YOUR FREE ISSUE OF…
HOW TO BE THE SMARTEST
PERSON in the room
ON THE PLANET
I was the dumbest person in my
graduate school program which is
part of the reason I was thrown out.
Stupidity plus immaturity and a
willingness to show off both quali-
ties is a bad combination. I thought
I was a cowboy. I would show up
to final exams having not attended
a single class, totally smashed from
the night before and not having
slept. I had semesters where I failed
every single class that semester.
INSIDE THIS ISSUE
11 or 12 Things I Learned While
Daytrading Millions of Dollars
I was a day trader for many years, and it
almost killed me.
Page 3
The Altucher Report Portfolio
Page 6
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to view my stock
portfolio!
I did everything you could possi- They
bly do to piss off as many people said,
as possible in as short amount of “you know something about that
time as possible and eventually I internet stuff. Get this thing on
got thrown out. Well, I got “asked” the internet. But be careful, we
to leave. I’m not defending my- keep some email servers on this.”
self. I took bad advantage of a great I destroyed that computer so badly
it had to be sent back to the manu-
situation I was in. They paid me a
stipend and I used it to do whatever facturer (Silicon Graphics) and it
I wanted to do. never came back. I was wearing a
suit that didn’t fit me. I never wore
Later, when I had to move to the suits. It was sunny
corporate world, I was out. I went outside to
the stupidest person Stupidity plus use the payphone. No
there as well. Probably immaturity and a sense making a call
because I failed to learn
anything in graduate
willingness to show like this from my cu-
bicle. I called my girl-
off both qualities is
school. I got the job friend in Pittsburgh
for various reasons a bad combination.
and told her I was
that had nothing to do about to be fired. She
with my abilities and so they didn’t was pretty happy about that. She
know what to do with me. I was wanted me back. Which, unfortu-
so impressed with everyone run- nately, was my worst nightmare.
ning around, knowing what to do,
knowing how to survive in the big Jolie Hunt at Reuters invited me
city. I thought to myself, “these are to a dinner a few months ago. I
the real people and I’m faking it.” was definitely 100 IQ points lower
than anyone there. Tina Brown was
On my second day they gave me a sitting next to me. Shawkut Azziz,
computer to put on the Internet. the former prime minister of Paki-
continued on next page…
stan was across from me. Padma
Lakshmi was next to him. I don’t
even know why I was invited. I
concluded during the dinner that I
must’ve done a favor at some point
for Jolie but I couldn’t remember
what it was. The list goes on of
the people at this dinner. Everyone
had something to say. One of my
favorite authors, Ken Auletta, was
drilling the former prime min-
ister about how much Pakistan
knew about Osama Bin Laden’s
whereabouts. I was deathly afraid
someone would look at me and
say, “well, what do you
think about all of this?
They are all smarter
What do you have to
than you. Which
say for yourself?”
means you have a
But after 40 years of lot to learn from
being the least smart
person in most situa-
tions that I’ve been put
in I’ve finally figured out how to
be the smartest person on the
planet.
The KEY: ALWAYS assume you
are the least intelligent person in
the room. Always.
Do this in every room, at every
dinner, in every situation.
Several things will happen:
A) You’ll listen and learn from
everyone around you.
They are all smarter than you.
Which means you have a lot to
learn from them. Sergey Brin has a
trick when he interviews people for
Google. He can tell within seconds
whether or not he is going to hire
someone. If he’s not going to hire
them he knows he still has to suffer something from someone and they
through another twenty minutes are done talking, then skip your
with them. So he always makes it turn to talk and let them talk again.
a point to learn at least one thing They’ll do it. Not because of arro-
from them so it’s not a total waste gance. It’s because they have more
of time. I do this with every person to teach you. So listen some more.
I meet ever. Because I happen to
know a secret about
them: they are smarter C) Now when they are done
than me. talking, ask at least one
This is not a false question.
humility. I haven’t They’ll do A and B again. You’ll
been very good at learn more. As I’m writing this it
them.
school (which is almost feels like I’m making fun of
probably why I write the people I’m listening to. But that
so many articles about why col- couldn’t be further from the truth.
lege is bad). And I haven’t made a
I’ll give you a quick example.
billion dollars despite the oppor-
I’m in a computer lab right now.
tunities I’ve had. I’ve made many
many stupid mistakes that I have Some guy, 31 years old, was just
a hard time forgiving myself for. sitting at the computer next to
I could’ve saved lives and instead me, looking for apartment rentals
I squandered them. I got good at in Houston. I asked him why he’s
squandering. moving to Houston. He just took a
job at ExxonMobil. I thought the
The good thing I have going for US had run out of oil, I said to
me is that I LOOK smart. I have him, immediately underlining my
curly hair and glasses. And I’m stupidity. He then explained to me
Jewish and people stereotype all
of the above. Oh, and I’m good at
how Texas has more oil than Saudi
Arabia with all the new techniques
chess. Which people also equate and technologies and fracking,
with intelligence but this isn’t true. etc. I thought “fracking” was from
Battlestar Galactica. He explained
B) When you’re done listening, the whole thing to me. He drew
diagrams of how the drills work.
listen to the silence. Of how oil and gas flows out of
Trust me, people never finish the rocks. I then googled it after he
talking. Once you’ve learned left to learn more and make sure I

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2 THE ALTUCHER REPORT

understood. I don’t know if Texas
has more oil than Saudi Arabia but
I certainly learned a lot more than
I knew two hours ago.
D) Intelligence compounds
exponentially.
It’s the “network effect”. In a
system (like the Internet) with the
network effect, the more people
that use it, the value of the entire
network goes up exponentially.
Which is why the value and profit
of companies like Facebook and
Zynga have gone up so fast com-
pared with companies in prior
generations. And why the entire
Internet exploded upwards like it
did. But in the case of intelligence,
the “network” is the neurons in your
brain. Learn new things and new
neurons wake up and start firing syn-
apses with each other, increasing ex-
ponentially the “value” (intelligence)
of the “network” (your brain).
So try this: be the least intelligent
11 OR 12 THINGS I LEARNED WHILE
DAYTRADING MILLIONS OF DOLLARS
I Was A Day Trader For Many Years, And It Almost Killed Me
I made money by making profits
on my own money and also taking
a percentage of the profits for the
people I traded for. I traded up to
$40 million or $50 million a day
at my peak. I did this from 2001 to
2004.
I learned about day trading but I
also learned a lot about myself and
what I was good at, what I was
horrible at, and what I was psy-
chotic at. Things that had nothing
to do with day trading.
Day trading is the best job in
the world on the days you make
money. You make a trade, then
person at every meeting and gather-
ing. You’re a spy, gathering all the in-
tel you can. Unlike everyone else at
the meeting, you are guaranteed to
learn something (because everything
people say is something you don’t
know, almost by definition). Because
of the compounding effect, at some
point, you will be the smartest.
E) Humility.
At the very least, assuming you are
smart, you will be able to practice
and cultivate a healthy humility,
which is never bad.
maybe 20 minutes later you are out
of the trade with a profit, and for
the rest of the day you think about
how much money you made.
It’s the worst job in the world on
a bad day. I would make a trade,
it would go against me, and then I
wanted my heart to stop so my blood
would stop thumping so loudly.
I did it for years, though, because
I was unemployable in every other
way.
Here’s what I learned. All of these les-
sons I will certainly use today, many
years after I stopped day trading.
But, you might ask: shouldn’t one
exude confidence and demonstrate
intelligence so people are impressed?
Answer: No. People will forget you.
Not everyone. But most. Because
that’s what people do. They move
onto the next thing. But if you
consciously cultivate humility and
learn from everyone you meet, you
will be the one who will never forget
them. And, before long, you’ll be the
smartest person on the planet. And
when the aliens land and say, “we
are going to talk to your leader”, ev-
eryone around you will be surprised
when the aliens go straight to you.
This applies not just to trading but
everything. You could be married
for 10 years and the next thing you
know you are divorced and you
would not have predicted that.
You could be healthy all your life
and drink your vegetables and ex-
ercise and reduce stress, and a year
later you could be dead from cancer.
You’d have much less stress if
you let go of trying to predict the
future.
You can always seek to increase the
odds in your favor. if I don’t jump
off bridges, for instance, it’s more
THE ALTUCHER REPORT 3
likely I’ll be alive a year from now.
But certainly a path to unhappi-
ness is thinking the future can be
predicted and controlled.
B) Hope is not a strategy.
If you get to the point where you
“hope” you don’t get ruined, then
you did something wrong before-
hand.
For instance, if you plan a wed-
ding outside and you don’t have a
backup plan in case it rains, then
you probably mis-planned your
wedding, unless you are getting
married in a desert.
“Hoping” is not a bad thing. I hope
that every day my life goes perfectly.
But if hoping is the only thing
I’m relying on, then it means I
didn’t really look at all the possible
outcomes of something that was
important to me.
C) Uncertainty is your
best friend.
A hundred percent of opportuni-
ties in life are created because
people are uncertain about almost
everything in their lives.
We are constantly trying to close
the enormous gap between the
things we are certain about and the
things we are uncertain about, and
almost every invention, product,
Internet service, book, whatever
has been created to help us close
that gap.
Sometimes this is hard. If your
husband betrays and leaves you,
you often feel like crawling on the
floor and burning all the self-help
books. They all lied.
It’s hard to feel “in the now” or to
“positive think” when life feels like it’s
over. I’ve tried. For me it’s too hard.
4 THE ALTUCHER REPORT
But at the very least you can say…
”help me.” You can say it to your
close friends. You can say it some-
thing inside of yourself.
“Help me” is the most powerful,
and most forgotten, prayer.
D) Taking risks versus
reducing risk.
Some people take too many risks
and they go bankrupt. This hap-
pened to me. And sometimes
people are too cautious and don’t
take enough risks.
When I first started day trading, I
was so afraid of risk that if I had a
small profit, I’d end the trade. But
then I would take big losses and
that would wipe out all my profits.
The key is that you can take larger
and larger risks if you work on
better and better ways to deal with
those risks.
For instance, I might be able to
risk marrying someone if I know
she is not a hard-core drug addict
who regularly betrays the people
she is close to.
I can risk driving without a license
if I always stay below the speed
limit (I know this is a stupid risk,
but still). Once you have a method
of reducing risks, it’s easier to
make trades or decisions about
anything.
E) Diversification.
Often I get emails, “I really want
ONE job but they don’t seem to
want me and now I’m miserable.
How can I get that job?”
Well…you can’t.
And you’re going to be unhappy.
You can’t wish yourself a job.
When I was raising money to day
trade, I probably contacted over
1,000 people. When I was start-
ing an Internet business I started
over a dozen Internet businesses
and watched all of them fail but
one. When I was trying to sell
my Internet business I contacted
over a dozen companies (although
Google broke my heart — damn
you Google!).
When I wanted to get married, I
went on lots of dates. Claudia’s
approach was even smarter — she
wouldn’t waste time with dinners.
She would only go to tea with
guys. Within the first 20 seconds
you know if you are attracted. So
keep it to a tea.
F) Say “no.”
In day trading, if something is not
working out, even if your heart
wants it to work out, you have to
say “No” and cut your losses.
If a business relationship is not
working out, don’t put more en-
ergy and time into it.
There is a cognitive bias called
“commitment bias.” We think
because we’ve already put time and
energy (or money) into something
that we have to stick with it. But this
is just a mental bias. Say no to it.
You have to decide every moment
if this is the situation you want to
be in.
Just because you were in the situ-
ation a moment ago, or yesterday,
or for 10 years, doesn’t mean the
situation is right for you anymore.
G) Health.
Day trading pulls everything out of
you. It sucks the soul out of your
body, blends it up, and then ex-
plodes. It doesn’t turn into a nice
smoothie. It explodes.
So you have to take care of your-
self. If you don’t sleep enough,
if you don’t eat well, exercise, be
around positive people, be grateful
for what you have, blah blah blah,
you will lose all of your money
and go bankrupt.
And obviously, this applies to
everything else in life. Every day,
what small thing can you do to
become a slightly better you?
The reason we get so attracted
to “safe” cubicle jobs is that the
pain is more subtle and sneaks
up on us. It’s not the
blender-drama of day
The only way to
trading so the need
survive is to laugh.
for health on a daily
basis doesn’t seem as
important. But it is.
H) Laughter.
The only way to survive is to
laugh. There’s that saying: “Man
makes plans but God laughs.”
Well, you might as well be on the
same side as God.
I) “This is crazy” means
you’re crazy.
I’ve seen it a million times. Guy
makes a trade. The market goes
against him. He says “this is crazy”
and puts more money into the
trade. And then he loses all his
money and goes crazy. I’ve had
to talk people off the ledge or tell
them to put the gun down.
The market is never crazy. The
world is never crazy. And I will go
so far as to say that your girlfriend
who just lied to you about where
she spent the night is not crazy.
I only care about
you. And you’re effin’
crazy if you thought
the world was going
to line up any other
way than the way it lined up.
Tough on you.
I know when I feel like, “ugh, this
situation is insane” that the first
place I need to look is at me.
I am insane.
J) It doesn’t matter if
a trade (or a day, or a life)
is good or bad.
Good and bad days happen. But
life is about a billion little mo-
ments that add up to all the things
around you. If you let one of those
moments have too much control
then you are bound to be mostly
miserable.
I was mostly miserable during the
period I was day trading. I let that
aspect of my life take control. So I
stopped focusing on being a good
husband, a good father, a good
friend, a good anything.
All of my other constituencies
went to hell.
I would have nightmares. I would
lose sleep. I would wake up many
mornings and go to the church
across the street so I could be by
myself and pray. What would I
pray? “Jesus, please make the mar-
kets go in my direction today.”
I’m Jewish. Nobody answered my
prayers.
THE ALTUCHER REPORT 5
K) It’s never about the money.
Every day I get emails like, “Can
you show me how to day trade?”
“NO!”
I know a thousand day traders and
only two that won’t go bankrupt. So
what makes anyone think they will
have an edge? How many people
listen to me?
make enough money to not care. To But we never learned that. We were
Zero. do it from anywhere. To be happy. taught we had to do something first
How come? to earn freedom. We were taught
It won’t work. But people don’t that suffering was the currency to
Because people are sick of their want to believe it. Most people
buy happiness.
lives, their relation- think they have that
ships, their jobs, one special something Okay, go do it. Then cry about it.
and all the lies that Most people think that will make it work Then get scared. Then curse the
have been told to they have that one for them. craziness. Then cry more. None of
them ever since they special something that will make you happy.
learned how to walk. that will make it And it’s true — they do
work for them. have that one special Then read this blog post again. Not
They want freedom something. But you because it will make you happy.
from the BS. can’t get there by day But because I like when people
I get it. trading first. You can skip right to the read my posts.
being happy part. You can skip right
Day trading is the dream. You can to being free. And laugh.

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6 THE ALTUCHER REPORT