Jim Simons: "We never override the computer"

Billionaire-mathematician Jim Simons has been called the most successful investor of all time. His Renaissance Technologies hedge fund has returned an average of 40% returns (after fees) over the last 20 years. The firm uses proprietary mathematical algorithms and models to exploit statistical asymmetries and fluctuations in stock prices to leverage price differentials and make money. 

Simons had made groundbreaking contributions to algebraic topology before founding Renaissance, and his background enabled him to recruit top mathematicians, computer scientists, physicists and statisticians to the company. In fact the company actively stays away from recruiting anyone with a financial or Wall Street background.

I've been enjoying the recent biography of Simons, "The Man Who Solved the Market", by Gregory Zuckerman. But there's an interesting video of a Simons talk at San Francisco State University from 2014 in which he says something very intriguing about the models that Renaissance builds:

"The only rule is that we never override the computer. No one ever comes in any day and says the computer wants to do this and that’s crazy and we shouldn’t do it. You don’t do it because you can’t simulate that, you can’t study the past and wonder whether the boss was gonna come in and change his mind about something. So you just stick with it, and it’s worked."

It struck me that this is how molecular modeling should be done as well. As I mentioned in a previous post, a major problem with modeling is that it's mostly applied in a slapdash manner to drug discovery problems, with heavy human intervention - often for the right reasons, because the algorithms don't work great - obscuring the true successes and failures of the models. But as Simons's quote indicates, the only way to truly improve the models would be to simply take their results at face value, without any human intervention, and test them. At the very minimum, "simulating" historical human intervention is going to be pretty hard. So the only way we'll know what works and what doesn't is if we trust the models and let them rip through. As I pointed out though, in most organizations experimenters are simply not incentivized, nor are there enough resources, to carry out this comprehensive testing. 

Jim Simons and Renaissance can do it because 1. They have the wisdom to realize that that's the only way in which they can get the models to work and 2. They have pockets that are deep enough so that even model failures can be tolerated. Most drug discovery organizations, especially smaller ones, presumably can't do 2. But they could still do it in a limited sense in a handful of projects. What's really necessary though is 1. and my concern is that we'll be waiting for that even if we have the resources to do 2.

Review: James Hornfischer's "The Fleet at Flood Tide".

A superb book on the last year of the war in the Pacific Theater, full of incredible details about underappreciated leaders like Raymond Spruance (commander of the Fifth Fleet, the navy's primary strike force against Japan), Hollland Smith (head of amphibious operations), Draper Kauffman (creator of the Underwater Demolition Teams that later became the SEALS) and Paul Tibbets (pilot of the Enola Gay), along with other remarkable men and women, both American and Japanese. Among these were Guy Gabaldano, a Mexican-American marine who coolly talked 800 Japanese soldiers into surrendering and Shizuko Miura, an 18-year-old nurse, wise beyond her years, who held out on the island of Saipan.

The book is primarily about the invasion of Saipan, Tinian and Guam, the three islands constituting the Marianas that were considered crucial to staging air attacks by B-29s against the Japanese mainland. The brilliant island hopping strategy that King, Nimitz and Halsey orchestrated saw its culmination in the invasion of the Marianas, followed by the infamous battles of Iwo Jima and Okinawa. The sheer difficulties of logistics and air support involved in carrying out strikes against tiny specks of land separated by thousands of miles in the face of an implacable foe who has the home advantage are driven home well by Hornfischer. It was from Tinian that the Enola Gay and Bockscar that dropped the atomic bombs on Hiroshima and Nagasaki took off. The last part of the book deals with the aftermath of the bombing and the occupation of Japan.

There are two central themes pervading the book. One is the key role the navy and its aviators played in securing the islands. The other is the sheer fanaticism and tenacity demonstrated by the Japanese that convinced the Allies how expensive an invasion of Japan could be. The most horrifying description is regarding the mass suicides on Saipan in which - chilled into desperate fear by Japanese propaganda which warned the civilians of the untold horrors that Americans would inflict on them - thousands of mothers and fathers killed their children and jumped off the cliffs. The few Japanese who were actually captured by American soldiers were astonished by the humane treatment their received. The propaganda was so extreme that the Japanese people as a whole were getting ready to commit national suicide in the service of national salvation when the mainland was going to be invaded.

This played a critical role in the decision to use the bombs and Hornfischer is unapologetic about the decision. His main argument - with which I largely agree - is that the fanaticism displayed by the Japanese along with the paralysis that their leadership exhibited in sending out any clear signals to accept the terms of unconditional surrender made it impossible for the Allies to assume that Japan was anywhere close to surrendering. Later historians have always stressed that the Japanese would have surrendered if they had been allowed to keep their Emperor, a mortal descended from a God. But they never made this intention clear, and even when they did, it came with a list of other unacceptable conditions like retaining the authority to try their own war criminals. The unavoidable fact is that by the summer of 1945, the sheer barbarity and fanaticism of the Pacific War had made ending it a matter of desperate urgency. About the only two other options apart from using the bombs would have been a prolonged starvation of the Japanese people by the navy or an invasion that would have easily caused a quarter of a million casualties. 

Note that the question of whether the Allies thought that using the bombs was necessary is separate from whether the bomb *actually* caused Japan to surrender. The historical scholarship on that second question seems to mainly conclude that it was the entry of the Soviet Union through the invasion of Manchuria from the north that finally caused the Japanese leadership to surrender: curiously Hornfischer practically ignores a detailed discussion of this argument, which shows his bias a bit. But even if this is true, it ignores the fact that eventually it was Emperor Hirohito who really broke the deadlock; even *after* Nagasaki was bombed, the war leadership was still divided.

The book concludes by describing the American occupation of Japan which was unprecedented in its decency and progressivism; it was perhaps MacArthur's finest hour. The war against Japan and its subsequent occupation stand as a fine example of both the atrocities that human beings inflict on each other and the redemption that can salvage them.