Why I Started Stockpickr

I needed some money and all of my current plans were not working out. First off, I was running a hedge fund. But my fund was really a “fund of hedge funds”.

In other words, I invested in other people’s funds.

Which, when you think about, is really a stupid idea. First off, the 12 funds I was invested in were charging me fees and they would “lock up” my money for a year (i.e. I couldn’t take the money out for at least one year and even then there were penalties and conditions).

Then, I had to turn around and charge fees to my investors and lock them up.

It was really a clusterfuck, pardon my language.

So I tried to sell it. And I had a buyer. A bank. They offered me a nice amount BUT they had one condition: I had to sign a six year employment agreement. And, if during those six years I ever quit OR if they ever fired me, I had to return all the money and they could still keep the fund.

What a bad idea.

I was almost crying when I read the agreement because I thought we had a good thing going on. My lawyer even said, “I thought slavery was outlawed”.

I did what I always do then. I stopped returning their calls. They kept calling me every day. Ten times a day, “We can negotiate. Call us back.”

But sometimes when things are so far apart and someone is clearly trying to pull something over on you then there’s no sense in calling them back.

They ended up going out of business anyway. Good riddance.

I was staying at the Chelsea Hotel the day I got the contract and I remember my business partner, Dan, telling me we can’t take this deal. I was still willing to take it.

I ended up drinking myself to death in the bar next door, El Quijote. They had to revive me and carry me up to my room at the end of the night.

The next day, the bartender, who couldn’t even speak English, gave me his uniform he wore the day before. He said, “Here. I owe you.” I took it but he couldn’t explain why.

But I still needed money. I pitched a major $10 billion hedge fund on an idea I had. Here’s the idea: (you can steal it if you want. It’s still a good idea): I would take the top 30 best investors: Warren Bufffett, Carl Icahn, etc. and I would buy all of the stocks they own but at discounts to where they bought them.

Any big investor has to file every quarter what they own. So I could roughly guess what price they paid.

And if Buffett owned Exxon at $100 and it went down to $50 its like Warren Buffett works for me, gave me his full analysis about why Exxon was cheap at a $100 AND I get the 50% discount to what he paid. Thanks Warren!

And guess what: I pay Warren nothing for his hard work. BAM!

I would diversify across 30 of the top investors and diversify in every industry and hedge my positions by shorting (betting against) the broader markets.

I don’t want to get too technical here.

But I modeled out the idea and the results were phenomenal. I pitched the $10 billion hedge fund and they loved it. They were willing to start me out with $100 million and build up from there but I had to come in and sit at their office. What?? AND I had to stop all of my writing and all of my other “activities”.

I couldn’t do it. What if I gave up everything I was doing and then I had a 0% year for some reason. What if, by chance, it was the worst year ever for my system. As risk-taking as I often am, I am very risk-adverse when someone tells me I can only do ONE thing in my life.

I didn’t want to take the risk of giving up everything AND making no money. At any given time I have to have many things going on.

Right now, this second, I am trying about 10 different things. I diversify everything in my life, from thoughts to career changes.

By the way, how do I know this is still a good idea. Because even a year ago I pitched this to a $10 billion+ fund (a different one) and they loved it but I didn’t feel like doing it then (I was too busy blogging away.)

Be my guest. Steal it. Make a lot of money. Eat a lot of food. Divorce your wife. Buy a plane.

All I ask if you take this idea is that if you ever see me lying in the street with a needle sticking out of my elbow then you give me a twenty dollar bill so I can buy more heroin (not crack. I think heroin makes you happier than crack).

So now I was really desperate for some good ideas. I started unwinding the fund of funds.

It was a waste of time. Thank god I started unwinding when I did. Sometimes luck favors the…lucky.

I forget the expression. But I’m the luckiest person alive because if I had even waited a few months, and then given the time it takes to unravel one of those things, I would’ve been stuck in the 2008 mess.

Instead, I managed to save all my investors money and avoid the entire crisis.

But what to do? I went back to my roots. Creating Internet sites! I could be an entrepreneur again. Whoopee!

I created a site first: keauty.com (the domain long since expired), which was like Facebook but for beauty contest aspirants.


I even had a deal with some woman’s magazine that I would advertise them if I would become their official online beauty contest.

I then added dating site features so people could contact each other.

Essentially someone can log in, put up their profile, put down all their interests, and get voted on 0 to 10 about whether they were beautiful or not.

And I would give money to the winner each month.

But nobody was signing up. So I tried other ideas. CelebrityKeauty.com.

I hired an intern to put up celebrities as if they were beauty contest aspirants. I’d put in their profile, etc. I’d even put in historical figures.

It would be fun. The idea is people would check back every day to see who else would be put up. I hired an intern, described what I needed, and just let him go at it.

The next morning I woke up to see the first celebrity he put up: Osama Bin Laden. And in the profile he described all the great things Osama Bin Laden had done for his people.

I called him up and I tried to be gentle. I didn’t want him tracking me down and blowing up my house. I said, “here in America, everybody hates Osama Bin Laden”.

He said, “but around the world, many people love him.” I said, “but we’re in America. You’re in America. I’m in America. Let’s cater this site to Americans, OK?”

But I fired him.The site was no good anyway.

I did lots of contest sites like that. I did one site where people would upload the funniest videos and everyone would vote.

I even did SmokeLove.com (see picture above) a dating site for smokers.

Then I combined all the sites into one contest site.

Then I made it meta: you can make any contest site you wanted. I called it Unlea.sh. I got a media class at Syracuse University to bulk make contest sites. I had about 100 contest sites running. Most beautiful pet. Most delicious recipe. Smartest person, etc. I had two well-known investors who wanted to invest.

But I wasn’t feeling the magic. You need magic at some point to know an idea is good.

What’s magic? It’s that feeling you get when everyone is writing you saying, “I can’t live without this website.” It’s that feeling you get when even you think, “I can’t live without this website.”

This service I’m providing is the best service in the world. It’s that feeling you get when people are using your site and you love them and they love you.

I wanted that feeling. SmokeLove.com wasn’t doing it for me.



My business partner said, “well, I guess that was worth a try. Let’s cool off now. We’ve tried ten different ideas and nothing is working.”

Because we were spending money on every site. It’s no good watching your bank account get lower and lower. At a job, you get paid every month or every two weeks. You know what your bank account will be.

But our bank accounts were getting lower and remember the first thing I said when I started writing this, “I needed money”.

My last big deal had been at least two years earlier. And then the IRS paid a visit to my house. They put a sticker on my door. So I needed the money.

For the past 16 years I’ve only eaten what I’ve killed. At this point, it’s the only thing I know how to do – despite the incredible volatility in that, the fear, the anxiety, the stress – there’s also love, and freedom, and happiness.

“One more try,” I said. I have this one idea. What if we make a recommendation engine on stocks.

It’s like what we were pitching that 10 billion dollar fund: lets put up Warren Buffett’s portfolio and the portfolios of the top 1000 investors.

Then you can put in your portfolio, see who correlates you, and then you get stock picks.  So we built that. Then we added more and more things.

We added a feature so that every day, for free, people would see the signals and systems I used to use when I was trading for hedge funds.

Then we added forums for community. We added the ability to make blogs about stocks. We added a Q&A system so people could ask each other questions.

The one thing we never added was a news feed. How come? Because news, even about stocks, is all lying and bullshit and doesn’t belong on any trader’s desktop.

In other words, instead of having a $10 billion fund invest with us, we set up all of our strategies for free on a website and added community.

And no news. Guess what the headline was a year ago: “Markets worried about Greece!” Guess what the headline is today: “Markets worried about Greece!” The news is BS. They lie to you and manipulate you and, of course, entertain you by tickling your fears.

I didn’t want that. Instead I set up my IDEAL investment website.

People loved it. I was getting new users every day. I got an email from someone who said, “please block me from your site because I am spending too much time on it.”

It was the exact website I would use as an investor. And it was profitable from day one (we had advertisers) and I loved almost every moment of it.

And then I sold it.

I don’t get attached to anything.

See also, “The Day Stockpickr Was Going to Go Out of Business – A Story of Friendship”

And follow me on twitter



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