Were you just adding to your position as the market went up, or did you have some plan? I had a plan. I would wait until the market moved up to a certain level and then retraced by a specified
amount before adding another unit. My pyramiding did not turn out to be the problem.
The market had entered a string of limit-up moves. On April 13, the market hit a new record high. The
commotion was tremendous. My broker called me at home and said, "Soybeans are going to the moon. It looks like
July is going limit-up, and November is sure to follow. You are a fool to stay short the November contracts. Let me lift
your November shorts for you, and when the market goes limit-up for the next few days, you will make more
money." I agreed, and we covered my November short position.
ALL of it?! All of it [he laughs loudly].
Was this a spur of the moment decision? It was a moment of insanity. Fifteen minutes later, my broker calls me back, and he sounds frantic. "I don't
know how to tell you this, but the market is
limit-downl I don't know if I can get you out." I went into shock. I yelled
at him to get me out. The market moved off of limit-down by a little bit and I got out.
Did you end up getting out at limit-down? I got out between limit-down and slightly above limit-down. I can tell you the dimensions of the loss. At the
moment I covered my short November position leaving myself net long July, I was up about $45,000. By the end of
the day, I had $22,000 in my account. I went into emotional shock. I could not believe how stupid I had been—how
badly I had failed to understand the market, in spite of having studied the markets for years. I was sick to my
stomach, and I didn't eat for days. I thought that I had blown my career as a trader.
But you still had $22,000 compared to your original stake of only $3,000. Keeping things in perspective,
you were still in pretty good shape.
Absolutely. I was in good shape, but—
