The market was at $130 when you bought it. Where was it at this time? About$117.
So even though the magnitude of this decline was much smaller than the price rise in plywood, you lost almost as much money because you had a much larger position in lumber than you had in plywood. Right. During those two weeks, I was constantly on the verge of being wiped out. It was the worst two weeks
in my whole life. I went to the office each day just about ready to give up.
Giving up just to stop the pain, or so that you would at least have something left? Both. I was so upset that I couldn't stop my hands from shaking.
How close did you come to being wiped out again? Well, my $12,000 had shrunk to under $4,000.
Did you say to yourself, "I can't believe I have done this again"? Yes, and I never did it again. That was the last time I bet everything on one trade.
What eventually happened? I managed to hold on, and the market finally turned around. There was a shortage, and the government
didn't seem to have the will to stop the futures market.
Was it insight or courage that gave you the willpower to hold on? Desperation, mainly, although there was a support point on the charts that the market couldn't seem to take
out. So, I held on. At the end of that year, the $700, which I had ran up to over $ 12,000 and back to under $4,000,
was now worth $24,000. After that scary experience, I never really overtraded again.
The next year, 1973, the government began lifting the price controls. Because the price controls had created
numerous artificial shortages, when they were lifted, there was a tremendous run-up in many commodities. Just
about everything went up. Prices doubled in many markets, and I was able to take advantage of the tremendous
leverage offered by low futures margins. The lessons I had learned from Seykota about staying in markets with major
trends really paid off. In 1973, my account grew from $24,000 to $64,000.
