Wall Street is flush with precocious 20-somethings filled with the sense of their own shattering brilliance, but if old Street hands are right, three Harvard- and MIT-educated millennials who’ve never come within a state’s throw of a Friday night midtown Manhattan happy hour may be on the cusp of engineering a genuine revolution in financial technology. And they’ve arrived at this point, appropriately enough, because of a bet.

A couple of years ago, Daniel Nadler, 29, told his friend Peter Kruskall, 26, that it was possible to model equity markets to show that individual stocks move in highly predictable cyclical and seasonal patterns. Nadler, who is completing a Ph.D. in political economy at Harvard University, had recently taken up residency as a visiting scholar at the Boston Federal Reserve, where his work focuses on tracking the asset allocation strategies of the 300 largest U.S. institutional investment funds. Kruskall had graduated from the Massachusetts Institute of Technology with a masters in computer science and was employed, at the time, as a software engineer with Google.

The two, Nadler says, had become acquainted during Kruskall’s time at MIT over their shared interest in Zen Buddhism. Kruskall’s reply to Nadler’s claim about financial market modeling was very un-Zen-like. “He said, ‘That’s garbage,’” Nadler recalls.

A challenge was born. “I said to him, ‘Give me one model that I can test locally myself with programming, give me a day to test it, and if it works out well, we can go from there,’” says Kruskall.

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