The recognition of our own mistakes should not benefit us any more than the study of our successes. But there is a natural tendency in all men to avoid punishment. When you associate certain mistakes with a licking, you do not hanker for a second dose, and of course, all stock-market mistakes wound you in two tender spots—your pocketbook and your vanity. But I will tell you something curious: a stock speculator sometimes makes mistakes and knows that he is making them. And after he makes them, he will ask himself why he made them—and after thinking over it cold-bloodedly a long time after the pain of punishment is over, he may learn how he came to make them, and when, and at what particular point of his trade—but not why. And then he simply calls himself names and lets it go at that.
Of course, if a man is both wise and lucky, he will not make the same mistake twice. But he will make any one of the ten thousand brothers or cousins of the original. The mistake family is so large that there is always one of them around when you want to see what you can do in the fool-play line.
To tell you about the first of my million-dollar mistakes I shall have to go back to this time when I first became a millionaire, right after the big break of October 1907. As far as my trading went, having a million merely meant more reserves. Money does not give a trader more comfort, because, rich or poor, he can make mistakes and it is never comfortable to be wrong. And when a millionaire is right, his money is merely one of his several servants. Losing money is the least of my troubles. A loss never bothers me after I take it. I forget it overnight. But being wrong—not taking the loss—that is what does the damage to the pocketbook and to the soul. You remember Dickson G. Watts’ story about the man who was so nervous that a friend asked him what was the matter.
“I can’t sleep,” answered the nervous one.
“Why not?” asked the friend.
“I am carrying so much cotton that I can’t sleep thinking about it. It is wearing me out. What can I do?”
“Sell down to the sleeping point,” answered the friend.
As a rule a man adapts himself to conditions so quickly that he loses the perspective. He does not feel the difference much—that is, he does not vividly remember how it felt not to be a millionaire. He only remembers that there were things he could not do that he can do now. It does not take a reasonably young and normal man very long to lose the habit of being poor. It requires a little longer to forget that he used to be rich. I suppose that is because money creates needs or encourages their multiplication. I mean that after a man makes money in the stock market, he very quickly loses the habit of not spending. But after he loses his money it takes him a long time to lose the habit of spending.
After I took in my shorts and went long in October 1907, I decided to take it easy for a while. I bought a yacht and planned to go off on a cruise in southern waters. I am crazy about fishing, and I was due to have the time of my life. I looked forward to it and expected to go any day. But I did not. The market wouldn’t let me.
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