MISSING THE WOODS FOR TREES: WHEN JARGON TRUMPS BASICS

A year-old video of the late Jim Simons-the secretive mathematician behind Renaissance Technologies, often called the most successful hedge fund in history-has gone viral again on social media.

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In it, Simons breaks down the basics of investing: beta is the return you get from the overall market, like the S&P 500 index, while alpha is the additional return that comes independently of broader market moves.

With a hint of pride, he goes on to note that his famed Medallion Fund generated about 90-95% alpha, returns that were almost entirely untouched by normal market swings.

It's a fascinating glimpse into the analytical mind of a quantitative genius. But what's even more fascinating is how this explanation-though hardly new-has become viral fodder again in 2025, with retail investors eagerly dissecting alpha and beta in comment sections as if simply mastering the terminology might directly improve their returns.

Jargon without depth