Live As You Choose and Think Independently

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Posted by The Savvy Retiree on February 5, 2017 in Uncategorised

James Altucher writing on free thinking

The other day I threw out my college diploma that was in storage.

I threw out everything I had in storage. The last objects left in my life.

A friend asked me, “You worked hard for that diploma. Are you sure you want to throw it out?”

Yes. I’ve worked harder for other things since then. I don’t keep all of these things around either. They are gone.

Society tells us a diploma is a special life achievement. It isn’t. It’s yesterday. I don’t hold onto all the things society tells me to hold onto.

Back in 1998, a broker called me and suggested I buy a stock. I remember it. Intel. INTC. I had all my money in an account with him. I said, “ok.”

A few minutes later he called me back and said, “Sell it.” I said “ok.”

I made $1,000.

I couldn’t believe it! I made $1,000 in what seemed like less than a minute. It felt like I had made it before I even had it. It was like a magic spell was cast on me.

Before this, I knew nothing about stocks. I had a web design company that employed mostly painters and artists and graphic designers.

Before that I worked at HBO where I interviewed prostitutes and before that I was a computer programmer.

I started buying and selling stocks. Every day. Morning, day, and night. I still knew nothing. The only thing I thought I knew was: I am a genius and nobody will stop me.

Positive thinking is a very dangerous drug.

And then when internet stocks started to collapse, I doubled down and then tripled down. I kept buying more and more stocks. I mortgaged my apartment. I borrowed.

I lost everything.

So I decided to learn. Here’s what I did, step by step.

I read about 200 to 300 books on stocks. I read books written in the 1700s, 1800s, 1900s, and 2000s about stocks and investors that I admired.

Did reading give me all the knowledge I needed?

No, maybe 5%. But you can’t start the car without turning on the ignition. Reading 200+ books was the ignition. Then I had to drive.

I still read several books a month on finance, investing, and the history of industries.

I have a Kindle app on my iPad mini and read all of my books there. I understand real books are beautiful. So I go to bookstores for hours and read them. But I won’t own them because they won’t fit in my one bag.

I wrote software. I got a billion pieces of data about the markets. I bought CDs of data. Every second of trading since 1945 on every stock.

I wrote maybe a million lines of software over a five-year period. I fed in all the data. The software I wrote helped me find patterns. I’d study all sorts of patterns.

There were some trades that were literally like ATM machines at the time.

If a stock declared bankruptcy, it was halted. It would announce the news that is was bankrupt and was worth $0. Then it would re-open. Against all logic, BUY it the second it opens. Sell it within a few minutes to 24 hours later. Great examples were Enron and Worldcom.

Many years later, in 2009, I was in a gym and a guy came up to me and shook my hand. I said, “Do I know you?”

And he said, “You don’t but I wanted to thank you. GM just declared bankruptcy and I did your bankruptcy trade and almost doubled my money within minutes. So thanks!”

Anyway, there were 100+ patterns like this with new ones I was finding every day.

I never read random articles on the internet unless they are by people I know. Mostly I read books I love.

A friend asked me, when he heard all of this, “But aren’t you afraid you’re going to miss some information?”

I asked him, “What information?”

99% of information we read, we forget anyway. The best way to remember is to “DO.”

I started day trading my software in 2001. We were in a recession…9/11 happened…Enron and Worldcom went bankrupt, and I was buying stocks every day based on my software.

I was profitable almost every day.

Eventually people gave me money to trade. I was day trading up to $60 million or more every day in the markets.

I don’t think I had a down month, although my expenses at the time were enormous.

Experiences happen when you disconnect.

And, these days, I choose experiences over goods or information.

Did I check the box on physical health, emotional health, creativity, and compassion today?

I don’t like to eat more than I need.

I don’t like to have experiences that are unhealthy.

For me, experiences are always more important than material goods. A story is more important than a gift.

A material good might not fit in my bag. But a joyful experience is lighter than an atom.

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