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

[MJ DeMarco]

Fastlaners!

I'm happy to announce that James Altucher will be joining us this week to participate in our very own AMA, or "Ask Me Anything". (Should start Monday, but please ask away!)

If you aren't familiar with James Altucher, here is his brief bio.

James Altucher has started and sold several business for eight figure exits. He's also started and failed at many businesses and has gone from millions to broke to millions several times. He is a successful trader, hedge fund manager, investor and sits on the boards of several private and public companies. He's a regular contributor for CNBC, WSJ, and other financial outlets and is the author of 11 books. His latest book, "Choose Yourself" (foreword by Dick Costolo, CEO of Twitter) was just released and instantly got on the WSJ Bestseller list. The book details how he "chose himself" for success to avoid the roller coaster ride and the specific techniques he used to achieve success both inside and out and how to stick with it (hopefully).

James' blog is also a MUST read, frequently linked here at the forum and always chocked full of Fastlane nuggets.

Altucher Confidential

James is also a successful author with his latest book, Choose Yourself. (Which has already been recommended here by several folks.)



To purchase the book, please VISIT HERE

And finally, please DO NOT speed me for this AMA -- all the "thanks" goes to Chris, or InMotion -- please SPEED him for putting this together!!

As for the AMA...

Here are some great topics where James has experience, successes, and war stories.

• -- Self-publishing
  
• -- Business startups and exits
  
• -- Cold-Emailing
  
• -- Blogging
  
• -- Investing, stocks, markets
  
• -- Losing money! And then getting it back!

PLEASE be respectful and try to steer away from questions which might be considered personally intrusive.

So without further adieu, if you have any questions for best-selling author, blogger, investor, internet personality, James Altucher, please fire away! (He will probably arrive on Monday).

Enjoy,
~ MJ

 

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[MJ DeMarco]

For starters, I'd like to ask James if he is still sticking by his Dow 20,000 forecast which I heard him speculate about 18 months ago on CNBC. So for, that prediction is holding more true than false!

 

[InMotion]

I want to thank James in advance for taking the time to do this...Thank You James!!!


Fastlaner's will also find a treasure trove of information from James at the following sites:

James Altucher - YouTube


http://www.quora.com/James-Altucher

 

[snowbank]

For starters, I'd like to ask James if he is still sticking by his Dow 20,000 forecast which I heard him speculate about 18 months ago on CNBC. So for, that prediction is holding more true than false!

Sticking with stocks, I'd also be interested in hearing his current thoughts on Apple. I have a very large bet on Apple, and know in the past James was super long on it.(I think $1k+/share prediction) Would love to hear his thoughts on if he still feels as strongly, or if things have changed enough to where he wouldn't bet too much on Apple anymore.

 

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[Jonleehacker]

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!

 

[tamo42]

This is a bit of a darker question. I've read several of your books and blog articles about losing everything and ending up on the floor.

What do you think it is inside people that leads them to lose it all? We see stories in the media over and over again showing the same sequence of events.

 

[Nosferatu]

Speed +++ Thanks inmotion.

I got a few questions i'm formulating - will edit.

 

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[Vigilante]

What are your thoughts on renting versus owning a home?

 

[J. Altucher]

Hey, thanks for the first question. I'll tell you a story. On July 5, 2010 (give or take a day), I went on CNBC with Nouriel Roubini and he said the market was going to fall 20% and I said it was going to straight up.

After it went straight up for about a year a guy from CSFB that I didn't know send us both notes and said to Nouriel, "hey, you should at least invite James to one of your parties".

Nouriel responded, "once the recession begins and we go down."

Well, I'm still waiting for my invite.

Nothing against him. A lot of people were wrong. I was wrong in 2008 but I held on and now the market is at all time highs.

People are worried the market will fall if the Fed tapers.

Two responses:

A) when the Fed tightens, historically the market goes up. A great example is Spring, 1999. The Nasdaq 100 went up something like 80% after that. And THEN it crashed. But don't get out now. Get out then!

B) We llive in a two economies:

- the poltico-econo-scumbag economy
- the techno-innovation-opportunity economy

both economies work together. Sometimes one wins. Sometimes the other. Sometimes they both win. The innovation economy is what will drive the future in the long run, though. And you just have to look at Williston, North Dakota, or Silicon Valley, or the latest in cancer diagnostics to see where that is going.

Unfortunately everyone on tv argues about the scumbag economy but I try not to listen to that garbage too much.

 

[J. Altucher]

Sticking with stocks, I'd also be interested in hearing his current thoughts on Apple. I have a very large bet on Apple, and know in the past James was super long on it.(I think $1k+/share prediction) Would love to hear his thoughts on if he still feels as strongly, or if things have changed enough to where he wouldn't bet too much on Apple anymore.

There are three "stacks" in the internet economy right now: from device to operating system to services to commerce in all areas: Google, Apple, Amazon.

I do think that lately Amazon and Google have been more innovative, which is why Apple has suffered. As well as the deadly onslaught of the S3, S4 and Note II from Samsung (and now the HTC-1). I don't care what anyone thinks of those phones, they are just as good as the iphone 5 depending on your preferences.

That said, AAPL is still one of only 3 players in the world providing EVERYTHING. AND Apple is a deep value play, trading at a cheaper multiple than Con Edison. So right here it's a huge buy. I definitely was wrong on the timing of $1000 though. I did not think Samsung would be the Apple-killer that they were. That said, I wouldn't be surprised to see a 50%+ move higher in next year.

 

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[J. Altucher]

What are your thoughts on renting versus owning a home?

I would never own a home. I give the reasons why here in detail: Why I Am Never Going to Own a Home Again Altucher Confidential

But a quick summary:

A) its a huge illiquid investment that you can never sell when you need to (the worst qualities of an ugly investment).
B) historically, housing has never been a good investment (everyone has anecdotes but look at the actual historical returns over the past century)
C) if you like it as an investment, then lever up and buy a diversified REIT. Much much safer.
D) opportunity cost. Instead of that huge down payment, plus mortgage interest, plus maintenance, I'd rather invest in a diversified basket of other investments to mitigate risks while still trying to capture similar or better returns.
E) I hate mowing the lawn or shoveling the snow or changing the air conditioner or fixing the plumbing. That's what landlords are for.
F) I like having cash in the bank. There's a reason houses are called a money sink. That's a nicer way of saying a money toilet.
G) I'm in a 5 year rental right now right on the river that I can easily make 10 years in a great house. There's always ways to do that. And whenever I want to move, I'll move. I am totally mobile.

 

[J. Altucher]

This is a bit of a darker question. I've read several of your books and blog articles about losing everything and ending up on the floor.

What do you think it is inside people that leads them to lose it all? We see stories in the media over and over again showing the same sequence of events.

Good question. I've really thought about that a lot and the result of that was my latest book. I wanted to understand, what made me make it (several times), and what made me lose it (several times). I've sold several businesses for 8 figures. I've made a bunch of good investments. etc Over a the past 15 years. But at least 3 times I went broke.

So the last time I was literally on the floor considering suicide so my kids could benefit from my life insurance policy I had to really ask, "what am I doing wrong".

And the answer is: who the F*ck cares.

The key is: start doing things right. That plugs the holes on the ship.

I don't want to sound corny but the key for me getting successful was/is:

- physical health
- emotional health - being around people who love me and who i love. people who inspire me and who i inspire.
- mental health - always exercising my idea muscle. becoming an idea machine.
- spriritual health - always exercising my gratitude muscle. every day being grateful for the abundance in my life.

Note, I was DEAD BROKE. But taking that attitude literally created magic. And whenever I stopped improving in those four areas EVERY DAY, I would squander that multi-body health and thus squander and lose my money.

I felt when I made money that "OK! I'm DONE! F*ck YEAH!" but money doesn't make a finished person. Money doesn't make a success.

Frankly, the only thing every that is important is that every day i focus on the above four areas of health. Else I fail.

 

[InMotion]

James, you stress the importance of learning how to sell in several of your talks.

How did you learn to sell?

Was it trial and error application for you or did you learn from a specific person...?

 

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[tamo42]

Ok, so the daily practice keeps you in shape. Check.

Just out of curiosity, what is your take on Taleb's thesis that risk is mispriced in the markets?

 

[J. Altucher]

James, you stress the importance learning how to sell in several of your talks.

How did you learn to sell?

Was it trial and error application for you or did you learn from a specific person...?

Initially, I wrote an answer to this here: The 10 Keys To Selling Anything Altucher Confidential

BUT, I want to update that with a quicker response:

basically, do whatever it takes to "find the YES". This doesn't mean push on the client until they say yes.

- will they say "yes" to anything? Then do it to get your foot in the door. In my above post I talk about the lifetime value of a client. If the lifetime value is there, then say "yes" to anything to get the foot in the door. For instance, I gave up 50% of a company once because I knew that would get them to "yes" on everything else I wanted, which was worth millions.

- if they are saying "No" then
a. be like water on rock. eventually water withers rock. send updates every month. make intros. add value to their business without asking for anything in return. send them clients, etc.
b. diversify who you are selling to. quantity is quality in selling.

How did I learn this? Trial and error and lots of failure. For instance, cold calling never works. But I learned quickly that if I'm in a room with someone and I can get them to say yes to anything, then I have the deal.

Btw, this doesn't mean "kiss a$$" until they say yes. It means understanding their business as well as they understand it so when you say something they say "YES! THat's IT!" and when they negotiate on price you can just say "YES!" because the lifetime value is worth a lot more than that initial deal.

 

[GuestUser8117]

Thanks a lot for doing this James.

1. What are your biggest mistakes?

2. How long did it take to make your first million, or in another words be financially successful?

3. What is your favorite method of investment?

4. Have you had success changing your habits related to losing "all" your money?

Don't feel the need to respond if one of the questions above is too personal. Thank you.

 

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[J. Altucher]

Just out of curiosity, what is your take on Taleb's thesis that risk is mispriced in the markets?

I know that is Taleb's thesis but I think the way he presents it is incorrect. A couple of comments:

A) Even if risk is mispriced it's very rare that you can take advantage of it. The Black Swan event happens, but not every day. Or even every year or even every decade. So just knowing risk is mispriced can help you hedge assets but not make money.
B) In "fooled by randomness" I felt his theory was beautifully written. BUT, I thought his examples were off. In each example, basically a trader would follow his model, make a lot of money, then start losing money, then go crazy.

Not every trader goes crazy when his model is off. That's what separates out the pros from the guys who are fooled by randomness.

A very common saying in quant rooms is..."The model works...until it doesn't." Ultimately trader psychology is just as important as the model. There's no black swan when the psychology is right.

 

[socaldude]

Hi James, thanks for doing this.

A couple questions:

1. What would be your biggest piece of advice for someone wanting to become a better writer?

2. What resources would you recommend for someone wanting to learn more about investments if your knowledge is about intermediate?

 

[J. Altucher]

1. What are your biggest mistakes?

My biggest mistake is not having all my relationships in balance when I needed them to be. This is the cause of problems.

Here's an analogy. There are various groups vying for power in Egypt. When they get along, all is good. When they don't get along, actual armed revolt and violence happens.

It's the same thing with the self. If I am unhappy in marriage or relationships or partnerships or even with myself (if I want love too much or if I am filled with regret or anxiety) then I might survive for awhile and even succeed and make millions for awhile but eventually revolt will result and what happens afterwards is disastrous.

This is a coy answer. I can say my biggest financial mistake was investing $2 million in the GoAmerica IPO and watching it go to $0 or making a series of investments in private companies and not following up on them, or starting companies that were doomed to crash, or not hedging when I should've or whatever.

But the reality is, the different factions inside of me were not forming a good "democracy", I wasn't healthy on all levels, and revolt would result. And I would lose money. And not just in 2000. But in 2004. 2008 and maybe alittle in 2010 before I finally said, "enough is enough". Now every day I make sure I keep all the voices in balance.

 

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[J. Altucher]

2. How long did it take to make your first million, or in another words be financially successful?

I didn't try to make a million until 1995. Up until then I wanted to be a broke novelist or TV show writer. But then I started a company. I had the benefit of it being the Internet super years. But then I had the opportunity to start from 0 again in 2002 and from 0 again in 2008 after making millions each time.

The first time: I started a company making websites. We had every entertainment company as a client. We sold when I realized jr high school students were making websites. I cashed out of it in 1999-early 2000. So I would say 4-5 years.

In general, I think it always takes five years from scratch.

A) you read everything you can about an industry
B) you start "doing" (about six - 12 months in)
C) you start getting a good reputation and getting paid (about 2 years in)
D) you start getting paid a lot (about 4 years in)
E) you sell or cash out in some way or make a deal or get paid a big number (about 4-5 years in)

 

[J. Altucher]

3. What is your favorite method of investment?

4. Have you had success changing your habits related to losing "all" your money?

My favorite method of investment is cash. I now love cash. Having cash in the bank makes me sleep at night. After that, I love when I can find opportunities for other people that are really good and I pool money together, make the investment, and take a fee on the money invested. I love to diversify and mitigate risk where I can. In every case of investment I like to find a HUGE arbitrage that nobody is aware of. I do this through constant talking to hedge funds and other investors and diveersify my investments. No SINGLE INVESTMENT makes up more than 1-2% of my portfolio when I initially invest.

 

[J. Altucher]

1. What would be your biggest piece of advice for someone wanting to become a better writer?

Iwrite about "33 unusual tips to becoming a better writer" here: 33 Unusual Tips to Being a Better Writer Altucher Confidential

BUT, two or three quick tips that are the most critical:

A) Write EVERY day. Example: Stephen King, one of the bestselling writers ever (whether you like him or not, he's a pro) was once in an accident and couldn't write for two weeks. As he writes in "on Writing", he literally forgot how to connect words together when he sat down to write again. He had to get back in shape. That's how fast the writing muscle atrophies. And that's on the bestselling writer ever.

I write 500-5000 words a day, 7 days a week.

B) If it doesn't Bleed, it doesn't Lead. Don't tell us "top 10 ways to diet". Tell us YOUR story of dieting and how it failed and how you were fat and the girls made fun of you and then how transforming your body transformed your entire life. THEN tell us how.

Bleed, then entertain, then educate. In that order.

C) READ. I read 3 hours a day at least. Read GOOD stuff. Not stuff on the Internet.

 

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[J. Altucher]

Hi James, thanks for doing this.



2. What resources would you recommend for someone wanting to learn more about investments if your knowledge is about intermediate?

Read re-read "The Essays of Warren Buffett" by Lawrence Cunningham. The reason is: an investment really is about buying a piece of a business. So if you haven't run a business, you want to make sure you have the feel of someone who does so you know the subtleties of what to look for.

There's a way to skip this: which is that if people smarter than you are investing and have done all the due diligence, and if you are staying diversified, then by all means invest alongside smart people.

If Buffett buys common stock, of say Coca-Cola, and then KO goes down, it's like Buffett is managing money and I'm getting in at a discount ot him. Which is pretty good. Then do that across all super-investors, across all industries. A good strategy.

 

[J. Altucher]

Thanks a lot for doing this James.



Don't feel the need to respond if one of the questions above is too personal. Thank you.

Don't worry about that. I don't give a shit about personal.

 

[Sir Ingenious]

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.

 

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[healthstatus]

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?

 

[JEdwards]

I don't have any questions, Just wanted to say, I have read your blog for years. and it has always made me laugh. Thanks.

 

[Kak]

Loving,Choose Yourself, James. I am 2/3 of the way through. I'm a new fan.

 

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[Jake]

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!

 

[Netprofit]

I'm a marketing consultant. I'm aiming to get my first client within 2 weeks. I'm prepared to do everything, cold call, email etc. The offer I have is a no brainer. I guarantee that I will increase their revenue with 10% within 90 days without them having to spend more money on advertising or work harder or doing anything different right now - or their money back.

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.

Would appreciate if you could share the most important things you know from experience that I have to think about when cold calling and cold emailing. And would be cool if you could narrow down a little specifically to what I am going to do.

Thanks James. Appreciate your blog and will buy your book.