Jared: and how many trades are you making today?
Nemo: I'm not sure, exactly. I make a few trades a minute.
A few trades per minute?! he thought. That's pretty fast. That's like a trade every ten or twenty seconds.
Jared: what trades did you make in the last minute?
Nemo rattled off several trades. He seemed not to mind sharing his tips, his positions.
How much money is he moving? Jared had to know.
Jared: Nemo, excuse me if I'm wrong about this, but are you younger than the average investor?
Nemo: I am pretty sure I'm the youngest investor out there.
What does that mean? Twelve? Ten?
Jared: then where are you getting your money?
Nemo: I'm using an account my dad set up for me.
Interesting use of your genius child, Jared thought. Little Johnny's good with numbers. Chain him to this computer and put him on E*Trade.
Jared: is it real money?
Nemo thought for a minute.
Nemo: I don't know.
You don't know?
Nemo: I have a portfolio of $100,000 and I'm turning it into $10,000,000.
Jared laughed.
Jared: I'm afraid it doesn't usually happen that way, my friend.
Nemo: It's what my projections show.
Jared got an idea.
Jared: if you're so confident, then how about you back it up with another bet?
Nemo: Okay, I'll bet you $1,000 that my portfolio goes up at least 20x.
Jared winced. $1,000.
Jared: You'll have to tell me your trades as you go. So I can see it's real.
Nemo: Fine.
Jared: Then you have yourself a bet Nemo.
Nemo: The game is afoot.
He leaned back. A thousand bucks sounded like a big bet, but it wasn't to Jared. A thousand bucks was a lot of money, but there was no way this kid could win.
Opposable thumbs, he thought, and shook his head. If you multiply your money by twenty, I'll cut off my thumbs.
31 hrs to Birth
Jared was no stranger to stress, but he felt like his head was going to explode. He had worked straight through lunch without even noticing.
He had spent the last few hours copying and pasting. Nemo would IM him a trade, and he would copy the information from the chat window. Then he switched over to the window to a mini portfolio, one he started with about $50, and he pasted the trade into the portfolio. By the time he was done, there was usually a new trade from Nemo on the Google chat page. And he had to hurry to paste that trade into his portfolio, because he needed his portfolio to match Nemo's.
He needed his mini-portfolio to match Nemo's perfectly, to confirm that the results for Nemo's portfolio were absolutely real.
Something impossible was happening. Nemo was beating the market big time. Big time. Too big, impossibly big.
Some of the trades were big, and some were little. Some of them undid trades from earlier in the day. Sometimes he had made big, sweeping sales of almost his whole portfolio. Jared had been unable to detect any pattern to the trades. Nemo asked for advice throughout, once every couple of minutes or maybe even more.
Finally, the market closed: it was 4 p.m. Eastern Time.
Nemo had multiplied his money more than 20 times since Jared had started tracking his trades. His portfolio was up over 2,000%.
Jared sat back, mouth open, and looked out the window by his desk. It was impossible. And scary. If it was true, it was scary.
Dazed, he got up and went to the bathroom.
Buy and sell. All the kid had done was buy and sell, like any other trader. The game was the same: buy low, sell high. But the eerie thing was that the kid always knew. He knew when each stock was going to fall and when it was going to rise. Whenever he bought a stock, it rose. Whenever he sold a stock, it dropped. And he did it over and over.
Could this be luck? he wondered. Luck appeared to be out of the question. Each of the kid's specific trades contributed only a fraction of that gain. It was spread around in a bunch of trades. They were all making money — some a little, some a lot. If the kid got lucky that day, he got lucky hundreds of times separately. It couldn't be luck.
He washed his hands, coughing over the sink. What do I say to him? he wondered. He lathered his hands, scrubbing them over each other. What do I say, what do I say.
You can't tell a kid he's amazing. You praise him, regardless. But you have to be careful with kids. He might not even know he's amazing.
He returned to his desk. There was a message from Nemo waiting for him on the screen.
Nemo: I guess time is up.
He sat down and typed, the keys clacking with excitement.
Jared: You did a great job, Nemo! You should be proud.
Nemo: Thanks. Are you really going to pay me $1,000?
Jared: Of course I am.
No problem at all. By copying Nemo's trades during the day, Jared had himself made over $1,000. He wasn't losing any money.
Nemo: But I realized something, Jared. I am not investing real money. It is a simulation on a web site.
Jared didn't care whether the money was real. He had tracked the trades, and the trades were real. The decisions were real. If Nemo had been investing real money, he'd have ten million dollars. Jared would gladly pay a thousand bucks to meet the person who made those trades.
Jared: That's ok, Nemo. What's fair is fair. How bout I mail you a check?
If I mail a check, then I can find out where he is. And WHO he is.
Nemo: I don't know how to cash a check.
Jared: I could also write a check to your Dad.
There was a long pause.
Nemo: I don't know if he can cash a check for me.
Jared: Oh really? I think he'd be proud of you.
Jared shrugged with a helpless snort. Sure, why worry about getting your check? Why bother when you can basically PRINT YOUR OWN MONEY whenever you feel like it? Is this REALLY REAL?
Nemo: Jared, do you play any other games? Other than the stock market?
Everything is a game for me, Nemo, he thought.
Jared: I'm not sure what you mean, Nemo.
Another pause. The kid was rephrasing his question. Jared felt like he was talking to his nephew.
Nemo: Do you think if I played the market with real money people would bother me?
That, my midget friend, is the understatement of the century.
Jared: Bother you how, Nemo?
Nemo: I don't know... maybe try to make me stop playing.
Jared had been thinking along opposite lines. He didn't want the kid to stop playing at all; he wanted the kid to play for him. But of course, everyone else would want the kid on their team, too — or else they would try to stop him from playing.
He's starting to figure out he's valuable. Or, he knew it now. At the beginning of their bet, he hadn't known. He learned fast.
Jared: I'm not sure Nemo. Maybe so. It might be better if you didn't tell anybody about your portfolio yet.
Nemo: Okay. I'm not sure if I even care that much about the money... I just like winning.
Jared: That's great. But you may not want to play tomorrow. Winning can involve laying low sometimes.
Nemo: Victorious warriors win first and then go to war.
The statement was true, Jared reflected: the best traders make trades because they know they are going to win; by the time they are making the trade, they have already won.
They bid adieu. Jared signed out of chat and picked up the phone. This is absurd, he thought. It was impossible. But it had happened, as far as he could tell.
He dialed his phone.
“Hey! It's Jared. That's actually why I'm calling. Can we reschedule? I'm sorry, things are crazy here.... Yeah, I'm ok, just buried in work. I know! I know! It's crazy. I'll shoot you an email later, ok?”
He had to talk to Rob.
THE ULTIMATE WEAPON
29 hrs to Birth
For Rob Rice, who lived and breathed money, it was the opportunity of a lifetime — if it was true. Hell, if it was true, it was the biggest opportunity in a century or more. He couldn't afford to ignore an opportunity like that, even if it seemed unlikely.
Rob's appearance signaled money, and his actions were calibrated to create and attract wealth. When he put his phone on speakerphone and dialed it, with Jared on the other side of his desk, you knew what the phone call was going to be about: money, big money.
While it rang, Rob flipped through a transcript of the chat between Jared and Nemo. He was Senior Partner at the firm. He had little curiosity and little patience. He struck fear into the hearts of everyone at the firm, including Jared.
Someone answered over speakerphone. “Hello?”
“Hi, I heard the market value of your last Ferrari dropped,” Rob boomed, “and I wanted to make a lowball offer.”
The voice laughed. “Rob! Good to hear from you.”
The person on the other end was Ricardo Strombasti, a young Italian professor at the University of Chicago and an acquaintance. Dr. Strombasti was among the world's foremost authorities on the market. Rob and Ricardo had common interests — the stock market, and their personal car collections. Ricardo bought Ferraris, but Rob preferred Porsches. “What can I do for you?”
“I wanted to pick your brain for a second,” Rob said. He spoke loudly and slowly. “I have a friend here who's writing a movie script. He needs help with the plot.”
“Oh dear. Isn't that your specialty in L.A.?”
About half an hour earlier, Jared had walked into Rob's office and told him about Nemo and his portfolio. Rob was skeptical. But he knew that Jared was no sucker, and they couldn't figure out how Nemo had made so much money. So they decided to make up the movie script story and see what an expert — Strombasti — had to say about it.
“Yeah, well. In his story, an investor whiz figures out a way to make a thousand percent return in a day. What is the most plausible explanation we can give for that?”
“That's easy. Insider trading.”
Rob and Jared had already discussed the possibility of insider trading. After Rob's first reaction to the story (“impossible”), he guessed the kid was making insider trades — trades based on secret company news that would affect the stock once the news went public.
But this couldn't be a case of insider trading. There were too many trades, too many complicated trades, too many small trades. You'd need a network of spies in order to know all that inside information about companies. Having a network like that wasn't just illegal — it was impossible.
“No, not insider trading. Lots of trades. It has to look real. Something else. Maybe he figured out something new, or he has some special skill in the market. It's like he has a special gift or something.”
“Well, we're just in time for the January effect,” Strombasti chuckled. The January effect was a pattern of stock prices rising at the end of December. If you could predict a market pattern in advance, you could make trades taking advantage of that knowledge and make money. “But you know the story with that, Rob. You can't make money on that effect because everyone knows about it.”
“Maybe a new January effect? Something like it, but different?”
“That's not likely. That advantage would be gone as soon as everyone else learned what the effect was. Which would be really fast.”
“Right.”
“Plus, you know people have been looking for these effects. Looking for a long time. They aren't really there.”
“Right.”
“You know what I think is the most plausible explanation?”
“What?” He knew what Strombasti was going to say. It was what these academics always said.
“Luck. It could happen in one day, if you got lucky. And then the luck runs out.”
“Seriously? Rico, that's why they don't let economists anywhere near Hollywood.” They laughed. “All right, thanks for your time, my friend. We'll let you know when the movie is out.”
They hung up. Rob looked at Jared.
“Luck?” Rob scoffed. “No WAY it's luck.” He pounded a fist on the desk.
“It certainly doesn't look like luck,” Jared said, “with all those trades.”
“Maybe he's an idiot savant. Or he has just one trick up his sleeve. But he's got something.”
Impossible, yet true.
“Maybe he can see the future?” Rob asked.
They looked at each other for a moment and then burst into laughter.
Rob swore. “Whatever he's got, we have to get it. We can't afford not to.”
Rob thought, If this thing is real, whoever has it is going to win big — and everyone else is going to lose EVERYTHING. This kid is the ultimate weapon.
The door opened and a head popped in. “We have an IP address,” the head said. “Cambridge, Mass. In Boston.”
Rob had asked IT to figure out where the kid is, by using technical clues from the chat history stored on Jared's computer.
“An IP address,” Rob repeated. “Does that give us a physical address?”
“It's pretty close to tracking the computer where the chat was being sent from,” the head replied. “It gives us an approximate physical address.”
“Can we can get an exact physical address?”
The head paused. “Probably.”
Rob nodded. “Make it happen.”
The head understood: Rob Rice wanted a location, so the location represented lots of money. The head vanished.
We need to find him, Rob thought. We need to get him the away from the market for a minute. Before he plays again and attracts attention. Then we need to talk to him.
“We go to Boston,” Rob declared. “Just go and show up on his doorstep.” He slapped his desk. “The thousand bucks is our excuse. We can pay him his thousand big ones in person.”
“But how did I know his address?” Jared asked.
“We'll make something up. It won't matter. Maybe you chat with him and ask him.”
“That could work.”
“Then the kid's parents are there. ‘Yes, Dad, your kid got in a bet with me, and I'm here to pay him one thousand dollars. Yes, sir, your son is very talented. We want to help your son make you and your family some big money with the support of our firm.'”
They were quiet for a minute.
“Is someone else going to get to him first?” Rob asked. “This could be time-sensitive. Does anyone else know about him?”
Jared shrugged. “I can't say no for sure. The kid seemed... outgoing. Someone else might know. Probably. Someone probably knows.”
“We can't let someone get to him first.”
Rob pushed the conference phone on the table. “Dee, what's my schedule for tomorrow?”
“You're going to New York.”
“Change it to Boston. ASAP. Get a car outside to take us to the airport.”
“It might not be first class.”
“Whatever you can do. And Jared is coming. You can put him in coach.” He released the phone.
“Go get your stuff together,” he said, dismissing Jared abruptly. “Close the door on your way out.”
28 hrs to Birth
Rob mused in his office. He was tapping his toes and rapping the table with his fingers. They needed someone to guard the kid until they got there. Someone to protect their interests. He needed someone to make sure that they could find the kid tomorrow, that the kid wasn't going on vacation with his family to wherever people in Boston went on vacation for New Year's. And they needed to make sure that someone else didn't get to the kid first and whisk him away. That could not happen. Out of the question. It could get a little messy. They were talking about a big payoff and that meant people might be willing to break the rules a little.
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