I studied the situation in 1906 and I thought that the money outlook was particularly serious. Much actual wealth the world over had been destroyed. Everybody must sooner or later feel the pinch, and therefore nobody would be in position to help anybody. It would not be the kind of hard times that comes from the swapping of a house worth ten thousand dollars for a carload of race horses worth eight thousand dollars. It was the complete destruction of the house by fire and of most of the horses by a railroad wreck. It was good hard cash that went up in cannon smoke in the Boer War, and the millions spent for feeding nonproducing soldiers in South Africa meant no help from British investors as in the past. Also, the earthquake and the fire in San Francisco and other disasters touched everybody--manufacturers, farmers, merchants, labourers and millionaires. The railroads must suffer greatly. I figured that nothing could stave off one peach of a smash. _Such being the case there was but one thing to do--sell stocks!_ I told you I had already observed that my initial transaction, after I made up my mind which way I was going to trade, was apt to show me a profit. And now when I decided to sell I plunged. Since we undoubtedly were entering upon a genuine bear market I was sure I should make the biggest killing of my career. The market went off. Then it came back. It shaded off and then it began to advance steadily. My paper profits vanished and paper losses grew. One day it looked as if not a bear would be left to tell the tale of the strictly genuine bear market. _I couldn’t stand the gaff. I covered. It was just as well. If I hadn’t I wouldn’t have had enough to buy a postal card. I lost most of my fur, but it was better to live to fight another day._ I had made a mistake. But where? I was bearish in a bear market. That was wise. I had sold stocks short. That was proper. _I had sold them too soon. That was costly. My position was right but my play was wrong._ However, every day brought the market nearer to the inevitable smash. So I waited and when the rally began to falter and pause I let them have as much stock as my sadly diminished margins permitted. _I was right this time--for exactly one whole day_, for on the next there was another rally. Another big bite out of yours truly! So I read the tape and covered and waited. In due course I sold again--and again they went down promisingly and then they rudely rallied.