Even though you actually ended up making a substantial amount of money on the trade? I multiplied my money by nearly sixfold on that trade. I was, of course, insanely leveraged, and I didn't
understand how risky my position was.
Was getting out of your entire position immediately after your broker called to tell you the market was limit-down a matter of panic, or do you think you had some instinctive common sense about controlling risk? I'm not sure. At that moment, I was confronted with the realization that I had blown a great deal of what I
thought I knew about discipline. To this day, when something happens to disturb my emotional equilibrium and my
sense of what the world is like, I close out all positions related to that event.
Do you have a recent example? October 19,1987—the week of the stock market crash. I closed out all my positions on October 19 and 20
because I felt there was something happening in the world that I didn't understand. The first rule of trading—there
are probably many first rales—is don't get caught in a situation in which you can lose a great deal of money for
reasons you don't understand.
Let's get back to the period after your soybean trade. When did you start trading again? About a month later. After a few months I had my account back to about $40,000. Around that time, I
answered an ad for a trading assistant position at Commodities Corporation. I was interviewed by Michael Marcus in
his usual idiosyncratic manner. He had me return to Commodities Corporation several weeks later. "Well," he said, "I
have some good news and some bad news. The bad news is that we are not hiring you as a trading assistant; the
good news is that we are hiring you as a trader."
How much money did Commodities Corporation give you to trade? Thirty-five thousand dollars.
Were you trading your own money, as well, at the same time? Yes, and that is something I am very glad about. Commodities Corporation had a policy that allowed you to
trade your personal account, as well as the company account, and Michael and I were very aggressive traders.
