Did you get out of your whole position? Not only that, but I was so excited that I lost count of how much I was selling. I accidentally wound up being
short a substantial amount of soybeans, which I bought back 40 to 50 cents lower. That was the only time I made a
lot of money on an error.
I remember a situation just like that. It was the cotton bull market when prices almost reached $1 a pound. To this day, I recall I was long cotton and the week's export figure came out showing a half million
bales of exports to China. It was the most bullish cotton export figure I had ever seen. But instead of opening limit-up
the next day, the market opened only about 150 points higher and then started trading off. That proved to be the
exact high.
Another interesting example, I remember, occurred when we were in a very inflationary period and all the
commodity markets were trading in lockstep fashion. On one particularly powerful day, almost all the markets went
limit-up. On that day, cotton opened limit-up, fell back, and finished only marginally higher for the day. That was the
market peak. Everything else stayed locked limit-up, but cotton never saw the light of day again.
Is the implied rule that if you find a common behavior between markets, you want to sell the one that is lagging as soon as it starts heading down? You absolutely want to put down a bet when a market acts terribly relative to everything else. When the news
is wonderful and a market can't go up, then you want to be sure to be short.
What kinds of misconceptions about the markets get people into trouble? Well, I think the leading cause of financial disablement is the belief that you can rely on the experts to help
you. It might, if you know the right expert. For example, if you happen to be Paul Tudor Jones' barber, and he is
talking about the market, it might not be a bad idea to listen. Typically, however, these so-called "experts" are not
traders. Your average broker couldn't be a trader in a million years. More money is lost listening to brokers than any
other way. Trading requires an intense personal involvement. You have to do your own homework, and that is what I
advise people to do.
