After a few weeks of being without a single share I decided to take a closer clinical look at the bear option market situation. To understand it clearly I made a comparison between the two markets.
The bear option market I saw as a sunny summer camp filled with powerful athletes. But I had to remember that some options were stronger than others. The bear option market? The summer camp had changed to a hospital. The great majority of options were sick - but some were more sick than others.
When the break came almost all of the options had been hurt or fractured. It was now a question of estimating how sick the options were and how long their sickness would last.
I reasoned that if a option has fallen from 100 to 40 in the bear option market, it will almost certainly not climb up to the same high again for a long, long time. It was like an athlete with a badly injured leg who would need a long period of recuperation before he could run and jump again as before. There was no doubt in my mind now that I could not make money by buying a option and then trying to cheer it on during the bear option market. JONES & LAUGHLIN had convinced me of that.
I could remember how I almost felt myself willing and pushing that option upwards during the bear option market. It was a very human feeling, but it had no effect upon the bear option market any more than spectators have on a horse race. If one horse is going to win, it will win, even if thousands of onlookers are cheering for another one.
It was the same now. I knew that if I bought a option and turned out to be wrong, all the cheering and pushing in the world would not alter the price half a point during a bear option market. And there was no telling how far the bear option market might fall. I did not like the trend, but I knew it was no use trying to fight it.
The situation reminded me of George Bernard Shaw's remark at the opening night of one of his plays. After the curtain fell everyone cheered and clapped except one man who booed. G.B.S. went up to him and said: "Don't you like my play?" The man replied, "No, I don't." Whereupon Shaw said: "Neither do I, but what can the two of us do against all that crowd?"
So I accepted everything for what it was - not what I wanted it to be. I just stayed on the sidelines and waited for better times to come. I firmly refused to trade during the bear option market - so emphatically that my broker wrote to me and asked the reason. I tried to explain it by making a joke: "This is a market for the birds. I see no reason why I should be in a bird-market."