How did you first get involved in trading? Back in 1972, when I was a real estate broker, I had a friend who was a commodity broker. He and I had
gone to school together.
Did your friend get you interested in the markets? It didn't take much to get me interested because my father's hobby was gambling. He was very good at
percentages, and I used to watch him at the crap tables. In a sense, I think being a trader is in my genes. Also,
trading fascinated me because of my mathematics and science background in college and because I had a commodity
broker friend who was into computer strategies.
Do you remember your first trade? I remember it exactly. I opened up a commodity account with $8,400, and I went long corn based on a
recommendation made by the firm's grain analyst. Three days later, I was out $7,800.
Did your broker friend advise you to follow the analyst's recommendation? Yes, and he also followed it. What I didn't realize then was that the market had been rising for some time and
was already overbought when I went long. It wasn't even a bad reaction. I just got in on the move too late. I didn't
have enough margin to keep the position going. Also, my guts turned on me, and I didn't want to put up any more
money.
It sounds to me like your friend let you put on a position that was clearly out of line with any money management principles. It was one of those get-rich-quick schemes.
Did you know anything about the markets at the time? Absolutely nothing. If I flipped through a chart book, it looked like a collection of TV test patterns to me.
Did you have any idea of the risk involved? I knew that the chances of my winning were very slim because I didn't know what I was doing.
Didn't it occur to you that you should learn something before you started? No, because I was desperate for a change; I didn't like being a real estate broker.
