Fastlane AMA: James Altucher; Startups, Publishing, Bloggin More...

[andviv]

Who are the three "best" investors you have met, and what impressed you the most about them?

 

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[andviv]

I struggle a lot with this situation... What is the one thing you do to help you balance your responsibilities as a father and as an investor/entrepreneur?

 

[adoredunchin]

1. What do you think about Kyle Bass' prediction on japan and the Yen ?

2. MJ said you are an expert in cold emailing. I couln't find anything in your blog. Perhaps you give us some thoughts about how to do it right, to whom, in what situation etc.

Thanks for taking your time to do this AMA!

 

[TopChef]

Some pundits are very negative on Americas future and seem to think China is poised to displace America as the economic superpower, while others think that Chinas success is largely fabricated and the general order of things will not change. Where on this spectrum do you stand?

Do you see the consumer market in America eroding to a point where we should start targeting consumer markets in other countries?

Is the end game that China gets reserve currency status from the rest of the world while the American dollar takes a dive?

Thanks James!

 

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[J. Altucher]

As a reader of books, I'm always on a hunt for more to read.

If you had to name only 2, 3 or 5 books that mentally had the biggest impact on you, what would they be?

Thank you very much for your time.

I read over 200 books a year so I would say MANY books have had a great impact on me. Books have an impact on me if they have one of three criteria:

A) they are incredibly well written, because this makes me a better writer.
"Ham on Rye" by Bukowski, "Another Country" by James Baldwin, "Jesus Son (stories)" by Denis Johnson fall in that category but there are over 100 more.
B) they increase my knowledge of an area. There is a category of books that I feel like my IQ goes up
"The Rational Optimist", "Abundance", "Regenesis"
C) they are inspirational to me.
"The Power of Now"

 

[J. Altucher]

Some pundits are very negative on Americas future and seem to think China is poised to displace America as the economic superpower, while others think that Chinas success is largely fabricated and the general order of things will not change. Where on this spectrum do you stand?

Do you see the consumer market in America eroding to a point where we should start targeting consumer markets in other countries?

Is the end game that China gets reserve currency status from the rest of the world while the American dollar takes a dive?

Thanks James!

A) Let's say China displaces us. Is that a big deal? They might get bigger in terms of GDP but they are a century away from the point where you can say: "I trust their court system".

It's more about contract law than it is about who has the biggest consumers.

B) Our consumer spending is at an alltime high. I'd be happy if we start selling somewhere else and our consumers start making more money but for now that has not happened. It doesn't seem bad to me though either way.

C) I focus on the innovations occurring in our economy: biotech, robotics, 3D printing, diagnostics, energy. We have a long way to go before countries catch up to us on innovation.

So it depends what metric you are using. But our public companies are so global anyway it doesn't really matter from a stock market point of view (or a consumer one) what economy is first in GDP.

 

[J. Altucher]

One of the segments of my business is in a rut. Coming up on 2 years of no growth, just maintaining. it contributes about 1/3rd to the bottom line. How do I kick it out of the rut, or should I just bury it in there?

Since it is actually kicking money to the bottom line , it's worth keeping.

But i'd spend time with your customers there. Do they need more services? Do they need more vendors (can you introduce them to anyone else who can help them. Oddly, this will bring you money in the long run).

Can you absorb up any of the costs?

Ask your customers for advice? Can they recommend any new clients? A flower needs a little bit of attention to grow. I'm sure you've put attention on it but bring you customers into the process.

 

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[J. Altucher]

2. MJ said you are an expert in cold emailing. I couln't find anything in your blog. Perhaps you give us some thoughts about how to do it right, to whom, in what situation etc.

Yes, there have been several situations where I've had no contacts, and even negative skilsbut needed to start building a network.

The key with cold emailing is
- have ideas
- subtle persistence

So instead of just sending out 20 emails to people saying, "can i buy you coffee" or (even worse) "I have a GREAT idea, can i just have ten minutes of your time" (nobody has 10 minutes, and billionaires don't need coffee from me), I would do this:

- I'd pick out 20 potential mentors
- I'd research every aspect of their business
- I'd GIVE them completely 10 ideas. Without asking for a single thing in return.

And hten I'd move on to the next list of 20. I'd do this every day. New 20 a day. And once a month I'd circle back and give MORE ideas. Never "have you looked at my email yet?" since that is rude and inappropriate use of THEIR time, which is the valuable resource here. My time was a commodity. I made my time valuable by giving FOR FREE, ideas.

Example: one of the 20, one day, was Jim Cramer. I wrote him 10 ideas for articles HE SHOULD WRITE. Not me. But him.

He wrote back, (the only one of 20 that day) and said,"you should write these articles!". Then 5 years later, after building up that relationship slowly and more slowly and with more ideas, he bought a company from me for $10 mm.

Another example:
I wanted to trade for Victor Niederhoffer (for many funds but he is the one who returned my email of abuot 40). I GAVE HIM software I had written that I had been trading off of successfully. I gave him all the code. Everything.

Then, he replied with questions. Then he asked me to visit and hang out. Then he asked me more questions. And more. I responded every time with code, with work, etc for free. Finally he gave me money to manage.

If he had not responded, then a month later I would've sent an email giving more ideas (maybe stock ideas, etc).

 

[J. Altucher]

Care to share your latest thoughts on Bitcoin? I remember reading a post of yours somewhere on bitcoin being utilized to do other things. What needs do you think can or will be solved by utilizing the blockchain?

Thanks!

For reasons I describe below: Bitcoin is a “choose yourself” currency.

Why is it “a Choose Yourself” currency?

It is not dependent on any one person (for instance, a Federal Reserve Chairman).
It is not dependent on a government (for instance, a government that relies on a fiat currency).
It is not dependent on complicated central bank operations to have the money transfer from one wallet to another (every wire or transfer from one human to another in US currency involves the central bank at some level unless it is in small amounts like a cash transaction).

Nor is it dependent on “In God We Trust”, a phrase that was invented in 1862 so Lincoln could take us off the gold standard, print money to fund the civil war, and rely on God and a little prayer that the fiat currency would work which, thank God, it did.

Here's the other important thing for bitcoin. It's not really a currency, it's actually a replacement for contract law in a way that paper money can never be. The cryptography baked into any cryptocurrency has actual value. Someone should set up a business with bitcoin as a replacement for:
- escrow agreements
- wills
- trade finance agreements
etc

There's various sites that go into this in greater detail but I'd recommend looking into these. Every startup in the bitcoin space focuses on brokering.

But
-merchant tools
- contract law

is a wide open gaping hole for a bitcoin startup and the money is there.

Finally, the US will never adopt bitcoin as a currency so I would not daytrade it. BUT, here's what will happen.

Some country will go "offline" due to corruption, bad economy, black market, etc. Argentina is my pick for this but could be Cyprus, Spain, etc.

Because the currency of that country won't be trusted, the black market will switch entirely to bitcoin. Bitcoin will then spread throughout the country.

When the country comes "online" again, the citizens will not trust the government currency and opt to go bitcoin. This will be a huge boost for that economy as it fits back into the global economy because the currency will be trusted.

And that's how bitcoin will gain in value and become accepted.

 

[J. Altucher]

Who are the three "best" investors you have met, and what impressed you the most about them?

#1 - The Best Trader In the World Worked for Bernie Madoff Altucher Confidential - the best trader I ever met worked for Bernie Madoff

- Another guy I know that just trades microcaps

- And finally, Warren Buffett.

The common thread between all of them: humility. They know they can make mistakes. They don't argue with the markets. They don't argue politics. THey don't argue with the machine. They don't have psychological hangups about whether they are right or wrong. They look for MASSIVE deals, they place their bets, they take their bets off quickly if they are losing.

Assume that when you put money in the markets that you are the fish at the poker table.

The other guys at the poker table are Bernanke, Putin, China, and Buffett. Don't argue with them if they all have aces and you have 2s.

Make sure you find a table where you can very clearly see your quantifiable edge. And if you are wrong, get up quickly and find another table.

 

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[J. Altucher]

How would you approach business owners with companies of 1 to 5 million dollars in annual turnover cold in an email or on the phone?
To establish trust, show you can deliver the results etc. The only thing I'm selling them on the phone and in the email is a free marketing audit that will give them the plan of how to increase their revenue - they don't even need me to implement it.

What I would do is find at least one business that you can work with where you know the owner. Every successful business I've ever worked with or started had someone thebusiness knew personally as a first client. Then you can really start to explore what the customer needs and wants.

You only think you know what the customer wants. I don't say this in a denigrating way. Every business thinks they know what the customer wants. But it's rare that a business actually knows deep down what the customer wants. So you need to work with many customers over a good period of time before you know what they want.

And during that time you will switch services, products, offerings, approach, etc several times before you settle on the approach that works.

But it all starts with working with a client(s) that you know personally first. Don't cold call unless you already have a track record and something you can show that has worked before.

 

[Jonleehacker]

My questions got skipped on the first page, so thought I'd try again...

I've read a lot of your blog posts etc and they really inspires me.

It seems to me the key factor in you being able to come back from the depths each time has been your Rolodex.

1.) What would you do if you were down and out again, but didn't have the list of important contacts at your fingertips that you had at the past?

And also, in this article you talk about how you self-published your latest book: How To Self-Publish A Bestseller: Publishing 3.0 | TechCrunch it is a great article and congratulations on the success of your book, but that article is more like "How to Self-Publish Your 5th Book" since you already had an established track record and you were purchasing services from the "best in world" to help you.

2.) Any adaptations to that approach that you would take for a first time author?

3.) You said in several places that you like to exercise your idea muscle by generating lists of ideas for businesses, book, articles etc. Makes a lot of sense. I do this as well. Then I end up with a problem: too many ideas that I want to work on, and not enough time or focus. Do you have any tips on how to prioritize, and then stick with one until it is completed properly... or is there an entirely different approach that you use?

Thanks!

Jon

 

[TedM]

James,
I'm joining the chorus of thanks to you for participating here.

I had a really powerful take away of your "give, give, give" approach from a talk you gave.

Here's my situation - I'd like to hear how you'd apply that:

I'm launching a new super high end european coffee bean subscription service (coffee o' the month....). It's a unique offering in a crowded field.

I want to get some publicity for it.

I have put together a list of 20 influencers who could do great things for my product, if they chose to write positively about me. Like Alan Richman, the food editor @ GQ; Christine Muhlke, an editor at Bon Appetit, etc.

I'm going to send each of these people a FEDEX envelope, with two packages of my coffee sent from Vienna, in this case. Nicely presented - with a note. The note will explain the coffee is my gift to them, etc.... and an ask if they like it - please let your readers know.

That's what I am thinking of doing.


==> What would *you* do??

Thanks!

 

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[J. Altucher]

1.) What would you do if you were down and out again, but didn't have the list of important contacts at your fingertips that you had at the past?

This is exactly what has happened to me EVERY time I have been down and out. Once you are down and out you might as well throw your old rolodex away. Nobody will return calls. Everyone will hate you and spit on you in the gutter of the street. All of the people you used to call "friends" will deny ever knowing you. And family members will say, "if only your dead father can see you now" or "i want to have nothing to do with you".

I'm a little bitter about it but, ok, I got it out there. Vented.

If I were down and out again I would do what I have always done in these situations:

- physical, emotional, mental, and spiritual health. Just focus on that every day. I describe that that entails in my book and in an earlier post on this forum.

- i'd start rebuilding my rolodex. How can this happen?

Remember: nobody will answer you if you ask: "hey, can I take you out for a coffee". Nobody needs your coffee.

But everyone needs ideas how to improve their life and business.

Everyone.

So come up with 20 people you want to meet, come up with 20 ideas for each one, and send them out.

Nobody will respond.

So come up with 20 more people and 20 more ideas.

What will happen is: you will get better at coming up with ideas that are valuable. Remember, when you start, you won't have good ideas. Your idea muscle has atrophied or has never been exercised. After awhile it will get exercised and strong and you will be an idea machine but until then you have to keep exercising and trying it.

Ideas don't come out of thin air. They are dug up in your consciousness. Which means you have to read constantly and you have to practice digging.

In terms of which ideas to follow: when you don't know or you feel out of focus, it means you are not also exercising the other muscles: physical, emotional, spiritual. Guaranteed if you do that, you will know which ideas to follow. Then you truly become an idea machine.

I don't' say this in some corny self-help way. I'm not selling anything. I'm just saying: this is the ONLY thing that has worked for me.

Here's one trick, though - if you are coming up with an idea for a business, always write next to it the first execution step.

So, one idea for a business is: "tourism on Mars". But I don't have an execution step there.

Another idea for a business is: "help people reduce student loan debt". I have an execution step there. It might be "research 100 ways to help kids reduce their student loan debt" or "find an email list of recent graduates and price out what it would cost to rent that list".

"tourism on Mars" actually might have an execution step: "call SpaceX and see what they would charge". But my guess is that is more of a long-shot.

"The smart toilet" might have an execution step: "call TROV and license their urinalisys that detects cancer test"

In any case: get healthy, become an idea machine, AND THEN your rolodex will naturally build up but not before.

 

[J. Altucher]

==> What would *you* do??

You have a good idea BUT: if someone just sent me coffee I'd probably not drink it. I like my own coffee.

BUT, think of ten articles about coffee you can write for each influencer, FOR FREE. Or better yet, ideas you would read if THEY WROTE IT. Or better yet, write the articles and just send them.

WHat are some ideas:

"How to tell the difference between GREAT coffee and BS coffee"
"How many cups of coffee a day does it take to lose 30 lbs?"
"Does Coffee Make You Smarter - the answer right here"
"The Coffee Map - where the best coffee in the world is grown".
"The Coffee Age Diet - How Drinking Coffee Will Help You Live to 100"
"The Connection Between Good Coffee and Alzheimers Prevention"
"When Is the Best Time Each Day to Drink Coffee?"
"How Coffee Helps You Make Money"
"Why Coffee Mixed With Alcohol Is Good For Standup Comics"
"The Secret ingredient that is ony in the best coffees"

And so on. Influencers don't need coffee. They need ideas to help them make their job better.

 

[J. Altucher]

2.) Any adaptations to that approach that you would take for a first time author?

If I were a first-time author I'd:

A) improve my writing by writing every day and reading every day and developing a unique perspective. This takes practice and time.
B) start blogging for very popular sites to improve my skills AND my audience
C) leverage that into linking to your twitter account and personal blog to improve your audience.

I started writing for thestreet.com. I leveraged that into the FT, and the WSJ. Then Yahoo Finance. Then huffpo, techcrunch, thought catalog, elephant journal, and other places. Then I started linking those articles back to my blog. Then I started holding a Q&A on Twitter. This is how I built my initial platfor.


Another way to do it is by publishing A LOT of books. You say you are a first time author. Tkae whatever you have and upload it and now you are done with that part. Then work on your next book. Amazon will build your audience also. Don't worry about the size of the book. Just upload a book and DO IT.

 

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[Kak]

James what do you think about the national debt? Continous budget deficits? The general direction we might likely follow going forward? Is Detroit leading the death spiral?

 

[Kak]

You also talk in depth about never wanting to own a home. Makes sense. (With property taxes you don't ever own a home you rent it from the government indefinitely anyway.)

What about cars? They seem to suck even worse. Lease every time?

 

[DavidofMN]

James,

Incredible stuff as always.

How do you handle focusing on more than one thing (a business, idea)? For me, when I try to do multiple things all at the same time I get poor results. Like if I am doing 5 projects at the same time I get 20% results on each project. Would you choose the one project that has the greatest potential then do that one completely first? Or something else?

Thanks.

 

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[J. Altucher]

James what do you think about the national debt? Continous budget deficits? The general direction we might likely follow going forward? Is Detroit leading the death spiral?

I think the national debt, Detroit, etc is going to lead to more money printing, eventual lack of faith in the US currency (depending on if there is any currency to take it's place, which is also unlikely) and inflation.

But technology is fighting that with various deflationary forces in all tech, energy, biotech, etc.

Who will win?

The politic-scumbag economy?

Or the innovation-opportunity-techno economy?

It doesn't matter.

But if you are always investing in innovation then in the long run you will win.

That's why I never think about the national debt. It's a waste of thoughts on my brain. Too many other people are thinking about it.

Let them think about it. They will either be right or wrong, like they always are.

But you will be right if you focus on what brings value to other people. That's where the money always finds itself.

 

[J. Altucher]

Would you choose the one project that has the greatest potential then do that one completely first? Or something else?

Two answers:

A) I do like to diversify my income by having more than one thing going on at the same time Right now I invest, I advise, i write, i speak, etc. And each thing I do either increases the value of my assets or I derive cash flow from it.

B) But ultimately I do have one thing that I love doing more than anything else and I try to limit and /or delegate the rest. Writing is the least lucrative thing I do. And some of my assets are the most lucrative things. But sometimes you don't always have the time or patience or desire to work on the most lucrative things. I try to keep them going as best as I can but make sure I don't spent an ounce more energy than I have to.

Very important to not eat junk food.

When you do something you don't like to do, it's like eating mental junk food. When you do something you love doing, it's like eating mental health food. Ultimately you want to be healthy to increase your net worth in as stress-free way as possible.

So limit the things you don't like (but delegate if you can or come up with better ways of doing them) and focus on the things you love doing and in the end you will make more money, even if the source of that money surprises you (which it alwasy does me)

 

[J. Altucher]

What about cars? They seem to suck even worse. Lease every time?

I do lease every time. But perhaps in this situation one should own. I don't know. I like to lease just because of a general philosophy of never owning has been the safest policy for me (in houses, in cars, in everything).

 

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[TedM]

BUT, think of ten articles about coffee you can write for each influencer, FOR FREE. Or better yet, ideas you would read if THEY WROTE IT. Or better yet, write the articles and just send them.

My idea muscle is not as well developed as yours (despite two hours of Talmud every morning), but I can sure come up with a few article ideas I'd love to read from each of them. So, I'll put that in the package along with the sun dried Red Iapar from Camocin, Brazil & a crisp dollar bill.

The thought of writing 10 articles each for 20 people makes me want to take a long nap.

so, pardon my obtuseness, but if I understand you correctly...I send out the first salvo of coffee + letter...And then follow up with other communications...offering ideas, an article if i can pull it off...and hope that they capitulate and acknowledge that indeed the European Coffee Society is a great topic to mention in print....or I run out of effort-muscle.

 

[J. Altucher]

but if I understand you correctly...I send out the first salvo of coffee + letter...And then follow up with other communications...offering ideas, an article if i can pull it off...and hope that they capitulate and acknowledge that indeed the European Coffee Society is a great topic to mention in print....or I run out of effort-muscle.

No, I would start out by building your brand through knowledge. What is the fastest way to get them to say "yes" to something. If they are a magazine editor then the best way to get them to say yes is if you offer GREAT content for FREE.

Email them (or write a letter. do both) and give them ten ideas for an article you can write. Don't mention your coffee at all other than to say you are the CEO of the highest quality coffee brand in Europe (I hope your website backs you up on that with quotes, etc).

Then offer ten ideas for articles that you know will appeal to their audience.

Get them to a yes.

Once they say yes, write the article. They will say yes again. They will say "Thanks".

NOW, you have them.

Drive to their offices, and share a cup of coffee with them. Your coffee. This is your way of saying thanks.

They will say, "THIS IS GREAT!"

Then say, "Let me ask your advice. How can I do more for your magazine, given the expertise I have with this coffee."

Then listen to what they have to say.

This is a process and it takes awhile but it is how I would do it.

My worry is: ifyou just send them coffee, they will not try it and you will never hear from them again. You won't have your opportunity to get them to "yes". Find the yes first.

 

[Rerun]

It sounds like you accomplish an incredible amount in a day, every day. Maintaining the 4 health areas, investing, writing, speaking, advising, building businesses, doing interviews, networking, reading.

I have some much I'd like to accomplish and mostly feel I just scratched the surface on any given day. How do you get so much done with so little time?

 

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[J. Altucher]

How do you get so much done with so little time?

Make a list of all the things you do today, from the time you get up until the time you go to sleep.

Now do what writers do: rewrite.

Take out eveerything that was not necessary. Don't bullshit yourself:
- was reading the newspaper necessary? There's really no news that is important, even for traders.
- was surfing the Internet necessary (other than this site, of course!)
- you checked your stocks 20 times. Maybe 10 would've been just as good.
- did you need to watch CNBC or even that sitcom?
- did you have to go downstairs and across the street for that mid-day coffee (which will keep you up late at night anyway since caffeine stays in the blood at least 12 hours)
- did you have to eat dinner? I ask this only half in jest. Will you starve if you don't eat dinner?
- did you have to return those phone calls today? I am very bad at returning phone calls so I am not the expert. But often, not returning them saves time.

Even on a deeper level:

- did you have to wake up angry at your partner and then have all those imaginary arguments inyour head?
- did you have to count your money 27 times in your head?
- did you have to worry about investments that you've researched a million times already

And so on.

I only say all of this because these are ways that I commonly waste time.

It's a lot of time that adds up.

Sometimes when I make this list it might add up to 1-5 hours a day.

one to five HOURS.

That's a lot of time.

Just try a couple of days of this. See what you can take it. I'm not saying "don't have fun". In fact, have more fun. I have more fun and less newspapers every day.

 

[lovecharm]

You know, I have just heard about you last night in this thread. And yeah, you are DAMN GOOD.

I have been doing the things that you have mentioned, eg doing face to face sales not over the phone (communication is 70% body language and 30% spoken words, so if you try to sell over phone then you only have 30% to play with), do whatever it is to get in there (in to the company) and then you can make profit later, give value first to get them to say yes and then you tell them what you want, work on all the things in life eg health, wealth and relationship.. Because if they are not balanced then you will really be unhappy..

So yeah, pretty good stuff really.. You are definitely a game changer here.. Mind you, I would never lease house or cars.. May be its just how we were brought up in south east asia.. It's all about ownership.. But I guess thats what makes us unique, because we will do things differently.

Now, my question will be.. I have already made my plans on this, however I just want to hear what YOU WOULD DO if you were in my position.

So here it is:- I am moving to LA to open up an office to sell clothing in wholesale (we are clothing manufacturer in Asia and produce clothing for brands like LEE, Wrangler etc). So will do a bit of market research on what is hot and not, what is the tax and VAT on imports, how much is the office and sales staff etc.

Now, if you were me then what would you do from day 1, if you were to set up a clothing wholesale company in Los Angeles (I picked LA as that seems to be the hot place for clothing, specially fashion district).

Thanks in Advance and oh, speed plus.

LC

 

[Vigilante]

Time for a quick commercial break.

Since nearly everything he has said already in this forum has the potential to change lives, I would encourage you to dig deeper. I just finished his new book Choose Yourself, and I am highly recommending it to friends. You can get more info on the book here:

Choose Yourself

Follow James on Facebook:
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Altucher Confidential

Leave a 5***** book review at
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That's one small gesture to thank James and MJ for their time. Do it!

 

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[Jake]

Mind you, I would never lease house or cars.. May be its just how we were brought up in south east asia.. It's all about ownership.. But I guess thats what makes us unique, because we will do things differently.

My wife and wife's family think I'm retarded because I like to rent. It's so much cheaper to rent out here, and I like the mobility, so I see no reason to buy(yet, or ever)

Owning doesn't make sense to me in most cases.. especially in Thailand where buyers pay a large premium over renters. Interest rates aren't nearly as good either.

 

[J. Altucher]

That's one small gesture to thank James and MJ for their time. Do it!

Thanks Vigilante