The Man Who Solved the Market by Gregory Zuckerman

Author:Gregory Zuckerman
Language: eng
Format: epub, pdf
Publisher: Penguin Publishing Group
Published: 2019-11-04T16:00:00+00:00

CHAPTER TEN

David Magerman shut the door of his Boston apartment well before dawn on a cool morning in the fall of 1994. He jumped into a silver Toyota Corolla, adjusted the car’s manual windows, and headed south. The twenty-six-year-old drove more than three hours on Interstate 95 before catching a ferry to the tip of Long Island, arriving for a job interview at Renaissance Technologies’ offices in Stony Brook before ten a.m.

Magerman seemed a shoo-in for the position. Jim Simons, Henry Laufer, Nick Patterson, and other staffers were acclaimed mathematicians and theoreticians, but Renaissance was starting to develop more-complex computer-trading models, and few employees could program very well. That was Magerman’s specialty. He’d completed a productive stint at IBM, getting to know Peter Brown and Bob Mercer, and it was Brown who had invited him for the morning visit, giving Magerman reason to expect things to go well.

They didn’t. Magerman arrived exhausted from his morning journey, regretting his penny-pinching decision not to fly from Boston. Almost immediately, Renaissance staffers got under Magerman’s skin, presenting a series of difficult questions and tasks to test his competence in mathematics and other areas. Simons was low-key in a brief sit-down, but one of his researchers grilled Magerman on an obscure academic paper, making him work out a vexing problem at a tall whiteboard. It didn’t seem fair; the paper was the staffer’s own overlooked PhD dissertation, yet he expected Magerman to somehow demonstrate a mastery of the topic.

Magerman took the challenges a bit too personally, unsure why he was being asked to prove himself, and he overcompensated for his nervousness by acting cockier than he actually felt. By the day’s end, Simons’s team had decided Magerman was too immature for the job. His appearance added to the juvenile image. Sandy-haired and husky, with a baby face and rosy-pink cheeks, Magerman looked very much like an overgrown boy.

Brown stood up for Magerman, vouching for his programming skills, while Mercer also lent support. They both saw Medallion’s computer code growing in size and complexity and concluded that the hedge fund desperately needed additional firepower.

“You’re sure about him?” someone asked Brown. “You’re sure he’s good?”

“Trust us,” Brown responded.

Later, when Magerman expressed interest in the job, Brown toyed with him, pretending that Renaissance had lost its interest, a prank that left Magerman anxious for days. Finally, Brown extended a formal offer. Magerman joined the firm in the summer of 1995, determined to do everything possible to win over his doubters. Until then, Magerman had spent much of his life trying to please authority figures, usually with mixed results.

Growing up, Magerman had a strained relationship with his father, Melvin, a Brooklyn cabbie plagued with awful luck. Unable to afford a taxi medallion in New York, Melvin moved his family to Kendall, Florida, fourteen miles southwest of Miami, ignoring David’s heated protests. (On the eve of their departure, the eight-year-old ran away from home in a fit of anger, getting as far as a neighbor’s house across the street, where he spent the afternoon until his parents retrieved him.

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