This Is Your Brain on Stock Market (Part 4 of 4)

It was 2:32 p.m. May 6, 2010.

$1 trillion dollars disappeared within minutes.

I couldn’t believe it. I was looking at the market. I was looking at my bank account. I thought I was having a heart attack.

What. The H***. Is Happening?

I called someone and I think I started to cry.

Years later, this moment went down in history as the “Flash Crash of 2010.”

For me it was just a Tuesday.

—

Eight years earlier, I watched the markets blow up firsthand. I behaved irrationally like everyone else. I lost everything.

I knew whenever I lost my appetite that it was probably time to buy. But still… even with that impeccable system, it wasn’t as good as the software and artificial intelligence I wrote to sift through 8,000 stocks to find the best picks of all. When, what price, what stock.

So by the Flash Crash of May 2010, I knew better.

I was bullish on the U.S. markets. I still am. At least until 2020. After that, who knows.

Everyone either laughed at me or hated me. And I was very sensitive. One friend of mine said, “This friend of mine who works at Goldman called me and asked me why I was friends with you.”

I said to him, “Well did you defend me? You’re as bullish as me!”

“Heck no,” he said, “You’re too weird. And plus, I want to date her.”

Sadly, we’re no longer friends.

Business news like CNBC and Fox Business liked to trot me out so they could laugh at me when I said things like, “The Dow is going to 20,000.” (The Dow is 26,970 now.)

Instead of becoming irrational like I used to, I looked at the May 6 Flash Crash for what it was…

If you take a look at a chart from that day, you’ll see a big trench, where the line goes straight down and straight back up again. You can’t see it without going, “What the hell happened here? Did someone make a mistake? Did some computer glitch out?”

Yes. All of that.

A day trader’s algorithm kept plugging in fake orders to drive the market down. Another investment firm accidentally placed a large sell order — a “fat finger” trade. Wall Street traders and algorithms reacted wildly.

From the outside, it was like witnessing a glitch in the fabric of the market. Caused by biases and irrational behavior.

Because once the market started to fall, everyone went into panic mode and started to sell. It was a death spiral.

A few weeks later, when the market was still going wildly up and down (everyone afraid of another flash crash), I wrote down that stocks would soon return to all-time highs. Buy buy buy.

People thought I was nuts. This was when my mom called me and said, “Stop smiling so much on TV.” But I couldn’t help it. I smile when I’m nervous.

This I know: There’s a wide canyon between the rational and the real.

I always need to remind myself of this. I am not smarter than the market. And I am not smarter than the software I use to successfully model the market.

People who bought something as simple as an index fund when I made my call would have tripled their investment by now. They wouldn’t have seen a single day in the negative.

I’m not saying that to brag (because I was scared to death saying it on TV). I want to make a simple point:

• If you can spot a glitch in the market when it’s happening, you can make money hand over fist
• Market glitches are caused by irrational behavior.

THEREFORE:

• Look for patterns of irrational behavior, and you’ll be able to spot glitches right when they’re happening, and make money from them. And look for them on individual stocks, which get the most irrational of all.

Yesterday, I mentioned that the markets are confusing and chaotic right now.

My investments swing up and down for no apparent reason.

I used to wake up at 2 a.m., gnashing my teeth and worrying about that sort of thing. When I wake up at 2 a.m. anxious about money, I always tell myself now: “This is my pattern, so I’m going to make an appointment with myself for 2 p.m. to deal with this issue.” By 2 p.m., I forget what I was worried about.

Now, though, I sit down, I write some software, and I try to figure out what’s going on.

That’s what I began doing late last year. Again.

I began writing some software to see why the market has been so choppy. Swinging up and down for no apparent reason.

I stumbled across something interesting. Some patterns of irrational behavior that worked extremely well, revealing a particular kind of stock market glitch that lasts about 7 days on average.

I have almost 20 years of software and trading experience now looking at these patterns. Looking at the heartbeat of the markets through the eyes of my programming. I love seeing the patterns the software finds.

I loaded up historical stock data and started seeing one week gains of 16.8%… 45.7%… 375.9%… 1,033%.

I thought: “This is my new ATM machine.”

I thought: “This is too good to be true.”

Back in 2003, I used to share the trades my software found with a bunch of my friends.

In April this year, I started doing the same thing with my new software. Sharing trades with a small group of my readers so they could help me beta test it.

I hate being salesy, so I’m not going to list off a bunch of big numbers here. I hate selling. I’m just going to tell you what happened.

Here’s what I will say: The numbers have been big. And they’ve been consistent.

I don’t want to sell my discovery to a hedge fund. I certainly don’t want to write another book about it, like I did with Trade Like a Hedge Fund (those patterns immediately stopped working after I wrote about them).

I want to share the software some other way.

I want to give people the thing that saved my life over and over the last 20 years: trading software that wakes me up and tells me what to do, so I can make the trade and go on with my life, and then get out a few days later.

Today, for the first time, I’m opening it up to regular people. Well, not everybody. Just the readers who have been with me. You.

I put together this presentation so people can learn more about the glitch and patterns I found, and see how they can get access to the trades I’m passing along from my software.

For now, I’m only sending this out to my readers. After Monday, I’m going to open it up to everyone who wants to be a part of it — at least until we hit our hard cap of users. Then… no more.

If you’re the type of person who likes active trading and making money fast…

Or if you’re the type of person who always wanted to take advantage of automated trading software, but you don’t know how to code…

Or if you’re the type of person who wants to turn off the irrational part of your brain, so your investing gives you the freedom to live the life you want…

In other words, if you are like me and want to live a calm life in a sea of volatility.

I know you’re going to love this.

Give it a look and choose for yourself.

EDITOR’S NOTE: Recently, we’ve received a flood of emails from beta testers who made $907, $2,840, even an extraordinary $19,000 from single trades James passed along from his new software. Unfortunately, these gains are only possible if we keep the number of “users” small. That’s why, right now, we can only accept 1,085 new “users” to receive the trade recommendations James passes from his software.

Because he wants to share his new discovery with the world after Monday, we expect to reach this cap quickly. Click here to watch his special presentation before we have to shut it down.

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This is Your Brain on Stock Market (Part 3 of 4)

I hate to think. And I hate emotions.

I used to think I was smart. I’d make a trade and it would immediately go against me and I’d be miserable. I’d sit and look at the screen and feel the blood pumping all through my body.

“Take a break,” another trader told me.

I would go outside. Go to a basketball court looking over the river. I’d shoot baskets. I don’t play basketball at all. I’d go home and my trade would be even more against me.

Those days felt like death. And I’d be afraid of the night. Of waking up at 2 in the morning wondering when I’d go broke.

It wasn’t fun.

I was one of the greedy or fearful traders making a decision on a whim and maybe a memory.

Finally, I realized I needed to take all emotions out of it. That’s when I wrote the software I’ve been telling you about for the past two days.

(Did you read those? You can catch up by reading Part 1 here and Part 2 here.)

My software would take a look at all the patterns in the market and find the ones that were being triggered that day. By “triggered,” I meant they were occurring in the market right then and if I made a trade, it had a 99% chance of success based on prior trades.

Those trades wouldn’t always work.

But they often did. And I’d make a lot of them.

Here’s a trade that worked all the time. It was like an ATM machine. I show this as an example pattern.

Pattern: 

A)   The market was down on the last day of the month

B)   The market was down on the first day of the next month between 9:30 a.m. and 11 a.m.

C) BUY “SPY” from 11 a.m. until the close.

BOOM!

That pattern worked almost 100% of the time.

People and institutions often get money on the first day of the month to invest. If the market looked like an opportunity, they would plow money in.

My software was modeling this.

Another one: I mentioned the bankruptcy play. This one still works:

Pattern:

A)   Company ABC announces bankruptcy. This means they can’t pay their debts. This means their stock should be worth $0.00

B)   ABC has to stop trading while the news disseminates. Usually it closes for an hour and then the stock exchange reopens it.

C)   The second it reopens, BUY “ABC”

D)   Hold for the rest of the day and day after.

This was good for almost 100%-plus gains every time. Enron, Worldcom, General Motors (as mentioned in prior letter), all worked. Enron was about a 300% return in a day. 

WHY?

Didn’t the company just say the stock was worthless?

This is the key:

What is rational and what is real are two totally different things.

When you see the rational and real break apart, it’s like you’re witnessing a glitch in the makeup of the world. Not only in stocks but in every area of life.

Usually it’s not brand new news when a stock declares bankruptcy.

Many people already know about it. They’ve been betting on it. They’ve been selling short ABC in the hopes that it would fall.

Once the shares have fallen and they’ve made a profit, they will buy back the stock in order to get their money back. That’s how “selling short” works.

In other words, once the stock declared bankruptcy, the play was over for many traders. They would buy back the stock, usually millions of shares, propelling the stock upwards. And the stock was already so low (most likely) that all the interested sellers had already sold.

This was another pattern I found with my software.

In 2008 I found more patterns. Everyone was losing money. I was desperate. I needed to make money.

I was getting a divorce.

My software found a new pattern for me.

Pattern:

A)   Canadian stock market goes up for two days in a row

B)   US stock market goes DOWN for two days in a row

C)   SHORT EWC, BUY SPY (i.e. sell Canada, Buy the U.S.).

This was almost always good for 1%. That doesn’t sound like a lot but there are many ways to get that 1% higher, such as using simple options contracts. And if you compound 1% a day, that’s thousands of percent in a year.

I found similar patterns between New Zealand and Canada, Australia and Japan, Australia and the U.S., the U.S. and U.K., and Brazil and Europe.

Once again my patterns saved my life.

I ran into a friend of mine who bets on horses. We swapped techniques. “I do something similar,” he said. “I have data like the horses in the race, the track conditions, the prior races, etc. and then I make the high-probability bets.”

He runs a hedge fund doing this that makes about $30–50 million a year in profit. 

People are always fearful. And people are always greedy. In every area of life. The markets, horses, relationships, elections. 

Often, very often, every day even, they make irrational decisions because of that fear or greed.

It might be on a stock (if Microsoft goes down four days in a row after an earnings report), or it might be on the market (like the patterns above).

Some of the patterns don’t last very long. Days or weeks. But others last for lifetimes. These are the ones I try to focus on.

Because of this strategy of using software and artificial intelligence techniques, I have saved my life, made money, started businesses, for the past 20 years.

And the environment is much more confusing, much more chaotic right now.

And hedge funds managing billions of dollars are forced to find irrational behavior only in super large opportunities so they can put in billions of dollars a day.

The software I write takes advantage of those big funds and the biases they code into their algorithms. They are forced to ignore the smaller, more nimble, more profitable opportunities.

Around 2003 I shared the software with a bunch of friends. Every morning they would look at the patterns in the market and send me what they thought was the best trade.

Then I would do my own testing, and tell them what trade I was doing based on the software.

Now, rather than doing a hedge fund, or day trading for a big firm, I wanted to share the software some other way.

I don’t want to start a hedge fund. That’s ugly work with ugly people.

Trading should free you from the desk, from anxiety, from the stress of watching every tick up or down in the market.

I wanted trading software from the future. I wake up and it tells me what to do. I make the trade and then I can go on with my life.

So I wrote it.

Tomorrow, I’ll show it to you.

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This Is Your Brain on Stock Market (Part 2 of 4)

Our brains are messed up. Daniel Kahneman, the Nobel Prize winning economist, calls the ways we are messed up “cognitive biases.”

Our cognitive biases make us sell stocks whenever everyone else is selling. Cause us to buy stocks when everyone else is buying. This is called “herd behavior.”

Another cognitive bias is called “loss aversion.” We’d rather make a bad decision than lose money. So we sell too quickly.

Cognitive biases almost always force us to make bad decisions. This is why markets and stocks sometimes go up too high. Much higher than they should.

And this is why markets go down much lower than they should.

But this creates MASSIVE opportunity if you have an unfair advantage.

Kahneman says, “It’s impossible to act rationally. It’s impossible to get rid of the cognitive biases.” Impossible!

People are irrational all the time. If Microsoft goes down five days in a row, people sometimes think, “That’s it! Microsoft is dead! Time to sell.” And then it keeps going even lower because of the new crazy selling.

What was the news? Maybe Microsoft missed earnings by a penny. Something trivial. But people go crazy.

I go crazy.

So I did what I always do. I wrote software. I took the emotion out of my trading.

I knew all the cognitive biases. I had studied them. The stock market is like the collective psychology of the entire planet.

If individuals can make irrational decisions because of these biases, then so can the entire market. So can you. So can I.

My software helped me find 100s of patterns where I was able to prove people were acting irrationally.

If you invest in the opposite direction of millions of crazy people, you make a ton of money.

I didn’t know anyone else doing this at the time. There were a few secretive hedge funds doing it. And then I did it.

Some of the patterns I found were unbelievable. I couldn’t believe there were opportunities to make 100%, 200% or even more in a day.

Other patterns were insane. Like if a biotech company has a drug that caused brain cancer… wait two days and then buy.

Other patterns were so consistent I called them “ATM machines.” One time I wrote about one of these ATM machines on a very popular website.

Dan told me, “Why did you do that? It won’t work anymore!”

“C’mon,” I said, “who listens to me?”

The pattern never worked again.

I started day trading more and more money. Top hedge fund managers were even giving me their personal money to trade.

Some days I would trade over $1 BILLION worth of equities. In a DAY.

All because of my software. I took the emotions out of it. I only traded when the software saw a pattern kicking in.

I’d go out to lunch sometimes and come back and see that the software had found a pattern, made the trade, and already exited with a profit.

I had no job. I had two little babies to feed. I had expenses and little money. I had to make 100% per month just to make my expenses.

And I built a business trading for other people. In my first few months doing this I made over 150% for my investors and more and more people invested with me. Almost every day was a profitable day.

Then I built a hedge fund and invested in many traders.

I wrote a book about some of the patterns my software discovered. The Stock Trader’s Almanac named it their “Top Investment Book of 2004.” Barron’s listed it as one of the top 10 investment books of the year.

One of the hedge fund managers who had given me money pulled all his money away from me then. “You can share with some people, but not EVERY person.”

Here’s the thing. Here’s the universal secret about investing:

• People are ALWAYS irrational. Which means there are always patterns in the market that will make a lot of money. Yesterday. Today. Tomorrow. New patterns.
• Having software to find new patterns is an UNFAIR ADVANTAGE.

DO NOT INVEST unless you have an unfair advantage.

In 2008 I found new patterns to invest. Patterns that worked every day. While the world was burning, I was making money. I made money on the day Lehman Brothers went bankrupt.

One time in 2009 I was impressing my then-girlfriend by showing her the gym in my building. I had obviously never been there before.

I lived right across the street from the New York Stock Exchange. I saw traders going in and out of there every day. Always depressed.

At the gym, some guy saw me and got off his treadmill and came up to me.

“I have to shake your hand,” he said. My girlfriend was watching.

“How come?”

“My group saw the bankruptcy pattern you wrote about in your book,” he said. “GM went bankrupt today. We made 100% in a few hours and called it a day. So thank you!”

I had forgotten to play my own strategy!

This strategy saved my life over and over again. The biggest opportunities for 100% returns or more are found by betting against irrational behavior.

The hard part is finding the patterns that consistently show you where investors are behaving badly.

And now it’s even harder! The markets are on an incredible 10-year streak.

I know many hedge fund managers. Many bankers. And many billionaires have come on my podcast and told me their worst fears.

I was talking to the CFO of a major investment bank the other day. I asked him, “What keeps you awake at night?”

He described his nightmare scenario. And yes, it was a nightmare. It would be the most irrational thing that could possibly happen in the stock market.

“I don’t know what can stop it,” he said. “It scares the hell out of me.”

18 years after I first started writing this software, I went back to it. I knew there would be incredible opportunities over this next year because of what he described.

I looked for the new patterns in this crazy environment. Everything seems so peaceful, but everyone is scared.

Everything seems calm, but a volcano can erupt at any moment, maybe causing the most irrational behavior we’ve ever seen.

But that means more money than ever can be made.

I kept looking and looking for more patterns. My rule: I have to have patterns for up markets, sideways markets, down markets, booms and busts.

I did what I do to solve problems. I wrote more software…

And then I found it… A pattern that worked again and again…

One that lasted about 7 days on average. So it would give regular people trading at home a window to invest (and NOT just computer software making a trillion trades per second).

I’ll tell you a little more about it tomorrow…

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This Is Your Brain on Stock Market (Part 1 of 4)

I was scared and I needed to make a lot of money.

This is what happened. It was a beautiful day. No clouds. A deep blue morning. The best day. The stock market looked like it was going to open higher.

I ate breakfast at the Dean & Deluca on the bottom floor of the World Trade Center. My business partner, Dan, and I ate there every morning and then walked a few blocks to my place and would day trade the markets.

He looked up while we were walking back and said, “Is the President coming into town? Is that Air Force Once?”

And then we watched — microsecond by microsecond — as the plane, at 600 miles per hour, went a few hundred feet over our heads and a loud BOOM and everyone ducked because that’s what felt right and the plane went SMACK into the World Trade Center.

Everything went crazy. Ash stained everyone. Blew everywhere.

The black cloud covered my apartment. My 2-year-old daughter was crying and peed on the floor.

Dan was afraid a friend of his was dead and started to cry. My wife was six months pregnant and the radio was telling us asbestos was creeping in through all our windows but it was unsafe to go outside.

I don’t know how much the market went down the week after it opened. It was surgery on my skull.

I was so scared. I was losing everything. My daughter saw me crying. Saw the Red Cross come over to try and calm me down. Saw the police come over and calm me down.

Like many people, I behaved irrationally that week. I was so afraid to go broke, so the market broke me mentally.

The truth is, I didn’t have a clue what I was doing. And at the end of that week I swore I would never trade again.

But I wanted to get rich. And I had an idea.

I loaded in 45 years of stock market data. Every price movement on every stock. 8,000 stocks. Every tick up or down.

I did what I always do when I needed to solve a problem. I had been a software programmer for 15 years. I had built and sold a successful software company.

So I wrote some software…

[Editor’s Note: Stay tuned for tomorrow, when James will tell you more about this software — and what it’s capable of.]

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I’m the Worst Judge of Character

I wanted to raise some money. My neighbor said, “Meet my boss. He runs a hedge fund.”

I met the boss. He gave me the tour of the office. Everyone was buying and selling stocks.

Then we sat in the boss’s glass office. We could see all the employees and they could see us.

He sat down. “So, tell me, James. What can I do for you?”

I was impressed with him. He’d spent 30 years building this great business.

I described my hedge fund. “It’s a strategy you don’t pursue,” I said. “so If you put money with me, it’s diversification for you.”

He said, “Look. You seem great. I’ve enjoyed talking with you and we can use someone like you. You can have a job here anytime you want.”

He said, “But if you take my money, I have no idea where you put it. If you put it somewhere illegal, I could get into trouble. The last thing we need,” he said, and he pointed at himself, “is to see the name Bernard Madoff Securities, LLC on the front page of the Wall Street Journal.”

—

[DON’T EVEN MEET PEOPLE]

14 years later I was thinking of investing in an exciting company. It had several divisions.

One division grew its own marijuana and was profitable. Another division sold marijuana to retail in states where it was legal.

But then I did my research.

I did background checks on everyone involved. They had all been sued several times after prior bankruptcies where it was thought they had embezzled the money.

I called other hedge funds. One friend of mine said, “Stay away from those guys. No good.”

So after doing about 10 hours of work and research and reference checking, etc., I decided this was a DEFINITE NO.

Jeff, my partner on this, said, “Well, it’s a no but they flew into town so let’s meet them. Bring up all these issues and see what they say.”

“Ok,” I said, “but you have to promise me one thing.”

“What?”

“When I leave the meeting with them, I’m going to want to invest. I will bring up all the questions but I am SURE they will have answers for everything.”

I said, “I know they are going to win me over. They will convince me. But look at all you uncovered. You know it’s a no.”

“I can’t help it,” I said, “I know they are going to convince me.”

Face to face, guys like this have zero trouble convincing me.

“Not only will he convince me but I’m going to try and argue you into investing.”

—

We met the CEO and CFO of the company. I asked all my questions. They responded with smart, intelligent answers that explained everything.

Problems with bad distributors in the past. Bad brokers. Bad bankers. Bad partners. The industry wasn’t ready yet. Etc.

I was convinced!

“OK,” I said to Jeff afterwards, “I know I said a definite no before, but they are doing the right things and the potential is huge. And they are probably right about all the prior issues. And I really liked them.”

I said, “Let’s invest.”

—

[OPTIMISM]

I was having breakfast at E.A.T. with a 95-year-old billionaire.

I had cut myself shaving and he held a napkin to my chin while we waited for our food. I was embarrassed.

He said to me, “James, eat blueberries.” The waiter delivered me a stack of pancakes.

He said, “James, I’m working today from 6 a.m. until 10 p.m. Look at my schedule.”

A wrinkled notebook was in his hand. Notes all over it.

He had built up his venture capital business in the recession of the ’70s.

“I made a huge mistake starting then. You know who tried to talk me out of it? Warren Buffett. But I did it anyway. But then four years into it I invested $200,000 in a deal and within 18 months it was worth $60 million.”

“I stayed optimistic,” he said, “Even though everything was going bad all around me. And, you know what, James? Optimism is what helped me survive. Kept me going.”

He was my friend.

He always let me into deals he was investing in. “This one is the future!”

I lost money on every single one of them.

Afterwards, I found out that he had pulled his money out of all of them and never told me. I felt cheated. I never had breakfast with him again.

“Are you kidding?” a friend of mine said to me years later. “He’s been screwing people over for 40 years. You’re the latest in a long line.”

—

Jeff said, “No! You did the work. You did the due diligence. They charmed you. And you TOLD ME this would happen. We have to say no.”

“But,” I said, “this could be huge.”

“So what?” Jeff said. “NO!”

—

[HE HATES ME]

We reached out to the prison where Bernie Madoff is a prisoner.

We asked the warden if Madoff could come on our podcast.

We’d go there or we could do it on the phone.

After a few days we got a message back. No.

“What else is Madoff doing all day?” I asked Steve Cohen, podcast producer extraordinaire.

“He’s making license plates all day and he’s still saying no to us?” I said.

I felt rejected. Bernie Madoff was rejecting me.

Again.

I keep chasing him, hoping for love, and he keeps rejecting me like I’m the class IT guy and he’s the cheerleader.

Bernie just has my number over and over again.

—

[PLEASE LIKE ME]

I like people. And I want then to like me.

One person once pitched me on a time machine business. I believed him.

So many times I’m fooled. So many times people take advantage. You mean, they didn’t like me?

Research shows that 90% of people who are actually bad judges of character think they are great judges of character.

I don’t.

My name is James A. and I am addicted to giving people every benefit of the doubt. I have a very low JQ (“judgement quotient”).

I’ve had my heart and bank broken because of this. Hundreds of times.

—

[THE BILLIONAIRE CLUB]

I no longer have breakfast with that billionaire.

Here’s the thing about that diner:

Every morning would be a bunch of old guys in sweatpants, reading the paper, eating their blueberries or whatever.

All of them were billionaires or close to it. All of them knew each other. It’s like this secret club.

They’d stare at each person walking in. Measuring them with their laser eyes.

Slicing them up. Trusting nobody.

I don’t think I will ever be in that club. I trust everyone.

I eat breakfast by myself mostly.

When I’m by myself, the only one I am judging is me.

I like me. But, based on experience… I’m probably wrong.

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The 10,000-Experiment Rule!

Tracy Morgan stopped by the club.

I said, “Want to go on up?”

He said, “I got nothing. I got nothing… Ahh, whatever. I’ll go up. I’M TRACY MORGAN!”

He went up for 20 minutes just spewing jokes nonstop. Everyone was laughing.

He had this raw energy. He was shouting and laughing. And making faces. It was like there was no filter between his brain and the audience.

“Your parents had sex and your parents had sex and your parents had sex… We’re all here because your dad put his…”

And so on.

Just the way he said it. BOOM!

He said to me afterwards in the bar, “Just say what’s on your mind. You got troubles? Talk about it. That’s what they want to hear.”

Then he started making a lot of jokes about sex. Everyone around him was laughing while he simulated screwing his chair.

—

The only way to get better is to constantly experiment.

Not the 10,000-hour rule. I now think that’s BS.

The 10,000-experiment rule!

I performed immediately after Tracy Morgan came on the stage.

It was scary. The audience was wound up. We just saw Tracy Morgan!

I was scared. “What am I going to do?” I said to someone. There’s never any answer to that but I always ask it.

I took the microphone from Tracy. People started to get quiet.

—

If I had this choice: perform BEFORE or perform AFTER, I would only choose AFTER.

I have to choose AFTER.

Else, I fall into the 10,000-hour trap.

Stay in your comfort zone for 10,000 hours and you might get good.

—

An experiment means: Try something that everyone else is afraid to try. Try to learn what happens on the other side of “You CAN’T/shouldn’t do that!”

Then you are the only person on the other side of Can’t. That is success.

Each experiment let’s you skip part of the 10,000 hours.

I know this because I’ve done it. You can fail on 10,000 experiments but then suddenly you’re Thomas Edison.

That’s why years of invisible work seem like overnight successes.

I used to cry after failing. Sometimes I still do. It’s so painful. I always feel like giving up.

But maybe the one thing I learned is to keep the experiments small.

Tomorrow is always another day. A new experiment.

—

With comedy, I’ve performed right after many great comedians:

Bill Burr, TJ Miller, Judah Friedlander, many, many more. And now Tracy Morgan.

I had to go to the bathroom really badly.

I felt like I was going to shit my pants. I was thinking of making a joke about that but wasn’t sure. What if it was dumb?

I looked it up on Google trends. The phrase “I shit my pants” is popular in Pennsylvania. Why?

And the most commonly searched phrase right after “I shit my pants” is “I hate myself.”

That seems funny but I had no punchline for it. It’s a funny premise. Also, apparently nobody in Oregon shits their pants. I don’t know why.

Why are so many people unhappy?

When you go on stage the lights are bright so it’s hard to see the audience. Which makes it harder to connect with them. You have to look them in the eyes.

That was another hard experiment for me. I don’t like to look at people in the eyes.

—

Here’s an experiment I did the other day:

I took “50 Shades of Grey” and replaced every single word with a synonym .

For instance, “She hurried from her tests” became “Jackie rushed after her exams.”

I used Fiverr to get a cover, uploaded the book to Amazon, and hit “Publish.” It’s a published book now.

More on that experiment later.

—

With standup comedy there are many ways to experiment:

A) Perform after someone really good. The audience starts off not liking you. Win them over.

B) Do the “check spot” — the spot when the checks are being handed out and everyone is talking. You get really good at learning how to dominate a distracted audience.

C) Host. Which means you do six mini-sets. You get really good at reading the energy of a room and bringing it back up.

D) Go up first. Because the crowd is not fully warmed up yet. Children laugh 300 times a day. Adults laugh only five times a day. If they are not warmed up, they still don’t remember how to laugh.

E) Go up last. Because the crowd is tired and drunk.

F) Do 100% crowd work. Because you have to be really sharp and in the moment. “You’re from Buffalo and you install floors?” And then you have to make a joke out of that. 100 times in a row.

G) Do 20% new material every set. Most comedians never do new material and do the same jokes for years.

H) Act out the joke. Voices are funny.

I) Make jokes that will make them hate you. Practice dealing with either silence or hecklers. Silence is the cruel beast of standup comedy.

J) Tell a true five-minute story about your life. Because it forces you to find, in real time, the funny in your story.

This is proof that DOING is better than THINKING. You can only work out those jokes with 100 strange eyes staring at you and doubting you.

And other ways. I don’t know. I am the student. I am just doing experiments.

Each experiment changes me. I get home and write down what I learned.

I skip more hours.

I did standup comedy on a subway car once. That was a hard experiment.

But it forced me to get quickly to the punchline. No extra words.

And it forced me to deal with 20 strangers hating me.

—

Tracy Morgan was simulating having sex with his chair later in the bar. He pointed to my wife. “She gets it!”

After Tracy Morgan was onstage, people lost their minds. It was Tracy Morgan.

Then this weird looking guy comes up on stage. Crazy hair. Glasses. Sweating.

Tracy shakes his hand and walks down the steps. The crowd is cheering. Not for the new guy. For Tracy. They’re already missing him!

The weird looking guy, 10 months older than Tracey Morgan but a beginner still after four years, blinks into the bright lights.

The people stop cheering for Tracy and begin staring at the guy on the stage.

I look at them and have only one thought.

One day I hope my kids love me.

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Greenland: Let’s Buy It and Save the World

Let’s buy Greenland before any other country does.

Rare earths, uranium, oil, the environment, natural beauty.

Don’t let any one country get the most valuable piece of land in the world. Let’s buy it for ourselves.

The full list of reasons for why and how to buy Greenland are listed in the GoFundMe link. (Make sure to click “Read more.”)

But here’s a brief FAQ on the fundraiser itself:

+++++++++++++

FAQ:

1) WHY $100 MILLION?

Denmark pays $700 million a year to subsidize Greenland. Denmark’s national debt is $120 billion.

If we pay Denmark $21 billion, that’s 30x what they use to subsidize Greenland. Plus it’s about 1/6 of their national debt. Between the savings and assuming Denmark’s interest payments are about 5%, this will be 12 years of no debt payments and no subsidy payments.

$100 million is a fraction of what we need but enough to engage other banks and funds to raise the money sufficient to buy the country at a price Denmark will not be able to refuse.

2) WHAT IF WE RAISE THE MONEY BUT ARE STILL NOT ABLE TO BUY GREENLAND?

I will return all of the money OR donate all of the money to environmental research and the beautification of Greenland. I also could use the money for competitive bidding to make sure Greenland’s most useful mines are not controlled by any one country.

3) WILL I HAVE A SAY IN HOW GREENLAND IS RUN? 

Yes, every citizen (pledge over $1) will have a vote. But I will also give the Inuit five votes each. There are 57,000 Inuit on Greenland.

4) IS THIS JUST A JOKE? 

No!

Greenland is the most un-watched and yet perhaps most important country on the planet right now.

Between the rare earth minerals, the uranium, oil, the battle between Trump and China, and the environmental concerns, Greenland is the final frontier in our battle to keep pushing humanity forward.

RISKS: 

Once the $100 million is raised, it will be a first step towards raising further money. I will not benefit AT ALL from raising this money, but will use it as a foothold to get other funds raised to complete the job. If I still can’t succeed in buying Greenland, money will all be returned.

All money will be refunded if $100 million is not reached.

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Why Valedictorians Often Don’t Succeed

It’s Altucher’s Book Club time!

This week, we recommend two books: “F*ck Whales” by Maddox and “Barking Up the Wrong Tree” by Eric Barker.

I discuss both books in the video below.

It also features one friendly guest appearance and my favorite game!

In the video, you’ll find out why it’s stupid to follow your dreams and why valedictorians often don’t succeed. Click below.

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I’m Easily Manipulated — Are You?

“I won’t love you unless…”

“I won’t give you that promotion unless…”

The manipulator is never the stranger down the street.

It’s your friend, your boss, your romantic partner, your employee, your customer.

“I can’t believe you won’t do this one thing for me…”

—

I have these holes and it’s hard for me to fill them:

• The “disease to please”
• Addiction to earning the approval of others
• A fear of expressing anger, frustration or disapproval
• Lack of assertiveness and ability to say no.

I even wrote a book, “The Power of No.” It was a WSJ bestseller just in case you missed it.

But I wrote it because I needed to learn how to say no.

You don’t buy a book about dating from Brad Pitt.

You buy it from someone like me. Someone who was in pain and had to learn.

—

Manipulation is when the other person will do anything, at any cost, to get you to do what they want.

They will guilt trip, they will lie, they will yell, they will evade.

They will be a victim. They will shame.

No successful person ever said in a TED talk, “Playing the victim is a great strategy for success. I rode victimhood all the way to the top!”

The manipulator will not be successful. But I am still easily manipulated.

You can’t ask “why?” They won’t answer.

I have never once gotten an honest answer to “why?”

—

“Well, what do YOU want?” a therapist once asked me when I was under the spell.

“I don’t know.”

Wanting something? That was a distant memory.

I had to get the tools. I had to understand them. I had to think about why I am so easily manipulated. So afraid to lose love.

So little regard for myself.

So I bought a book about manipulation…

Anyway, that’s the intro to this week’s Altucher’s Book Club. Click below to watch:

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