My Life as A Loser Author

By James Altucher

I had two kids, a house that I couldn’t sell (it was right next to “Ground Zero” in NYC), I was almost broke, and my monthly burn was $40,000 a month. Maybe more. I lost track. I was going to go broke and then probably kill myself. I wouldn’t be able to afford diapers and food for my 2 month old baby. Two years earlier, to the day, I looked at my bank statement and I had about $15,000,000 in there. Now, late 2001, almost nothing.

I wrote some software to trade with what little money I had left.

For 12 months in a row, with the market going straight down (Enron imploding, Worldcom imploding, Tyco imploding, etc) I used signals generated by the software I had written in late 2001 to buy stocks (I only bought, never shorted) and I made my monthly nut. On days when I lost money I would cry. I saw my bank account going to zero. I had a life insurance policy so I figured I could kill myself in the worst case and my family would be able to live on the four million that would result. I tried to figure out ways I could kill myself where nobody would know it was a suicide. But I didn’t want it to come to that.

But I was good, or lucky, or my software was good, or God was watching out for me, or I was extremely lucky, or some combination of the above, For 12 months I eeked out my $40,000 a month from trading and then was able to sell my over-indulgent loft, become a living exile for a few years and work on a recovery. I started trading successfully for hedge funds, I built a fund of hedge funds, I started and sold stockpickr.com to thestreet.com, I did some angel investing.

So I wrote a book. In mid-2004 it came out. I was trading my software for about five different hedge funds or individuals (for example Victor Niederhoffer) at that time. “Trade Like a Hedge Fund” was the book. Pamela van Giessen from Wiley, who had published Victor Niederhoffer’s book, was the editor. She had really encouraged me. I wanted to write about things that people should avoid in the market. She said no, people want positive stuff. She said, specifically, call it “Trade Like a Hedge Fund” and write about all your techniques that work. So I did.

She gave me an advance. $5000. When the book came out, Niederhoffer hated it. I was up over 100% for him in the prior year He thought I was giving away all his techniques even though he only traded futures and all my signals in the book were for stocks and were signals I had been trading long before I met him. He wrote me an email, “you are a total laughing stock.” I felt horrible because I looked up to him so much. He trashed me and the book on his email list. People who had been my friends stopped talking to me on blind faith.

Read the rest here.