The most important aspect to me was that I had absolutely no commodity market data whatsoever that the market would slide. How could I have had any commodity market data? I was too far away all the time. I had listened to no predictions, studied no fundamentals, and heard no rumors. I had simply gotten out on the basis of the behavior of my stocks.
Later when I studied my commodity market data I had sold automatically, I found that they subsequently slid down very low indeed in the recession period. Look at the following table:
When I looked at this table, the commodity market data told me this: If my stop-losses had not taken me out of the market I could have lost about 50% of my investment. I would have been like a man in a cage, locked in with my holdings and missing my opportunity to make a fortune. The only way I could have escaped would have been by smashing out, taking a 50% loss, possibly ruining myself, and gravely impairing my confidence for commodity deals.
I could, of course, have bought these stocks and "put them away.' This is a classic solution among people who call themselves conservative investors, they just have incorrect commodity market data. But by now I regarded them as pure gamblers. How can they be non gamblers when they stay with a commodity even if commodity market data shows that it continues to drop? A non gambler must get out when his stocks fall. They stay in with the gambler's eternal hope of the turn of a lucky card.
I thought of the people who paid 250 for NEW YORK CENTRAL in 1929, according to my commodity market data. If they were still holding it today it was worth about 27. Yet they would be indignant if you called them gamblers!
It was in this mood of non-gambling that I received my monthly statement in the first week of September 1957, and I began to check up on my commodity market data. I found I had made up the money I had lost on JONES & LAUGHLIN and my original capital of $37,000 was almost intact. Many of my operations had been moderately successful, but commissions and taxes had taken a great deal.
When I went into the accounts more closely I found I had the unenviable distinction of coming out of the greatest bull market in history with a lot of experience, a great amount of commodity market data, much more confidence - and a net loss of $889.