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[D=E=Show] What is the former hedge fund "D=E=Show" by Amazon founder Jeff Bezos?



Roughly speaking

  1. Before starting Amazon, Jeff Bezos was an executive position at an investment fund (D=E=Show).
  2. Discovered an interview with D=E=Show at the Market Magician. He is also a super player who tries to conquer the investment industry from being a computer research specialist.
  3. The moment Jeff Bezos awakened to Amazon was when he was thinking about investment ideas for the IT industry on the D=E=Show. "I really wanted to start my own business."


The moment Amazon's Jeff Bezos sparked an idea for Amazon


May was a tough market. In contrast to the warm and warm markets in April, the sharp May market has arrived. It's time to calmly determine which stocks can expect good results. Previous articles on investment are here.


Meanwhile, after being baptized in May, I was reading the book "Market Magician Stock Edition Expanded Edition" that everyone reads when I was reassessing, and when I was interviewed, D=E=Shaw was being interviewed. Yes, it's D=E=Shaw, the founder of the legendary hedge fund where Amazon founder Jeff Bezos was once an executive.



This time we will introduce the episodes of D=E=Shaw and Jeff Bezos. By the way, first let me explain what a hedge fund is.


A hedge fund refers to a system in which profits are distributed by raising funds from multiple investors and actively investing them. Based on all information, we handle a variety of financial products including stocks, options, futures, foreign exchange, and bonds. And D=E=Show (the name of the company is the same as the company name) is a legendary fund that has achieved high returns through investment strategies that fully utilize computer science.



Who is D=E=Show?


D=E=Shaw was originally a doctor of computer science at Stanford University, and when he was a university student, he started a program compiler company and sold it. He was originally full of entrepreneurial spirit, and even when he was 12 years old, he was trying to raise money and start a film company. The theme of the doctoral dissertation is "Knowledge-based Exploration of Relational Databases," which is used in D=E=Show's buying and selling program, which finds distortions in current investment ideas. He has also started many famous companies since graduating from doctoral studies, but the most famous one is Junho Online Services (later AOL), which at the time handled Dial-Up's Internet Service Provider.


D=E=Shaw was interested in what human thinking is like as a research topic in life, and he studied how computer processing speeds can be slowed down due to computational constraints on CPU and memory, known as von Neumann bottlenecks, while achieving high computational power through interactions using synapses in the human brain. The world of finance was an ideal example of the application of this research.


While he was promoting his research in financial products, Morgan-Stanley invited him to become a research leader in the option trading system, and he was headhunted under extraordinary conditions, and eventually he ended up owning a hedge fund himself.


D=E=Show's strategy is extremely complex, a trade secret and has not been revealed at all, but based on all information, it creates and operates investment scenarios with extremely low probability of loss through automatic calculations using computers. Always look for market anomalies (which cannot be explained by the logic that this will happen, but for some reason, they tend to occur) and start looking for another anomaly before they become known to others. In particular, D=E=Shaw uses a lot of techniques that combine multiple strategies, and in an interview, finding market inefficiencies is extremely difficult and requires constant effort.


The most promising executive candidate D=E=Shaw focused on in recruiting personnel is Jeff Bezos, who later produced Amazon.



Meet Jeff Bezos and the trigger for the idea of ​​an online bookstore


When Jeff Bezos came to the interview, D=E=Shaw didn't immediately come up with the right position, but he had great intelligence, creativity and entrepreneurial spirit, so he decided to think about what to do after he hired it.


As D=E=Shaw and Jeff Bezos came up with ideas for new technology-related ventures, one of the ideas was a huge online bookstore using electronic trading. Ingrams, the major book dealer, has a huge book database, and by connecting it in a systematic way, it came to the idea that e-commerce transactions could theoretically be possible. Furthermore, the launch costs were estimated to not be too expensive.


Jeff Bezos told D=E=Shaw one day he "want to talk." As we were walking around Central Park together, Jeff-Bezos said, "The entrepreneurial bugs started making a fuss. What would you think if you decided to become independent and pursue your own ideas?" D=E=Shaw thought it would be a shame to lose any future executive candidates, but he also said that he wanted people to pursue business because he has experience in independent work. Jeff Bezos left the company, and when the first alpha version of Amazon was created, he brought it to the company and gave demonstrations and presentations to D=E=Show and his former colleagues. D=E=Shaw then experienced the first book order and realized how powerful the idea was.