00:00
And so if somebody's listening and they're like, okay. Cool. You made millions. How did you go to zero? So what what what was happening? What how were you making money? And how were you taking it to zero? Were you just making wild bets or what happened? Yeah. Yeah. What were your, like, hits? I imagine you've had, like, three hits. Yeah. I would say it's more, like, five or six hits. Again, for better or for worse, I needed all five or six. But,
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the first one, again, working at HBO,
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and I made their website.
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And
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at the at the time,
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other entertainment companies and other companies, they didn't even know what this internet web thing was. This was in nineteen ninety five. And
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Companies like American Express,
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American here's what happened. American Express would call Arthur Anderson, which was their accounting firm, And, you know, Arthur Anderson famously went out of business,
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in in a scandal six years later, but American Express called Arthur Anderson said, can you make us a website? Arthur Anderson said, sure. Well, they're gonna charge you millions of dollars. Arthur Anderson would then call another software consulting company, and they would say, yeah, we'll charge you a million dollars. The software company would call me because nobody knew how to make a website in nineteen ninety four and nineteen ninety five. So I would say, sure. I'll do it. And then suddenly, They pay me and my brother-in-law,
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two hundred fifty thousand dollars to make american express dot com. So that was one of our first websites.
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And I my salary at HBO at the time was forty thousand a year. So my brother-in-law and I, we made hbo dot com, then we made
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websites for everything from
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Warner Brothers, Sony, Disney, BMG,
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all the record labels, like, We did every gangster rap record label. Bad Boy, loud records,
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Jive, death row, interscope.
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We did the movies for the matrix,
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and many other movies. But anyway, that was And were these built websites at that time? Like, if you looked at that website today, what would it look like? Is it like a Craigslist?
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You know what? That's a great question. So, no, it doesn't look like Craigslist. I wish it did, but,
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design web design back in those days. So I was a software guy. My brother-in-law was a design guy.
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Web design back in those days was very heavy. So there would be, like, big, heavy images and animations
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using Flash or Yep. You know, some
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mac I forget the company macro something. And,
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there were there were very heavy designs, not that usable.
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And
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but, yeah. I mean, they were okay. They're they were admired back then. So the website for the Matrix was a great website.
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Which, you know, on on archive dot org you could find or HBO's website was a great website, but it wasn't as functional as all websites are now. It wasn't very easy to navigate. And what did you walk away with at the end of that?
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About
02:43
fifteen million. And then Holy fuck. Yeah. So cash, not not like so a lot of people then you know, went public or sold and they got paper. And then they died in the dot com bust because the paper went to zero. The stocks went to zero. So I had enough sense at, like, the peak in nineteen ninety nine, I cashed out. And I had the cash in my checking account. Like, I didn't even But what do you mean cashed out? Were you getting, like, stock in these com I mean, I Yeah. So so no. No. I sold the company to a company that was rolling up web design for web agencies. And so we in a sense, that was how we went public. Like some company that made, I don't know, vacuum cleaners or whatever decided to get into the internet business in nineteen ninety eight and acquired us And so suddenly they were an Internet company, and the stock went from three to forty eight. And I cashed out with, literally, at the peak, with about a little over fifteen million, almost sixteen million cash.
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And
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and here I was. I was smart every step of the way. Like, I knew that the web
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design
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development business industry was going away because they were teaching
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web you know, how to make a website in junior high school classes I knew this was going away. I was smart. I sold the business. I cashed out as fast as I could. And then
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I became everybody, you suddenly when you when you make money at one thing, suddenly you think you're a genius at everything or at least this happened to me. When you make money at one thing, suddenly you think you're a genius at everything or at least this happened to me. And everybody would come to me and say, hey, how can what what should we invest in? Or you know this internet thing. You you You have, like, curly hair and glasses. You must know how this all the this internet stuff. You're you look like a technology guy. What should we invest in? So I start thinking, oh, I must be really smart at this. And literally, I poured all this cash back into
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internet investments
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after I cashed out of the internet.
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And
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it it really went and then I also I bought, like, a huge apartment
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in New York City. And
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the one thing I was doing that everybody thought I lost all my money on, but it wasn't. I was I was gambling every single day. Like, I was playing poker for three hundred sixty five straight days. I played poker at least eight to ten hours a day. Was gonna ask you if you're a degenerate gambler because you kinda have that. I mean, you you sound liked it before you told me you're a gambler. But but but that's just it. Poker was the one thing I probably should've stuck with. Like, I was doing well at poker, and it was right before po the poker boom took off. When I decided, you know what? I'm just gonna focus on starting new companies and internet investing. And I stopped playing poker
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like, in, you know, right at the end of nineteen ninety nine, I started a venture capital firm, and I just started investing
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money. And Was was your firm all your money? So your firm No. No. We raised we raised two hundred million dollars. Like Holy fuck. That was the other thing too. I didn't have any experience
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doing any of this stuff. I didn't know anything.
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I I'm trying to remember all investors,
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c s first Boston,
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Deutsche Bank, like all these major banks, gave us money. And then another company in Vescorp,
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which is a major private equity firm,
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gave us a hundred million.
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And
05:56
and then I started investing my own personal money side by side with the fund and then other investments, and I started buying stocks.
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All the way down. So how long total was to zero? From fifteen to zero, how long was that?
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I was losing about a million dollars a week in the summer of two thousand.
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And
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and I just didn't know what I was doing. And it wasn't even that I didn't know how to invest. I didn't know
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There's so many other skills to investing than knowing what companies are good and what companies are bad. Like, I didn't understand risk. I didn't understand money management. I didn't understand
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you know, had a I really didn't understand anything then about investing. Like, I was an idiot. And I went to zero by
06:38
right around mid two thousand one, I put up my I was desperately putting up my apartment for sale because maybe I would have some money left I stopped paying my mortgage, and maybe I would have some money left after putting this apartment up for sale. I lived two blocks, three blocks from
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a a little building called the World Trade Center,
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and we were getting an offer
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on September eleventh And, of course,
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many worse things happened that day than me not getting an offer from my house, but,
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nine eleven happened, and we couldn't sell then because we were part of the crime scene.
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And,
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you know, just I went totally Were you home broke? Were you home now? I was at the World Trade Center. So Oh my god. Which I don't really
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I don't really talk about because a, it sounds unbelievable, but b, it also many worse things happen to people, to many more people than me that day, obviously. But My business partner and I were there was a Dean and Deluca in on the first floor of the World Trade Center. We ate breakfast there every day, and then we would day trade the markets.
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And,
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at that point,
07:43
I was starting to come back a little bit from day trading, and I had written some software and and so on. And
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Then we're walking
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to my home where I had my office, and we my partner turns to me and says, is the president coming into town today? Cause this I look up, and there's this plane
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that's just, like, right overhead. And then, boom, we watched it go right into that, like, physically we watched it, not on TV, but, like, physically, we saw it go right into the building,
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and everybody on the street instinctively
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ducked.
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And
08:14
And your your brain does weird things. So my I started thinking to myself, like, my my business partner's name's Dan. He said, we're we're we're being attacked. And I'm like, no. No. No. That was that was just an accident. Like, and no one's no one's it's too early. No one's in the building.
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Like, my brain was telling me this, even though it was a quarter to nine AM. And,
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you know, how do you remote control? Whatever it was, a seven forty seven into the World Trade Center, but that's what my brain was telling me. So we run to the buyer station,
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and we say we wanna help.
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And these guys throw two fireman suits at us and say, get this on. We're gonna go straight over there. And
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we start putting it on, but then they say, wait a second. Are you guys Fireman. And we're like, no. We just wanted to give blood or whatever we could do. And they're like, no. No. No. Only fireman.
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And that fire station was the Duane Street fire station. A hundred percent of those people died. We went to the World Trade Center that morning. And
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And then from, you know, it's there's a a bad day, but
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that kind of clinched me losing everything also because I had been invested in the stock market that morning and boom, everything kinda went to went to zero after that. And then I was just
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desperate for, like, a year and a half. Couldn't sell the place.
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Couldn't there were no jobs. I was an idiot. Nobody would I had no friends anymore.
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And, you know, I had to
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I had to teach myself how to invest. So I wrote
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some software
09:45
where I,
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took every piece of data about every single stock since World War two and looked
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for patterns
09:54
you know, when would I would have my software find statistically significant patterns
09:58
where trades were good. So I would try to model
10:02
let's say fear and greed in the markets. And and and it worked pretty well. Doesn't it wouldn't I don't think that strategy would work now, but it worked then because there weren't there wasn't that many quantitative
10:12
investors in the markets then. This was kind of the beginnings of that. And so I was very successful with it, and that kind of kept me alive. And that's how I bit by bit I started
10:23
learning about investing. This gave me time to actually learn the skill and and talk to people who were experts and professionals and and really learned that I started writing about investing,
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and I started going on CNBC, and I started a hedge fund, and I start I wrote my first book about investing. And so gradually, I built these two careers. One in the hedge fund business and the other in writing about
10:47
investing and going on CNBC.
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And then I built,
10:51
so I was doing deals also then and making money. And then I built a a website
10:55
that combined my interest in web development with investing. It made like a social. I called it the MySpace of Finance because MySpace was big then. And
11:04
sold that, say, and that was, like, my next big hit, sold that for ten million.
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And
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You know, and then a year later, I was broke again.
11:14
And that's the things like that just kept happening.
00:00 11:20