Episode of My First Million with Sam Parr and Shaan Puri.
Transcript
Note: This transcript was auto-generated from YouTube captions. It may contain errors and lacks speaker identification. A full Gemini audio transcript will replace this.
Kind: captions Language: en 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 are you making money and how are you taking it to zero were you just making wild bets or Wow yeah yeah but where you’re like hit 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 the first one again I was working at HBO and I made their website and at 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 and his world have an American Express would call Arthur Anderson which was their accounting firm and you know Arthur Andersen famously went out of business in a scandal six years later but American Express called him Arthur Andersen said can you make us a website Arthur Anderson said sure well they’re gonna charge you millions of dollars Arthur Andersen would then call another software consulting company and they would say yeah will charge you a million dollars the software company would call me because nobody knew how to make a website in 1994-1995 so I would say sure I’ll do it and then suddenly they pay me and my brother-in-law $250,000 to make American Express calm so that was one of our first websites and I were 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 we did the movies for the matrix and many other movies but anyway that was and were these built up sites 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 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 yeah you know some Mac I forget the company macro something and they were there are very heavy designs not that usable and but yeah I mean they were okay there they were admired back then so the website for the matrix was a great website which you know on archive.org you could find or HBO’s web site was a great website but it wasn’t as functional as all websites are now wasn’t very easy to navigate and you walk away with at the end of that about 15 million and then oh [ ] yeah so cash not not like so a lot of people then you know when 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 I liked the peak in 1999 I cashed out and I had the cash in my checking account like I didn’t even what do you mean cash out were you getting like stock in these company yeah so so no I sold the company to a company that was rolling up 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 three to forty eight and I cashed out with literally at the peak with about a little over 15 million almost 16 million cash and 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 that was going away I was smart I sold the business I cashed out as fast as I could and then I became everybody you suddenly when you when you make money at one thing suddenly you think you’re a genius and 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 this internet stuff you’re 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 I poured all this cash back into uh internet investments after I 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 I was gambling every single day like I was playing poker for 365 straight days I played poker at least eight to ten hours a day I was really ask you if you’re a degenerate gambler because you kind of have that I mean you sound like that before you told me you’re 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 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 like in you know right at the end of 1999 I started a venture capital firm and I just started investing money and which was your firm all your money so your firm no no we raised we raised two hundred million dollars like we [ ] that was the other thing too I didn’t have any experience doing any of this stuff I didn’t know anything um I’m trying to remember all investors uh see s first Boston Deutsche Bank like all these major banks gave us money and then another company invest Corp which is a major private equity firm gave us a hundred 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 hello zero from 15 is zero how long was that I was losing about a million dollars 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 that 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 cuz 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 a little building called the World Trade Center and we were getting an offer on September 11 and of course many worse things happened that day than me not getting an offer for my house but 9/11 happened and we couldn’t sell then because we were part of the crime scene and you know just I went totally were you only broke were you home 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 be it all so many worse things happen to people too many more people than me that day obviously but my business partner and I were there was a Dean & Deluca and 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 it’s the president coming into town today cuz this I look up and there’s this plane 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 and everybody on the street instinctively ducked and and your brain does weird things so my I started thinking to myself like my business partners name’s Dan he said 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 like my brain was telling me this even though it was a quarter to 9:00 a.m. and you know how do you remote control us of whatever 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 firemen suits at us and say get this on we’re gonna 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 and they’re like no no only firemen and that fire station it was the Duane Street fire station a hundred percent of those people died who went to the World Trade Center that morning and and then from you know there’s 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 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 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 two and looked for patterns you know when would I would have my software fine statistically significant patterns where trades were good so I would try to model 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 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 and talk to people who were experts and professionals and and really learned 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 so I was doing deals also then and making money and then I built a website that combined my interest in web development with investing me like a social I called it the myspace of Finance cuz myspace was big then and I sold that site and that was like my next big hit sold that for ten million and you know and then a year later I was broke again and that’s things like that just kept happening [Music]