Teddy Wayne: Kapitoil

I decide it is the first, as ultimately Jefferson could not claim responsibility because he would have to come to me for the program, unless he was skilled enough to decipher and recreate it from my proposal, but I do not think he possesses sufficient skills.

After several minutes I heal the virus and return it to Rebecca. Healing a virus is a delightful feeling, especially when you do it for someone else, because they previously thought their file was corrupt and lost but now it is healthy and accessible.

“It’s funny how you only seem to lose data that you really need, and not, like, idiotic joke emails your mom forwards you,” she says. “I owe you big-time.”

“You do not owe me anything,” I say. “We are coworkers, and coworkers are parallel to family members in that you do not incur debts.”

She looks at me with a strange expression. Then she says, “Okay. You’re a lifesaver, though. Thanks.” She contacts my shoulder as she says this, and then she retracts her hand as if she touched a hot stove. This is the first time she has contacted me.

I want to tell her that I do not 100 % agree with all rules of Islam, and that some of them are in fact impossible to fulfill while in a modern workplace, e.g., technically Rebecca and I are not permitted to be alone, and the only conversation we are allowed to have must be humorless (which is not difficult for me, because I am always humorless, but Rebecca enjoys producing jokes).

But I do not know how to explain this without making us both more uncomfortable, so I merely say, “You are welcome.”

At home I refine my program until it attains 8 % error range. On historical data, it averages daily profits of approximately 1.3 %.

This does not sound like much, but over 20 business days 1.3 % daily profits means that investing $1,000 in a futures contract on the first day, then using that new money to invest in another futures contract the next day, will yield by the end of the month $1,295. Of course, you are not guaranteed to make money each day, but this is a potential outcome: 29.5 % monthly profits.

And Schrub can invest much more than $1,000.

I rewrite my proposal to incorporate the new data, which takes a few hours. It is still not perfect English. I am about to shoot Jefferson an email again for help, but I stop. What if he did try to take responsibility before? This new idea is more secretive to boot. I could ask Rebecca, but I do not think she has access to the right people in quants.

Therefore, I decide to contact George Ray myself, except I am still uncertain if the program works, and I may look foolish again. But now I see my first program was too safe and conventional, and even if my program does not function, it is an ambitious idea, and I would prefer to fail with a big-picture idea than succeed on a small scale.

I email him:

Sender: Karim Issar

Recipient: George B. Ray

Date: Tue, 19 Oct 1999 22:23:06

Subject: 2nd proposal

Mr. Ray, I understand the previous quants program I created that Jefferson Smithfield showed you as a favor for me was not robust enough to risk investment. I have a new program that I believe works more efficiently. It is yielding 1.30 % daily profits in tests. My proposal is attached.

Then I begin the copyright process for my program with the Library of Congress.

I do not expect to hear from him for at least a few days, but one hour later I receive a reply:

You mean 0.13 % daily profits?

I write:

No, it is 1.30 %.

He replies once more:

Meet me in the conference room on 89 tomorrow at 8:30.

I reread that sentence five times. It is the happiest I have been so far in New York.

have a hard time dealing = have difficulty managing life

lifesaver = someone who helps another person in a significant mode

slave away at = labor diligently for

The layout of floor 89 is equivalent to 88, and the receptionist who wears makeup that looks like mud on her cheeks guides me to the conference room. Then she exits, and I sit alone in the room, which has dark blue walls and a projection monitor that is powered off and a long rectangular black table that feels like ice from the air-conditioning even though it is the middle of fall.

In a few minutes Mr. Ray enters. His hair is partially black and partially white and his skin is very pale. His fingernails have some dirt underneath and his armpits have small ovals of perspiration, but most people would not observe these things because he otherwise looks like an actor in an advertisement and his teeth are so white I can almost see myself mirrored in them, and I am also very aware of other people’s hygiene, e.g., Dan requires shaving twice daily and Jefferson’s ears contain wax. Rebecca veils the odor of cigarettes with perfume and gum, but she does not always succeed.

After he introduces himself, he holds up a printout and says, “Your proposal was a little vague on how accurate the program will be in the future.”

I intentionally did not include these data because I wanted to explain it in person, in case he thought it was too risky, and I also did not want to send any specific information about the algorithms over email.

“It currently functions for historical data retrieving back six months. It utilizes a signal that was present in that time period. Signals can convert over time. Therefore, this algorithm will not work as efficiently in the future, although the programmer can continue modifying the algorithm,” I say.

He scans the front page again. “I’ve read this three times over. These are absurd numbers — so absurd I can’t believe it’ll work. But if this program does even a quarter of what you say it will, we have something very special on our hands,” he says.

“It is extremely difficult to 100 % predict the future, but this is a new way that I do not believe anyone has thought of, and that is the critical idea, to do something no one else is doing so you have an advantage,” I say.

“I want to get this going immediately, so I’ll green-light you for a trial run the rest of the week,” Mr. Ray says.

My muscles relax for the first time all morning. I hope three days is enough time to prove its merit and that I have enough liquidity to make significant gains, even though the percentage gain is all that is important. The futures contracts trade at a minimum of 1,000 barrels, and the current price is approximately $22 per barrel, so I will need at least approximately $22,000.

“Is $300,000 enough?” he asks.

I pretend to be calm, although it is difficult, because I smile instinctively when I receive optimal news. “Yes, that should be sufficient,” I say.

We discuss how to set up a fund for me to use, which will use legal offshore accounts so that Schrub remains anonymous and does not create market disturbances. “By the way, what do you call your program?” he asks.

I had not considered this. Jackson Pollock did not name his paintings, but gave them numbers because he did not want people to have preformed thoughts before observing the painting. But my program is already about numbers, so it should have a title. I search my brain, and all I can think of is that my program capitalizes on oil prices, and it makes me think of the blended title of the song Dan was downloading.

“Capitoil,” I say. But if I am not going to get public kudos for my program, I want others to remember that it is Karim-esque. “K-A-P-I-T-O-I–L.”

“Kapitoil,” Mr. Ray says. “Nice play on words.”

I believe it is the first time I have played on words in English.

“Mr. Ray, may I request you do not reveal this to my podmates yet?” I ask before we leave.

“Yes. It’s highly privileged information,” he says. I do not say that that is not the primary reason I do not want him to reveal it.