FULL TRANSCRIPT

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Slava Rubin (00:00)

In this episode of Smart Humans, we talk with James Altucher, the entrepreneur, investor, podcaster, and author. We talk to him about so many topics from the economy to crypto to investing. How do you make $15 million for selling a company and then lose it all? Write a book about it and then make a lot more money. We talk about crypto like Ethereum, is it headed? Bitcoin, where is it headed? And his favorite new one, TAO where is that headed as well?

where the economy is headed, and of course there's the picks for three years out.

Slava Rubin (00:58)

Hello and welcome to the latest episode of Smart Humans. I am super excited for today's guest. He has many talents, James Altucher. Welcome.

James Altucher (01:07)

Thanks for having me on the show. a pleasure to be here.

Slava Rubin (01:11)

Absolutely, so in trying to figure out what would be the one title to give you, that was pretty difficult because you have so many talents, whether James, the author, the podcaster, the entrepreneur, the investor. So we're gonna cover all of these things, so thank you for being here.

James Altucher (01:26)

Yeah, thank you. yeah, it's always hard when people say, what's your, what's your bio? You know, I just, I've always, I've always done whatever has interested me. And so that means I've switched careers quite a few times and for better or for worse. think if I had stayed in one career, maybe the whole time, maybe things would be different, but I don't know. It's also been great diversifying.

the things I've learned and then the careers I've built up and sometimes they intersect, which is very powerful.

Slava Rubin (01:57)

Perfect segue, which is this is a show focused on alternative investments, but we really like to get to know the people first, how they think about investing and their own net worth. Go back as far as you'd like, whether it's birth, grade school, high school, early jobs, wherever you wanna go, tell us how you became you and how you got into the world of alternative investments. Go back as far as you'd like.

James Altucher (02:18)

Yeah, so I was, I studied computer science. loved computer science. went undergrad and grad school computer science. And, but then I fell out of love with, I was neck deep into technology, computers, AI in particular. This is in the eighties going into the nineties. So I'm a bit older and I then,

lost interest completely. And I wanted to write the great American novel like many young people do. And wrote a bunch of novels that were really horrible and had no money. So finally, I needed to get a job as a programmer somewhere, moved to New York City, got a job working for HBO. And one thing I knew how to do, which at the time in the mid 90s, nobody else knew how to do was I knew how to make a website. So there was maybe 10 people in New York City.

who knew how to make a website. And I'm not even exaggerating how few people knew how to make one. There were very few people at that time, like 1994, 1995, who knew how to make a website. And so at one point, HBO needed a website, so I built theirs. And at another point, American Express didn't have a website. They needed a website. And they asked Arthur Anderson, their accounting firm, Arthur Anderson said, sure, we could do it, but they didn't know how to do it. So they asked,

some consulting firm didn't know how to do it. They asked them CD-ROM company, which some people might know what a CD-ROM is. They didn't know how to do it. And eventually they asked me and I said, sure. I know how to do it. So I'm sure Arthur Anderson got tens of millions of dollars to do the website, but I got some money, $200,000 to do this website. I my salary at HBO was 40,000 a year. And suddenly my, you know, my brother-in-law and I, he was a designer and I was a software guy.

Slava Rubin (03:48)

Ha ha.

James Altucher (04:09)

We made this website, the entire American express.com by ourselves. And, uh, and that was like 94 and 95. So, and I had never, I was totally dead broke. Like I had never seen money like this in my life, but I didn't want to leave HBO. was too scared. Like, Oh, this is not yet. Who knows if this internet thing's gonna, I was excited about the internet, but it was surprising to me and all these companies.

Slava Rubin (04:15)

What year is that? Is that 94 or 95?

Amazing.

James Altucher (04:39)

You know, needed websites. So, but eventually we realized, this is here to stay and every company on the planet is going to make a website and we could, we know how to make websites and we could do them really fast. So I started a company on the side and while I was still a junior programmer analyst at HBO, that was my title at HBO, but I started a company called Reset and we made websites for all the record labels in town.

like Loud Records, Bad Boy Records, Interscope Records. We made for all the movie studios, Warner Brothers, New Line Cinema, Miramax. I noticed in that, I just named the companies of several people who are now considered criminals, but hey, that's decades ago. then when I sold the company, and when I sold the company, I thought I was a genius. I sold this company for 15 million. I was broke when I started it. And...

I figured, okay, since I'm such a genius, I'll invest it. And what a bad decision that was because I didn't know anything about investing. there's three scopes.

Slava Rubin (05:36)

You invested

in the public markets, private markets or?

James Altucher (05:39)

Public markets. Like stock markets. Cause everything was booming. It was the internet in the nineties. And you know, there's three skills to money. There's making it, keeping it, growing it. And I knew how to make it, but I was very poor at keeping it. And so I went from literally 15 million cash in the bank to losing all of it. And it was not like I spent it. I was losing it on really bad investing decisions. And

Slava Rubin (06:05)

meaning like pets.com

and things like that or.

James Altucher (06:08)

Kind of, yeah. I mean, I didn't specifically do that one, but let's say things like that. And then I didn't really understand, it's not just about picking stocks. It's about managing risk. It's about appropriate due diligence and diversifying. It's about money management. So I didn't have any, there's a lot of skills to making money and there's a lot of skills to investing. And I probably didn't have any of them except optimism. You do need to be optimistic.

to be a good investor, but I had too much optimism probably. And I just didn't understand anything about how the mechanics of investing worked. So I remember one time, I mean, I was going broke. I mean, I had all this money and I thought I had won the lottery. Like when is the internet gonna come around again? Like a new internet. And then I remember looking at my bank account once at an ATM machine and I had $143 left.

in my account, the same account that one at one point had 15 million in it. And I had no money left and I was going to lose my house. I had two little babies I needed to feed. My parents didn't want to lend me I wanted to borrow $1,000 once. This is after having 15 million and helping them buy a house. I asked my parents for a loan of $1,000 for just a weekend. They didn't want to give it to me. They thought this would be a good lesson for me. Perhaps it was. And I was scared.

and depressed and broke and I was ashamed. was ashamed to even tell anyone what was happening to me and

You know, so I had to kind of remake myself, not only as an entrepreneur or someone who knows how to make money, but I had to figure out like how to get out of this depression. I was just unbelievably sad that I thought I had won the lottery and then lost all the money. And, you know, it took a long time, like several years, but bit by bit, I did this practice, which like I still do to this day, 10 ideas a day.

which is I take a waiter's pad, I would go to a local cafe and I would start off the day by writing down 10 ideas, probably 10 bad ideas. But the important concept here is to, we all have this idea muscle and like any muscle, it atrophies very quickly. Like if you don't walk for two weeks, you'll need physical therapy when you first get up to walk again. Like let's say you're in a hospital bed for two weeks, you'll need physical therapy to walk. That's how fast muscles atrophy.

And I feel most people have creativity muscles or idea muscles that have atrophied. So that's what had happened to me. You know, I was so obsessed with money and losing the money and I was so scared that I had stopped being creative. So I had to re-exercise my idea muscle and I would write 10 ideas every single day. And again, almost all of them were bad ideas. But then bit by bit, I noticed I was starting to get excited again for the first time in years.

And I was starting to have ideas for other people and I would share the ideas with other people. And that, that built me back up is that got me excited. That got me creative again. I started reading more. started reaching out to people and like, here's 10 ideas for you. You don't have to respond to me. And I would do that all the time. And to this day, I still write down these 10 ideas a day. And several years later, I started my second company and sold that.

made a lot of money. And then I went broke again. Like I said, that was called StockPickr and it was like a social media site for investors. And I sold it to the street.com, which was a public company at that time. It was run by Jim Kramer. And, and then a few years after that, I went broke again for pretty much the same reasons, but this time, you know, I knew a little bit more what to do. I still got depressed and everything, but I really focused on.

Slava Rubin (09:31)

What was that company?

Got it.

James Altucher (09:56)

creating these ideas and reaching out to people. And I was better at this point at investing. Like I wrote, I started writing software to improve my investing because I studied computers and I had studied AI. So I wrote basically programs to take myself out of the emotions of investing. And I built up a hedge fund, a fund of hedge funds. And so I was a professional investor based on this software I was writing.

And then bit by bit I did learn while I was spending all my time, I was obsessed with investing. So I did learn after many, many years of hard work, I learned how to be an investor. think, you you can't ever be too confident in your investing skills because you know, men make plans and God laughs. So, and then, you know, over time I'd started more companies. I invested in some private companies that did very well. And that became my thing, investing in private companies. was, I was

you know, pretty good at that. And then I started.

Slava Rubin (10:53)

What year

do you think you started doing that?

James Altucher (10:56)

I started doing it in 2007 and it started paying off around 2012. And there was a company I invested in called Buddy Media, which was like kind of, kind of like what I did for websites. Buddy Media was doing, yeah, yeah, Michael Lazerow So, so Buddy Media was like, like the picks and shovels of Facebook, Facebook marketing, just like I was the picks and shovels for the internet, like corporations needed a website. So I didn't.

Slava Rubin (11:11)

Michael Lazerow,

James Altucher (11:24)

build a big fancy search engine, I was actually making profits. I didn't even understand business that sometimes you want to make a product instead of profits. But, but he mean, he was kind of like what I did for the web, Michael Lazerow was doing for Facebook, but then he productized his offering and it became a very successful company and sold for like 700 million to Facebook. And I was a seed investor of that. And, you know, and then I started getting into

Slava Rubin (11:48)

Amazing.

James Altucher (11:52)

crypto and other kinds of investments. then I've been a writer. I've written many books. My bestselling book is probably Choose Yourself, which kind of described going broke and how I got out of it and what my philosophy of life was. then in 2015, I started a research service about stocks and cryptos and entrepreneurship and built that up.

sold it, but I'm still involved in it. I'm still the face of it. And I still do most of the writing or a lot of the writing for it. So, so yeah, and that's, that's where I'm at now. I mean, there's a lot I I'm kind of skipping around. There's a lot more to the story. I owned a comedy club for a while. I was a standup comedian for a while. I've done all sorts of things, but we can focus on investing rather than standup comedy, unless you want to talk about standup comedy, in which case I could talk about that. ⁓

Slava Rubin (12:42)

I love

it, I love it. It seems like you have such a diverse background across so many different investment types or generation, decades and asset classes. Let's get your point of view as to how you like to invest your money considering you've had your ups and downs. So let's go asset class by asset class. what do you think of pre-IPO venture? As a matter of fact, sorry, sorry, Let me pause there. Of your net worth, typically people are doing 60-40, 60 %...

James Altucher (13:02)

Excuse me.

Yeah.

Slava Rubin (13:09)

public equities, 40 % bonds, 0 % into private investments. If it was those three buckets, 60-40-0, I imagine you're not 60-40-0. What's your net worth allocations across those three buckets?

James Altucher (13:22)

Normally, I would say it's 99 % private, private venture and 1 % cash or actually maybe more like 20 % cash, 80 % private venture. But more recently, it's been, well, this is actually sort of private venture, but in public equities. So, very recently, I've been involved in kind of this,

Slava Rubin (13:26)

Nice.

James Altucher (13:46)

phenomenon that's happening lately, which is the merger of the crypto and equity markets. They're really two different industries. They're not really that connected. It's like people who invest in crypto aren't really similar to people who invest in stocks. But what's been happening lately, and I'm sure you've noticed this and your listeners have noticed this, is that every day there's a new announcement. XYZ company was a $3 million market cap, micro cap toy company.

and suddenly they raise $200 million and buy Solana crypto with it and they become like a crypto equity company. So this has been happening because the laws and restrictions on what is a security have changed since there's been a new SEC commissioner and this phenomenon is happening. So because I'm sort of kind of an expert in the equity markets and the crypto markets, I'm a logical person to start.

putting these deals together and taking a stake. And I've done that with one or two companies. One in particular has been doing very well. So the symbol is TAOX T-A-O-X. And TAO is a of a, it's a crypto token. It's a phenomenal token actually. I recommended it to my subscribers back in 2023.

Slava Rubin (14:46)

Which one is that?

James Altucher (15:00)

And it's an AI, it helps incentivize people to create AI companies. And so it's really in a fast growing industry inside another fast growing industry, which is the crypto space, but there was no, it's hard to invest in. And so the need for a company that's a stock that's easily to put in your ⁓ 401k. Now, if you could buy this stock, TAOX is what we changed the ticker, T-A-O-X, the crypto tokens, TAO, T-A-O.

And you know, now with the stock, you could put it in your 401k. could, you could, there's other benefits of being a stock that, that owning the pure crypto doesn't have. And so that's, I've put that deal together and that's been doing well. And there's other deals I put together as well, but they're not yet announced.

Slava Rubin (15:42)

So.

So should I assume that you have no bonds?

James Altucher (15:48)

Yeah, I don't have bonds. don't like bonds. Because look, here's the thing with bonds is that you're lending money for people to, they're only going to pay you back if they make more than the money you lend them. And if they make more than the money you lend them, then they're a successful company. So I'd rather invest in the company than the loan that makes a successful company.

Slava Rubin (15:50)

Yeah.

Right, and then how about other yield oriented things like private credit or real estate?

James Altucher (16:14)

No, I don't like, mean, look, real estate as an investment category is interesting. It's never been my cup of tea. And yeah, private credit, look, sometimes there's an intersection between debt and equity. So for instance, convertible debt, can invest in a company. What happens is I don't like necessarily purely picking stocks, although I do it and I've done it and I've done it well. But I do like finding

opportunities where I could directly put money into a stock and sometimes that's structured like debt that can convert into equity. So you get an interest payment on it and then when you decide to convert into equity, you convert into equity. so there's, I, when I do private deals, I often structure it like convertible debt.

Slava Rubin (16:57)

And then the pre-IPO investments, you love that. That's your sweet spot, right? Before they're public, you like to get into the private companies.

James Altucher (17:04)

Yeah, so that's typically been, you know, like a buddy media type of company, but I've been invested in a lot of a lot of private company, I'm still invested in a lot of private companies.

Slava Rubin (17:12)

Awesome. And then how about ⁓ crypto? What percentage of your net worth would you say is in crypto?

James Altucher (17:20)

Maybe like, again, because let's say counting these equity plays, maybe like 10 to 20%.

Slava Rubin (17:27)

Got it, and then how about...

James Altucher (17:27)

I like

crypto quite a bit. I would be more into crypto, but private, it's not like I can easily convert private net worth into crypto. So with a lot of cash, I'll keep it in something like crypto.

Slava Rubin (17:39)

How about art or collectibles?

James Altucher (17:41)

Zero.

You know why? Because all investing is about storytelling. And so even a stock like why is Tesla worth, I don't know, let's hypothetically say 300 times earnings, but McDonald's is worth 10 times earnings. They might even have the same rates of growth on some years. I mean, I'm making an exaggeration here. It's probably not true. But it's we were told, and Tesla is a bad example, but we're told tech companies are exciting companies. Intel is exciting. And McDonald's is boring.

But, you know, with storytelling, find the storytelling to be more invisible with collectibles and things like that. There's no real intrinsic value. People say that about crypto, but they're wrong about crypto.

Slava Rubin (18:24)

You wanna double down on that? Why is that?

James Altucher (18:27)

Well, there is intrinsic value in crypto. So for instance, let's just take Bitcoin and without having to explain Bitcoin at all, I'm not gonna explain anything about it, but I can tell you that there was probably a million man hours of code put into the initial release of Bitcoin. anything that has a million man hours of code put into it probably has some value. Then right now, I think it takes something like

500 gigawatts or no, 100 gigawatts a year or more to provide the energy to keep the Bitcoin network secure and people could be confident that their transactions are going through and so on. That's a lot of electricity. mean, I think all the US is 500 gigawatts a year. So there's a lot of people doing a lot of work to maintain something that they feel has value.

And whether it's storytelling, so all these people maybe are just telling themselves a story, or maybe there is real value in use. Again, I haven't described Bitcoin at all, just the amount of work that is being put into it on a daily basis. And the amount of, you know, there's $10 billion worth of incentives per year that Bitcoin issues to people who keep the electricity going on Bitcoin, you know, validation. This is, there's a lot of value in just that. That itself is very expensive.

Slava Rubin (19:48)

So just while we're at it, at the moment is around 120,000. Where do you think it's headed in the years to come?

James Altucher (20:00)

So, and I'm gonna say this being not the biggest supporter of Bitcoin. There's other tokens I like better, but I think Bitcoin has a reasonable chance to hit 250, you know, this year or next, and you know, a million by the end of 2027.

Slava Rubin (20:17)

Whoa.

James Altucher (20:18)

And then I think it's going to go much higher from there. Because here's the thing. Right now, what are we seeing right now? We're seeing two things. One is the same thing that has always played out for Bitcoin, which is that there's a fixed supply of coins. know, there's only 20, a supply of 21 million coins in the history of Bitcoin by I think the year 2140, the final Bitcoin will be issued. And there is rising demand. So Ecuador, all transactions are in Bitcoin.

The US is going to put Bitcoin in strategic reserves. Other countries are going to put Bitcoin in strategic reserves. And I just mentioned how these companies are, I I've seen at least two or three deals in the past couple of weeks that are about $5 billion or $6 billion worth of deals for companies just to buy Bitcoin and more are coming. There's 8,000 public companies. And for whatever reason, you know, hundreds of them are doing, are raising money to buy crypto, in particular Bitcoin and Ethereum.

Slava Rubin (21:18)

If you're so bullish on Bitcoin, which is totally fair, but you say it's not your most bullish token, what are some of the two other tokens that you're more bullish on and why?

James Altucher (21:18)

So this is a big trend.

Yeah, great question. And I am very bullish on Bitcoin. But I would say, I would say this coin TAO, which is TAO is very interesting to really explain it almost deserves like three podcasts. Here's the problem with crypto in general before I talk about TAO. Crypto is, I will admit, hard to explain. Even Bitcoin. ⁓ it's a digital, is it a digital currency? Is it digital gold? Is it a store of value?

Slava Rubin (21:48)

It's got a narrative problem.

James Altucher (21:54)

What's a blockchain? What's a wallet? What's a smart con? Like it's just hard. and TAO is like that. All of the, all the cryptos are like that, but TAO is also like that. But TAO is structured almost exactly like Bitcoin. There's 21 million tokens in a lifetime supply and there's incentives paid out every year to every day to miners. And so when someone is a quote unquote miner on TAO, what they're doing is what they are incentivized to do by, and they get rewarded TAO tokens for this.

What they're incentivized to do is to create useful AI models or hardware or other software that AI developers or consumers can use. you know, so they're either programming their own AI models or they're hosting an open source AI model, or they're providing extra compute cycles on an Nvidia GPU. All of these things are kind of added to the TAO network in exchange for rewards. And then

consumers or developers then use these models. And the more something is used, then the more rewards those miners get. So the TAO token is basically to, it's almost like the TAO token is to AI what Bitcoin is to currency. Like TAO is a decentralized AI, it's fueling all of AI. And so I think it has a lot of growth in front of it. So it's about 430 right now, 440, and I think it's

easily going to 5 to 10,000 within the next couple of years.

Slava Rubin (23:24)

Amazing. So what would be another one that you love?

James Altucher (23:27)

Well, so this is really interesting. We all saw a few weeks ago, Circle, a company called Circle went public. And I don't know if you remember, but Circle originally was going to go public at $25, went public at 31. It went to 250 within a few days. I think, I don't even know where it is now. Maybe it's like 150, 180. Last time I looked a couple of days ago was 180. So it's up huge. And what Circle is, is it's a company that makes a crypto stablecoin.

And a stable coin is just a dollar. It's always valued at a dollar. But the stable coin industry is the oldest and biggest use case of crypto. So the funny thing is Bitcoin was meant to be this currency that's not the dollar. a crypto dollar is the biggest use case in the crypto industry right now. It's a 200 billion dollar industry. Tether, the first stable coin company, started in 2014 and now has 120 billion dollars worth of stable coins issued.

And there was $27.3 trillion worth of stable coin transactions last year, more than Visa and more transactions or more dollars worth and Visa and MasterCard combined. Cause people use it for international payments and people use it as in their own countries as a hedge on the dollar on their own currencies. So, so I like, I'm always a picks and shovels guy. So in the nineties, you know, I made websites in the OOs. I invested in things like body media and I like the picks and shovels of the stable coin.

industry. So for instance, there's a coin CRV, it's called Curve. Curve finances the company behind it. And what they do is they have in the crypto world, in the decentralized finance world, they power a stable coin exchange. So if people exchange their Bitcoin for stable coins, or maybe their Circle stable coin for Tether stable coin, for whatever reason, and they do billions of dollars worth of transactions per year,

and they give a nice yield as well. And so I think, think curve is well there and there are a bunch of tokens like this curve is well positioned among others to ride this stable coin growth. So what do I mean by stable coin growth? Well, I'll give an example, Scott Bessent, the US Treasury secretary has just the other day came out and said, the stable coin industry, which is worth in the world $200 billion.

should be worth over $2 trillion in the US alone. And why would the Secretary of Treasury say that? Like I've never heard someone make a prediction like that about industry growth. Well, he's saying that because he wants stable coin companies like Circle make money by selling you this digital dollar and they sell it for a dollar. You get to do whatever you want with your Circle stable coin and Circle the company puts your dollar into treasury bills.

and they keep the 3 % spread, you know, that they make on treasury bills while you have your digital dollar. So, so what happens is the stable coin industry, if it grows to 2 trillion, they become the largest lenders to the United States of America. Like that, that's why every country in the world is going to want the stable coin industry to grow and use their own treasury bills as, or, or, or loans as, as the collateral. So, so the stable coin industry,

which again is the biggest and oldest use case of crypto is going to grow 10 to 20 to 50 X over the next couple of years. So I think curve, which again runs the stable coin exchange will be a beneficiary. And there's maybe like a handful of other coins that are beneficial.

Slava Rubin (26:55)

Awesome. So

if you could only choose between public market circle or public

James Altucher (27:00)

I wouldn't choose

public market circle. It went up too much.

Slava Rubin (27:03)

Right, so I was gonna say Circle or Curve, you pick curve, correct?

James Altucher (27:06)

100 % yeah, I mean Circle of course was obviously a Value proposition at when it IPO but I didn't get any shares in the IPO so I think Better than that though is the picks and shovels of the stable coin industry which curve and a few others Let's just say in the whole crypto world. I'm a skeptic too. So there's maybe two million crypto projects out there and I would say best case Maybe there's 20 or 30 that actually are real

you know, tokens that provide real utility and will be worth something and everything else going to go to zero.

Slava Rubin (27:42)

So Peter Thiel just put in a bunch of money into Tom Lee's Ethereum treasury company. Yeah, what do think about that?

James Altucher (27:48)

Yeah, BM NR

I think it's very smart. Tom Lee is making the bet. First off, everybody kind of put Ethereum down for the past year and a half because it wasn't going up for whatever reason. Bitcoin was going up and not Ethereum. Everyone said, Solana is better than Ethereum. Everyone was like trashing Ethereum. But Ethereum for what it does is by far, it's 10 times bigger than Solana. It's by far the biggest token you would use to make crypto projects.

Slava Rubin (28:01)

Yep. Right. And Solana, yep.

James Altucher (28:19)

So a lot of the state and Tom Lee specifically said he referenced the same industry I just referenced. He specifically said Ethereum powers a lot of the stable coin industry. So that's why he wants he thinks Ethereum is going to basically flip Bitcoin arise to even more than than, you know, be more valuable than Bitcoin. And I might agree with that. I'm more bullish on Ethereum right now than than Bitcoin. And you heard me be very bullish on Bitcoin. Peter Thiel, by the way.

Slava Rubin (28:42)

So Ethereum's

at like 3K right now, plus minus. You said that Bitcoin would hit 250 by the end of next year. What's Ethereum gonna hit then by the end of next year?

James Altucher (28:54)

I mean, okay, it's really hard to make predictions. I can make some extreme guess, but I definitely could see it at, you know, 30 or $40,000 up from 3000. And let's...

Slava Rubin (29:06)

By the end of next year,

you think Ethereum might be 30 10X.

James Altucher (29:10)

It could be I'm not predicting that. I mean, if I were to really make a prediction, I would say 10 to 15. But yeah, no, but 30 30 though is possible. And 10 to 15, I think is going to happen. I think I think clearly five by the end of this year. But but 10 to 15 by the end of next year. And and look, Peter Thiel, let's just look at his background. He knows what he's doing. He in terms of digital currencies, he started the first digital currency company PayPal.

Slava Rubin (29:15)

Okay, we want the real prediction, okay.

James Altucher (29:40)

So, know, 30 years ago. he definitely knows. And he's been on, look, the reason I invested in Buddy Media in the first run is because Peter Thiel was investing in Buddy Media in the first round. So my one rule of investing is that in every investment I do, there has to be someone smarter than me in that investment. I don't, and so the key is I don't consider myself so smart. So it's not a high bar, but I always look for

who is really smart in this industry that is side by side with me in this investment. They have to have the exact same terms as me in this investment. so Peter Thiel is someone I would always follow into investments. One time I had an opportunity to invest privately when it was still private in Palantir and it was a $5 billion valuation at that time. And I was like, my gosh, 5 billion, how much really more valuable is it gonna be?

Now it's like a hundred billion dollar company on its way to being a trillion dollar company. So I didn't invest in that. So one time I did not invest side by side with Peter Thiel.

Slava Rubin (30:39)

broke your own rule.

James Altucher (30:40)

I did. But I always look like like if Warren Buffett buys IBM, I'm just making this up Warren Buffett were to buy IBM at 100. And now the stocks at 95. What am I gonna if I run into Warren Buffett at a party? What am I gonna say like Warren? How could you? How could you be so stupid? Like you bought it all? No, I would just buy. It would be like Warren Buffett was my intern. I buy IBM at a discount to where my free intern Warren Buffett was telling me to buy it.

Slava Rubin (31:07)

Yep, yep. Let's change the chapter here for a second, which is the economy. Obviously, inflation is heating up just a little bit. We're not exactly sure where that's headed. Jobs are seeming pretty tight. There's talk about rate cuts, but who knows based on inflation and what the tariff impact is going to be. Overall, stock market is doing well. Crypto is really catching a bid. know, risk on assets are starting to feel a better. It's kind of unknown what's happening in the real estate market. Open-ended question.

what's happening in the economy and the stock market for the coming year.

James Altucher (31:38)

The economy is doing great. And the reason the economy is doing great, other than just the fact that in general, the US economy is always doing great, is AI is, and I don't wanna say this as a cliche, because I feel like everyone's saying this, but AI in every single Fortune 500 company, in every single division of every Fortune 500 company,

They're being told by their bosses, you must use AI to improve productivity and profitability. And they're doing it because there is so much money you can save and so much more money you can make using AI. A typical example will be, I talked to the CEO of freelancer.com or freelance.com and they're the biggest marketplaces, like 60 million freelancers who every day are bidding for jobs that are posted on freelance.com.

He said the number of freelancers has like tripled in the past year or so because of AI. And like it used to be the case, if let's say a record label needs a design for a record album cover. Okay. You would hire a designer and he or she would take a week or two to design the cover, maybe more and charge a lot of money. Now you can use AI and anybody could do 10 really good looking record covers in an hour. So

So the time to do things now, maybe you need a designer for the final touchup, but the, the, the, the, ability to do high quality output, whether it's code, write something legal work, you know, we're starting to see this in the, the medical field in various ways, everything from patient diagnosis to surgery is being done better and better by AI and, particularly with the addition of robotics. So.

This is a theme of the economy that kind of began, let's say two or three years ago, but it's going to continue like for the next 50 years. And it's going to be incredible. for productivity has to improve for us debt to go up. And that's what's happening.

Slava Rubin (33:35)

So let me.

Sorry, productivity has to improve for US debt to go down.

James Altucher (33:46)

No, for US debt to go up, for us to justify borrowing more money, the US economy has to be more productive. We have to produce ourselves out of kind of a debt hole. And that's what we're going to do. Because interest rates are not going to do it. Like cutting interest rates is not going to do it. It's AI. ⁓

Slava Rubin (33:50)

I see what he was saying.

Understood, understood.

So let's

do a lightning round here. So quick answers. So in the next 12 months, are we going to have a recession? As a matter of fact, before the next election cycle in November of next year, will we have a recession, yes or no?

James Altucher (34:19)

No.

Slava Rubin (34:20)

And will we see rate cuts by then?

James Altucher (34:23)

Yes, 100%.

Slava Rubin (34:25)

Literally a hundred percent meaning like 100 basis points or yeah, what is the basis points that you think will have?

James Altucher (34:27)

No, no, no, mean, 100 % chance, yes.

Well, you know, Trump's calling for 300 basis points, which I think if you were to do that, it actually would cause a problem for the economy. So, but I can easily see, you know, 100, 100 basis points before the midterm elections.

Slava Rubin (34:45)

Right, so 1 % cut.

James Altucher (34:47)

Yeah, not all at once, I hope.

Slava Rubin (34:49)

Understood. And then how about ⁓ unemployment? What is it going? Is it getting better or worse within by then?

James Altucher (34:57)

No, I think it's gonna

get better. People are worried AI is gonna take jobs, but it's gonna be the reverse. AI is gonna create millions of jobs. So I think it's gonna stick around.

Slava Rubin (35:05)

But isn't unemployment

quite tight already?

James Altucher (35:08)

Yeah. So, and that could cause inflation, but the issue with inflation is if productivity increases, you need the money to fuel, to keep the engine going. So it's okay to have more money in the system if productivity is going up. And that's what AI is going to do.

Slava Rubin (35:24)

So that was my next question, which is inflation. Does it stay steady at where it's at or is it up or down until the next cycle, the next election?

James Altucher (35:32)

Probably a little bit up. People say tariffs cause inflation. don't. Tariffs actually cause deflation. Yes, the products being tariffed will go up, but that's not what inflation means. Inflation means when it's across the board. So I constantly am reminding people of that. But I do think because the money supply has been going up lately and because of these increases in productivity,

I do think, and because of the tightness of the job market, I think inflation will go up a little bit, which is why it's going to be hard to justify cutting rates, but they need to cut rates because the US needs to borrow trillions of dollars to roll over older debt. So they're going to have to cut rates at some point just so we don't have hundreds of billions of dollars a year of extra interest rate payments.

Slava Rubin (36:17)

Interesting, so you sound quite optimistic in general. What are your?

James Altucher (36:21)

And not for foolish reasons. You look at your own life like AI is and I hate to keep banging the table AI. AI is changing your life. everything, probably everything you do has some component of AI that has improved your life, but also crypto as well. Look, last year, there was $27.3 trillion of stablecoin payments. Most of that was cross border payments. So someone from Mexico working here, sending money back to their family.

they send it through a stable coin rather than going through a bank or through Visa or whatever, because the fees are one 10th or one 100th, they would be to traditional ways. there's a lot of things are deflationary. AI makes things deflationary. I don't have to pay $1,000 for a logo. I could pay $10 for a logo. I don't have to pay $3 to send $100 to my family across the world. I could spend three cents.

So ⁓ technology is deflationary. So that's gonna fight the inflation.

Slava Rubin (37:19)

What are the watch outs though? What are some of the concerns that although a lot of the positives that you're saying could happen for productivity, et cetera, what are the things that that, know, railroad this or maybe could go sideways?

James Altucher (37:32)

Yeah, I'd be worried about if, um, if there's another COVID like situation where they suddenly, know, inflation is very related to the supply of money in the world. If suddenly, if you had a dollar in your pocket, and suddenly everyone in the world went from having $1 to $2, then all prices would double just automatically. And so that's what happens when they print trillions of dollars, it becomes a significant percentage of the overall wealth in the world. mean, 40 % of all the money printed in history,

was printed in the year, you know, between 2020 and 2021. So, you know, we got to watch out. Yeah. Printed in history. Yeah. So we have to be careful about printing money. And this is not who's president, who's not president. This is not who's Federal Reserve, who's not in Federal Reserve. A lot of this was a reaction to a disaster like COVID. Similarly, a disaster like the Great Recession in 2008, or disaster like 9-11. You know, a lot of money was printed to avoid

Slava Rubin (38:06)

Is that true? that right? 40 % of all the money is between 2020. Wow.

James Altucher (38:30)

people being scared. That has some good sides, every government action, and I'm not going to be all anti-government here, but every government action has good intentions and sometimes good consequences, but also always some bad consequences. And you have to be watchful of that, particularly if you're playing around with the supply of money in the world.

Slava Rubin (38:48)

I know that you already mentioned some interesting crossover between crypto and AI. Are there any other topics or things that you want to mention in that area?

James Altucher (38:57)

I mean, I'm so, when you really do the deep dive on, on TAO, I am so excited about that, which is why I started an entire public company just to invest in TAO. So, you know, I'm really, I, I think, I think TAO could potentially be become even bigger than Bitcoin, which sounds ridiculous when I say it, but again, it's structured very similarly and has more wider use cases. So, and can be used as a currency as well. So

I'm very bullish on that.

Slava Rubin (39:26)

So you're referring to tau x, is that right?

James Altucher (39:28)

TAOX is the stock, TAO is the crypto.

Slava Rubin (39:30)

Right, right, right, right. So, TAOX is something that people can just buy on Robinhood or their brokerage.

James Altucher (39:35)

Yeah, yeah, they could buy anywhere. It's a trades on the NASDAQ.

Slava Rubin (39:38)

And is that basically like a TAO ETF like Bitcoin ETF would be for like Grayscale, etc.

James Altucher (39:45)

No, only because the grayscale ETFs don't allow staking and none of the ETFs right now allow staking. So with TAO, we can actually make revenues and earnings by staking it into the TAO ecosystem so people can use it as incentives to create AI companies.

Slava Rubin (39:50)

I see.

so is that the equivalent of like getting yield? ⁓ Perfect, perfect. So you obviously are super knowledgeable. What is it that you watch, listen to or read that makes James James?

James Altucher (40:04)

Yeah.

You know, of course, reading and watching all these things are very important, but the most important and I can't survive without doing those two things. But the most important thing is doing. And, you know, I've been following the crypto worlds for a long time and have written quite a bit about crypto and read a lot about crypto and talk to all sorts of crypto experts. But now actually doing major things in the crypto ecosystem forces me to kind of go to a level that I've never gone before.

Slava Rubin (40:42)

I love it. So not about what you watch, listen or read, but rather doing. That's a good one. We haven't heard that one before. And then you've already given us some predictions, but I'm going to put you on the spot for the official three years out segment, which is what is one public markets asset that you would invest in today that you think will do really well three years out. And what is one private asset? Private could be a public crypto token, but not on the public markets. So something that is

not considered a New York Stock Exchange type pick. So what would be your picks and why?

James Altucher (41:14)

Yeah, so of course, TAO X is going to be my public market pick because that's going to do very well. And I'm going to try to pick a crypto because you have because you have TAO X, you don't need to own the TAO crypto token because we'll do the owning of that for you. so a crypto token. Look, if you want to be safe and conservative, I would say Ethereum actually, I agree with Tom Lee and Peter Thiel. But if you want slightly more risk, but but I think maybe higher reward is is this

Slava Rubin (41:27)

Right.

James Altucher (41:42)

you know, curve that I mentioned, or I'll throw another one out there, is AAVE AAVE does lending against stablecoin collateral in the crypto world. So that's going to also be linked to stablecoin growth.

Slava Rubin (41:55)

So, TAOX in the public market is priced at what today?

James Altucher (42:00)

⁓ It's at like nine, something like that.

Slava Rubin (42:04)

And if you had to predict what it would be three years from now, what do you think it would be?

James Altucher (42:09)

200

Slava Rubin (42:10)

That's quite the bold prediction and Ethereum you already gave it.

James Altucher (42:12)

Because I think

it's going to go along with the growth of TAO.

Slava Rubin (42:15)

Sure, and Ethereum, you already gave us your prediction. So Curve and AAVE are both kind of originated during like DeFi summer and they kind of went down. You feel like they're gonna have still a huge run ahead of them?

James Altucher (42:28)

Oh yeah, because I think with this whole kind of oh, DeFi summer and crypto winter, like all these seasons of crypto, they don't really exist. It's again, it's a story people have told themselves. But cryptos that are used are gonna grow and the stablecoin industry, again, it's gonna grow like 10 to 20 X in the next couple years. So that means Curve, which has the biggest stablecoin exchange, that's gonna grow and AAVE, which is the biggest

lender of stable coins, that's going to grow. yeah, has nothing to do with like, yes, everything's been correlated to Bitcoin to some extent, but that's going to start to change also.

Slava Rubin (43:06)

Amazing. just looking at my notes here, we covered a lot going back from when you started with computer science and being one of the only people that knew how to code. Nevertheless, who how to actually code a website in New York City. Getting to do that for HBO and before you knew it, American Express sold your company for $15 million and proceeded to lose all your money, which I like how you said it. There's making it, there's keeping it and there's growing it and you still have to learn how to

keep it and grow it, you sure were good at making, you need to have a lot of optimism to be a good investor. You have the idea of, you know, getting 10 ideas a day and exercise your brain, just like your legs, you need to be able to make sure you're using your creative muscles so that you don't atrophy. You know, you're well known for Choose Yourself, the book, which you went through your own experience of the ups and downs of your investing and making your money and losing your money. You gave us some perspective on how you like to invest your net worth about 20 % cash, 60 % pre IPO, 20 % crypto, but you're

pre IPO and your crypto are really having a crossover. You definitely stay away from all that other stuff, which seems boring to you, which is the real estate, the private credit, the bonds, the art collectibles. It's really all about the storytelling that you're looking for. You gave us some bold predictions with Bitcoin potentially at 250 K by the end of next year, and even a million by 2027. I'm going to call you out on that one. So I'd like to have you back on there if we actually hit a million.

James Altucher (44:23)

Sure.

Look, whether it does or doesn't, I'm sure there'll be a lot of talk about it either way. So I'll be happy to go back on.

Slava Rubin (44:29)

It's all good.

So you're a big fan of TAO and obviously you're looking for the token for AI, so decentralized AI. You're a fan of Curve. And then you were pro Ethereum as well, whether it's through BMNR and following Peter Thiel, even though you broke your own rule once. And you're a fan of the productivity as to how that will improve our economy. There is no recession in your future. Rates will probably go down by a hundred basis points.

And you do think unemployment is going to stay tight, but inflation is going to go up a little bit. You did say though, technology is totally ⁓ deflationary. Awesome factoid, which is 40 % of all money printed was actually printed during COVID between 20 and 2021. So that is awesome. You didn't tell us any things that we need to watch, listen or read, but you did say just do, which I am a huge fan of that. And of course you finished with your three years out predictions.

You double, triple, then quadruple down on TAOX and TAO saying that it would go from nine to 200. You're a fan of Ethereum and you gave us some extra bonus picks with Curve and AAVE, stablecoin exchange and a stablecoin lender. James, we covered a lot. Thank you.

James Altucher (45:38)

Thank you so much for having me on the show. I really appreciate it.

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