1. The Four Essentials

“It’s tough to make predictions...especially about the future.”

—Yogi Berra

A floor broker once told me the following story, and he swears it’s true:

In the 1960s, there was a corn speculator who traded in the pit at the Chicago Board of Trade. He was known for plunging: taking big positions.

Early one summer, he put on a large short corn position for his own account. (Short positions make money if prices fall but lose if prices rise.)

Within days, the weather began to heat up in the midwestern United States, where the corn is grown. The corn crop needed rain, and prices began to rise. Day after day, the sun shone, the temps rose, not a cloud in the sky—the corn crop was burning up. The market continued to rally against ...

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