Inspired by Boston Fintech, Written in Reflection

Mukul Pal

Deep Tech Founder | Author of “End of Passive Investing” | Quant

Published Sep 21, 2025

Boston Fintech Week, 2025. My third time in the city, but this one felt different, heavier, like a reckoning. Every visit to Boston has marked a stage in my research journey, and this week was no exception. I found myself walking along Seaport Boulevard, watching the runners cut across the crisp morning air, and thinking about how, twenty-five years earlier, a single email from Boston had altered the course of my life. That message, like a billiard ball nudged into motion, has been ricocheting ever since—sometimes hitting the edges, sometimes pausing, always restarting, until it finally landed me here.

I still remember the moment clearly. The year was 2000, and I was seated in my cubicle on the 21st floor of the Bombay Stock Exchange building, the Feroze Jeejeebhoy Towers. The internet was still young, emails were precious, and each one felt like a portal. One arrived from a man named Kaushik Matia at Boston University. He explained he was working with Professor Eugene Stanley on understanding Indian stock market returns. Stanley, a physicist who had studied everything from DNA to water to cities, had shown that markets followed the same universal laws as earthquakes. They called it econophysics.

At that time, I was already a minor curiosity in India’s financial world—the country’s first derivatives analyst, with two years of experience and a youthful confidence that comes easily in emerging markets. Expertise needs experience, and a little knowledge can make you feel like a genius. I loved teaching and research, and the BSE’s training division, with its marble floors and auditorium that looked out onto the Arabian Sea, became my laboratory. It was, in a sense, my own fintech sandbox where I could experiment, teach, and think.

When Kaushik asked for Indian market data, I jumped in. Research was my karma. By the time I saw the final paper, I realized that a new door had opened. Stanley’s work revealed power laws, fat tails, scaling behavior. Markets were not neat Gaussian curves—they were living, fractal systems. That discovery changed me. I could no longer look at modern portfolio theory or behavioral finance the same way. They were useful, yes, but incomplete. Without the lens of science, markets remained half-read.

Years later, in 2014, I came to Boston for the first time. I took a train from Philadelphia with my friend Richard Rhodes then a hedge fund manager, and together we walked into Harvard Management Company with the nervous excitement of founders bearing an idea too early for its time. Our pitch was simple: augmentation. Machines and humans could work together to build better portfolios.

The response was courteous, even encouraging, but I caught it in the air—the chuckle, the half-smile, the circumspection. Alpha? Possible? Really? The disbelief was palpable.

That disbelief has followed me like a shadow. The question I’ve been asked more than many others has followed me across cities, conferences, and years: “If you believe in alpha so much, why don’t you set up a hedge fund and milk it away?”

It is a fair question, but also the wrong one. Hedge funds solve the absolute return problem. They are risk-taking machines. The index fund problem is different. It is a statistical, low-frequency problem rooted in winner’s bias. When 50% of a portfolio is concentrated in a handful of names, it isn’t common sense to say nothing can be done. It simply means no one has solved the problem yet at scale.

And so the disbelief feeds on itself. First, they demand a billion and three years. Then a hundred billion in ten. Finally, a trillion. Yet even if an app crossed that threshold, the verdict would be the same: “alpha doesn’t matter—it’s only about assets.” Proof, always postponed, never accepted.

The only way to break the circle is not to argue, but to build. My shortcut is straightforward: rebuild SPDRs on an app, automate 300 top assets ETFs into digital portfolios with low tracking error and slow rebalancing, and charge only for alpha—after a year. Let adopters decide. When they see the difference, the revolution will not come from talk, but from use. Machines will not just sense alpha; they will deliver it.

I recall sitting through the first MIT Fintech program in 2016, listening to David Shrier introduce a session by saying alpha was hard and falling. It was a popular refrain. But to me, it was a superstition—an echo of the old belief that indexes were efficient, invincible, untouchable, and that machines or physics had no role in finance. I was shocked when I saw my name in the top list of fintech ideas that year.

My view was the opposite. The future for me was of increasing alpha. Think about it: when every investor in the world owns a hyper-personalized portfolio, with unique allocations and timing, my alpha has no correlation with yours. Alpha has to rise before it can ever peak.

The non-leveraged arbitrage machines that could absorb this excess do not yet exist. They will take decades and enormous pools of capital to develop. In my lifetime, I don’t expect alpha to be arbitraged away. What I do expect is a trillion-dollar robo app in self-directed investments—an app that rescues the active industry and the active managers, as the individual investors buy active funds, active strategies and reclaim the narrative from the myth of index fund invincibility.

When that happens, trillions of dollars will flow into the hands of individuals who for too long have been shut out of wealth generation.

Boston has always been a city of thinkers, and some of its greatest have shaped me.

Eugene Stanley gave me the courage to see markets as physics, to look for universals. Paul Samuelson gave the world courage to build index funds, but also made two mistakes. He rediscovered Bachelier yet assumed normality in markets that were anything but. And he never challenged the mathematics of indexing or the embedded winner’s bias, which statisticians like Fisher had already flagged. In not questioning it, he helped entrench the very skew that today challenges market integrity.

Robert Solow reminded us that economics has no “theory of everything.” Andrew Lo tried to bridge ideas with his Adaptive Markets Hypothesis, but what he offered was philosophy rather than mechanism. I challenged his thesis, and I look forward to that conversation with him in person. And then there is Herbert Simon, who revealed that preferential attachment—the rich getting richer—was not a metaphor but a mathematical truth, the seed of the very bias I now critique.

Economists gave us ideals. Physicists gave us universals. My work has been to build the missing piece: a mechanism and a machine.

That mechanism is statistical architecture. Reversion and diversion cycles. The 3N model of memory, boundaries, and oscillation. Together, these explain not just the rich getting richer, but the poor getting poorer, the reversals, the persistence, the full cycle of markets. Alpha is not a hunch. It is the property of this architecture.

The machine is Alpha tech, which puts the architecture into practice: clean data, statistical classification, portfolio construction with disciplined rebalancing, real-time risk switches, and governance. Alphabots can do this. And when deployed through apps, they can shift alpha from myth to reality, from privilege to ubiquity.

And so, Boston, full circle.

In 2000, an email from BU lit the spark.
In 2014, a pitch at HMC proved too early.
In 2025, Boston Fintech Week felt in tune at last.

And how could I not fall in love with the city itself? The Federal Reserve Boston’s striking architecture, the great Boston Fintech team, Sarah Biller’s energy, Nicole Edwards’ thoughtful listening, Gretchen Wilson’s empowerment, the powerful women in fintech, the incredible speakers. The sharp venture minds, the government leaders like Jeevan Ramapriya. The Fed canteen on the fourth floor, where you sit beside brilliant economists over onion rings and salad. The gentle Uber drivers, the Harpoon IPA, the clean streets, the runners along Seaport Boulevard, the fifteen-minute ride to Logan—and that sudden sense of standing at the edge of revolution when you step onto the 12th-floor terrace and look out at the iconic Custom House Tower.

Boston has a way of mixing the cerebral with the human. And I, in turn, can’t wait to be back in November—for another round of alpha generation.