In this interview James Altucher recounts his roller‑coaster entrepreneurial journey. In the mid‑1990s he and his brother‑in‑law built high‑profile websites for HBO, American Express, major studios and record labels, earning $250,000 for AmericanExpress.com and eventually selling their web‑design firm to a conglomerate at the 1999 dot‑com peak for about $15‑$16 million in cash. Believing his internet expertise made him a universal investor, he poured the money into new internet ventures, a venture‑capital fund backed by major banks, and an intensive poker habit. Lacking investment skill, he lost roughly $1 million a week, and by mid‑2001 his fortune was gone, a process accelerated by the September 11 attacks that halted a property sale and wiped out his day‑trading positions. Forced to relearn investing, Altucher built quantitative trading software that exploited early‑stage market patterns, launched a hedge fund, wrote books, appeared on CNBC, and created a finance‑social site that sold for $10 million—only to lose it again later. He describes the cyclical nature of his successes and failures, emphasizing lessons about risk, money management, and the perils of overconfidence.
Chapters
And so if somebody is 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 3 hits.
Yeah. I would say it's more like 5 or 6 hits again, for better or for worse, I needed all 5 or 6, but, um, the first one, again, I was working at HBO and I made their website. Uh, and at the, at the time, other entertainment companies and other companies, they didn't even know what this internet web thing was. This was in 1995. And companies like American Express, American— here's what would happen. American Express would call Arthur Andersen, which was their accounting firm. And, you know, Arthur Andersen famously went outta business, uh, in, in a scandal 6 years later. But American Express called Arthur Andersen, said, can you make us a website? Arthur Andersen said, sure, we're going to charge you millions of dollars. Arthur Andersen would then call another software consulting company and they would say, yeah, we'll charge you $1 million. The software company would call me because nobody knew how to make a website in 1994 or 1995. So I would say, sure, I'll do it. And then suddenly they'd pay me and my brother-in-law, uh, $250,000 to make americanexpress.com. So that was one of our first websites. And I, my salary at HBO at the time was $40,000 a year. So my brother-in-law and I, we made HBO.com. Then we made websites for everything from Warner Brothers, Sony, Disney, BMG, all the record labels. Like we did every gangster rap record label, Bad Boy, Loud Records, Jive, Death Row, Interscope. Uh, we did the movies for The Matrix, uh, and many other movies. But anyway, that was—
and were these built up websites at that time? Like if you looked at that website today, what would it look like? Is it like a Craigslist?
Well, you know what? That's a great question. So no, it doesn't look like Craigslist. I wish it did. But, uh, design, web design back in those days. So I was a software guy. My brother-in-law was a design guy. Web design back in those days was very heavy. So there would be like big heavy images and animations using Flash or the Yep. You know, some Mac, I forget the company, Macro something. And, uh, uh, they were, they were very heavy designs, not that usable. And, but yeah, I mean, they were okay. They, they were admired back then. So the website for The Matrix was a great website, which, you know, on, on archive.org you could find, or HBO's website was a great website, but it, 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?
Uh, about, uh, $15 million. And then, oh, 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 1999, I cashed out and I had the cash in my checking account. Like I didn't even want to—
What do you mean cash out? Were you getting like Stock in these comp— I mean, I understand.
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 1998 and acquired us. And so suddenly they were an internet company and the stock went from 3 to 48. And I cashed out with literally at the peak with about a little over $15 million, almost $16 million cash. And here I was, I was smart every step of the way. Like I knew that the web design development business industry was going away because they were teaching web, you know, how to make a website in junior high school classes. So I knew this was going away. I was smart. I sold the business. I cashed out as fast as I could. And then I became, everybody, you You suddenly, 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, what should we invest in?" Or, "You know this internet thing. You have curly hair and glasses. You must know all this internet stuff. You look like a technology guy. What should we invest in?" So I started thinking, "Oh, I must be really smart at this." And literally, poured all this cash back into internet investments after I had cashed out of the internet. And it really went. And then I also, I bought like a huge apartment in New York City. And the one thing I was doing that everybody thought I lost all my money on, but it wasn't, I was gambling every single day. Like I was playing poker for 365 straight days. I played poker at least 8 to 10 hours a day.
I was going to ask you if you're a degenerate gambler because you kind of have that. I mean, you sound like that before you even told me you were a gambler.
But, but, but that's just it. Poker was the one thing I probably should have stuck with. Like I was doing well at poker and it was right before the poker boom took off when I decided, you know what, I'm just going to focus on starting new companies and internet investing. And I stopped playing poker like in, you You know, right at the end of 1999, I started a venture capital firm and I just started investing money.
And was your firm all your money? So your firm, like, no, no, we raised, we raised $200 million. Like, holy fuck.
That was the other thing too. I didn't have any experience doing any of this stuff. I didn't know anything. Um, I, I, I'm trying to remember all investors. Uh, CS First Boston, Deutsche Bank, like all these major banks. Gave us money, and then another company, Investcorp, uh, which is a major private equity firm, uh, gave us $100 million. And, and then I started investing my own personal money side by side with the fund and in other investments, and I started buying stocks all the way down.
So how long till it went to zero? From $15 million to zero, how long was that?
Um, I was losing about $1 million a week in the summer of 2000, and 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. 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, you know, how to, I really didn't understand anything then about investing. Like I was an idiot and I went to zero by right around mid-2001. 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 2 blocks, 3 blocks from a little building called the World Trade Center, and we were getting an offer on September 11th. And of course, many worse things happened that day than me not getting an offer for for my house, but 9/11 happened and we couldn't sell then because we were part of the crime scene. And you know, it just, I went totally, totally broke.
Were you home? Were you home when that happened?
I was at the World Trade Center.
Oh my God.
Which I don't really, I don't really talk about because A, it sounds unbelievable, but B, it also, many worse things happened to people, to many more people than me that day, obviously. But my business partner and I, there was a Dean and DeLuca. In the, on the first floor of the World Trade Center. We ate breakfast there every day, and then we would day trade the markets. And at that point, I was starting to come back a little bit from day trading, and I had written some software and, and so on. And then we're walking 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 that's just like right overhead. And then boom, we watched it go right into the, like physically we watched it, not on TV, but like physically we saw it go right into the building and everybody on the street instinctively ducked. And, 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, 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. Like my brain was telling me this even though it was a quarter to 9:00 AM. And you know, how do you remote control a, a, whatever it was, a 747 into the World Trade Center? But that's what my brain was telling me. So we run to the fire station and we say we want to help. And these guys throw two fireman suits at us and say, get this on, we're going to go straight over there. And. We start putting it on, but then they say, wait a second, are you guys firemen? And we're like, no, we just wanted to give blood or whatever we could do. And they're like, no, no, no, only firemen. And that fire station, it was the Duane Street Fire Station. 100% of those people died who went to the World Trade Center that morning. And then from, you know, it was a bad day, but that kind of clinched me losing everything also because I had been invested in the stock market that morning and boom, everything kind of went to zero after that. And then I was just desperate for like a year and a half. Couldn't sell the place, couldn't— there were no jobs. I was an idiot. Nobody would— I had no friends anymore. And, you know, I had to teach myself how to invest. So I wrote some software where I took every piece of data about every single stock since World War II. And looked for patterns. You know, when would I would have my software find statistically significant patterns where trades were good. So I would try to model, let's say, fear and greed in the markets. And it worked pretty well. It 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 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 learning about investing. This gave me time to actually learn the skill and talk to people who were experts and professionals and really learn. Then I started writing about investing 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 investing and going on CNBC. And then I built, uh, so I was doing deals also then and making money. And then I built a website that combined my interests in web development with investing. I made like a social, I called it the MySpace of finance because MySpace was big then. And, uh, sold that site and that was like my next big hit, sold that for $10 million. And, um, you know, and then a year later I was broke again. And that's— things like that just kept happening.
