Inc (LO) returned 12%, Apple (AAPL) returned 7.2%, and Chipotle Mexican Grill (CMG) gained 14.4% while Google Inc (GOOG) lost 1.3%. Here are Jim Simons’ top 20 stock positions at the end of March:

Johnson & Johnson (JNJ) makes up the largest portion of Jim Simons’ diversified portfolio. He increased JNJ by 21% in the quarter ending March 2011. He currently has 6.69 million shares of the company worth $396 million. JNJ returned 6.8% since the end of March. He has the largest position in the company after Warren Buffet. Warren Buffet’s Berkshire Hathaway has 42.62 million shares of JNJ, worth $2.5 billion. JNJ is among Warren Buffet’s top 10 holdings (See Buffet’s other bullish stocks).

In the first quarter of 2011, Jim Simons purchased Target Corp. As of now, he has 3.82 million shares of the company worth $191.4 million. Target returned -2.3% since March 2011. He has the largest position in Target Corp. The company makes up 0.77% of Simons’ current portfolio. Larry Robbins’ Glenview Capital has the second largest position. Robbins increased his Target holdings by 18% in the first quarter of 2011 (check out Larry Robbins’ top 20 stock holdings).

Lorillard (LO) returned 12% since the end of March. Jim Simons has the largest position in the company with 2.7 million shares valued at $256.7 million. Despite the decrease of Lorillard by 38% by Jim Simons in the first quarter, the company still makes up 1.03% of his portfolio. He also has the largest position in the company. Jean-Marie Eveillard’s First Eagle Investment Management has the second largest position with 2.29 million shares of Lorillard (see Jean-Marie Eveillard’s top stock picks).

Alcon Inc (ACL) was a merger arbitrage play which was acquired in April. Therefore, Alcon’s return is for only a few days. However, his remaining 19 stocks returned 0.3% since the end of March vs. a 9% loss for SPY. Jim Simons is very successful at picking winners this year. This is why he is beating the market. Keeping in mind his current and previous performance, we believe investors can beat the market by imitating his impressive stock picks.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

The 20 Biggest Contracts in MLB History

The 7 Worst Blown Calls in Sports History

7 Free Ways to Advertise Your Business Online

The 18 Best R&B Songs of the 90’s

The 10 Most Dangerous States to be a Cop

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!