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taken the first wrong step I took the second and the third, and
of course it muddled me all up. I allowed myself to be persuaded
not only into not taking my loss but into holding up the market.
That is a style of play foreign to my nature and contrary to my
trading principles and theories. Even as a boy in the bucket
shops I had known better. But I was not myself. I was another
man -- a Thomasized person.
I not only was long of cotton but I was carrying a heavy
line of wheat. That was doing famously and showed me a handsome
profit. My fool efforts to bolster up cotton had increased my
line to about one hundred and fifty thousand bales. I may tell
you that about this time I was not feeling very well. I don't
say this to furnish an excuse for my blunders, but merely to
state a pertinent fact. I remember I went to Bayshore for a
rest.
While there I did some thinking. It seemed to me that my
speculative commitments were overlarge. I am not timid as a
rule, but I got to feeling nervous and that made me decide to
lighten my load. To do this I must clean up either the cotton or
the wheat.
It seems incredible that knowing the game as well as I did
and with an experience of twelve or fourteen years of
speculating in stocks and commodities I did precisely the wrong
thing. The cotton showed me a loss and I kept it. The wheat
showed me a profit and I sold it out. It was an utterly foolish
play, but all I can say in extenuation is that it wasn't really
my deal, but Thomas'. Of all speculative blunders there are few
greater than trying to average a losing game. My cotton deal
proved it to the hilt a little later. Always sell what shows you
a loss and keep what shows you a profit. That was so obviously
the wise thing to do and was so well known to me that even now I
marvel at myself for doing the reverse.
And so I sold my wheat, deliberately cut short my profit in
it. After I got out of it the price went up twenty cents a
bushel without stopping. If I had kept it I might have taken a
profit of about eight million dollars. And having decided to
keep on with the losing proposition I bought more cotton
I remember very clearly how every day I would buy cotton,
more cotton. And why do you think I bought it? To keep the price
from going down! If that isn't a supersucker play, what is? I
simply kept on putting up more and more moneymore money to lose
eventually. My brokers and my intimate friends could not
understand it; and they don't to this day. Of course if the deal
had turned out differently I would have been a wonder. More than
once I was warned against placing too much reliance on Percy
Thomas' brilliant analyses. To this I paid no heed, but kept on
buying cotton to keep it from going down. I was even buying it
in Liverpool. I accumulated four hundred and forty thousand
bales before I realised what I was doing. And then it was too
late. So I sold out my line.
I lost nearly all that I had made out of all my other deals
in stocks and commodities. I was not completely cleaned out, but
I had left fewer hundreds of thousands than I had millions
before I met my brilliant friend Percy Thomas. For me of all men
to violate all the laws that experience had taught me to observe
in order to prosper was more than asinine.
To learn that a man can make foolish plays for no reason
whatever was a valuable lesson. It cost me millions to learn
that another dangerous enemy to a trader is his susceptibility
to the urgings of a magnetic personality when plausibly
expressed by a brilliant mind. It has always seemed to me,
however, that I might have learned my lesson quite as well if
the cost had been only one million. But Fate does not always let
you fix the tuition fee. She delivers the educational wallop and
presents her own bill, knowing you have to pay it, no matter
what the amount may be. Having learned what folly I was capable
of I closed that particular incident. Percy Thomas went out of
my life.
There I was, with more than nine-tenths of my stake, as Jim
Fisk used to say, gone where the woodbine twineth-up the spout.
I had been a millionaire rather less than a year. My millions I
had made by using brains, helped by luck. I had lost them by
reversing the process. I sold my two yachts and was decidedly
less extravagant in my manner of living.
But that one blow wasn't enough. Luck was against me. I ran
up first against illness and then against the urgent need of two
hundred thousand dollars in cash. A few months before that sum
would have been nothing at all; but now it meant almost the
entire remnant of my fleet-winged fortune. I had to supply the
money and the question was: Where could I get it? I didn't want
to take it out of the balance I kept at my brokers' because if I
did I wouldn't have much of a margin left for my own trading;
and I needed trading facilities more than ever if I was to win
back my millions quickly. There was only one alternative that I
could see, and that was to take it out of the stock market!
Just think of it! If you know much about the average
customer of the average commission house you will agree with me
that the hope of making the stock market pay your bill is one of
the most prolific sources of loss in Wall Street. You will chip
out all you have if you adhere to your determination.
Why, in Harding's office one winter a little bunch of high
flyers spent thirty or forty thousand dollars for an overcoat -
and not one of them lived to wear it. It so happened that a
prominent floor trader who since has become world-famous as one
of the dollar-a-year men-came down to the Exchange wearing a fur [ Pobierz całość w formacie PDF ]