"YOU MUST OBSTRUCT" "BEFORE YOU CAN CONSTRUCT"
In my earlier years when I first started out in business and in ray real estate activities I started out buying and improving and reselling residential properties. Then I grew into buying and Improving farms and land and subdividing farms into tracts and reselling. When my health problem that I told you about in the last chapter improved and I began studying my creed again I decided to start all over with what I had proved in the past. In other words I planned to hold fast to that which was good. This was in the fall of 1981 and we were still in the worst real estate market that I had encountered during my business life. I decided first of all that I would lay aside for the time being any study of the markets, of Gann material, and any trading in the commodity markets. I was literally "sick of it". I gave notice to terminate the lease on my ticker, packed it up, and sent it back. I closed out my commodity trading accounts and had all funds sent home. I determined to return to those things which had worked for me in the past. I read my creed every day- once in the morning and the last thing at night. I tried to practice it where I could every day. I went back to the real estate
business with new vigor. I passed on the farms because there just wasn’t that much market. And I did not want to take the risk necessary to buy and subdivide -a farm. If I could work off an option, I would. I went right back to the beginning- residential properties. This time I was faced with a new problem that I didn't have several years ago when I was
dealing with houses. That problem was 17% and 18% interest rates. People were just not moving around very much. (I live in a small town). I realized that people wanted to acquire better housing but it was extremely difficult for first time buyers and young people and slightly less difficult for those
who already had equity built up. So I started trading. I started with the lower priced range and all the older, lower assumable rates properties that I could find. I practiced my creed in my business every day just as I had done several years ago. I would try to satisfy any real estate need as well as I could. If the person in need needed to sell, I tried to be the buyer; if the person in need needed to buy, I tried to be the seller; my creed said that to get supply you must open a channel and to open a channel you must do what? You create a need or find a need. So I looked for needs in the only place I knew to look-the real estate market. Even in the so-called tough housing market of late 1981 and first part of 1982 by the practicing of my creed I had a good period financially. Then I got back into farms as well as houses and from January 1, 1982 through March 30, 1982 I had sold a little better than one million dollars
worth of real estate on commissions. (This is a good place to ask you a question that I have often wondered about. What is it that makes a man ignore what he is successful at and suited for-pursue something else that appears more golden, but yet causes him 16
losses and misery, when he could do so well Just performing his useful function? A personal example-me and the real estate
market and me and the commodity markets.) I felt good again and hoped that I had learned something about life and the markets and most of all something about myself. I was back at a good foundation or base-My Creed. (Yours too, now, if you want it.)
Now, through pain, frustration, and not knowing what else to do, I had begun to destroy the wrong attitudes and
perspectives that I had allowed to develop in me. But I was doing this tearing down without knowing it. One day in early 1982, I had purchased a property that I intended to remodel and then sell. I went to talk with this contractor that specialized in remodeling. He was working on a job when I found him; and the lady that he was working for was complaining about how much of her house he had torn out and how bad it looked. This contractor said "yes ma'm, it shor looks terrible but you must fust dee-struct fo you can con-struct.1' This statement almost floored me. YOU MUST FIRST OBSTRUCT BEFORE YOU CAN CONSTRUCT. All the things that I said to you in the last chapter about tearing out, tearing down, ripping out these bad habits and attitudes and thinking and perspectives did not just come to me then. It came to me as the sudden revelation when this contractor told the lady who was worried about her home falling in on her; and seeing her and him standing in the awful looking mess that was her home and all the rubble that looked like it could never be put back into anything useful again. It came to me then that this was like the squares or building blocks that I mentioned in the last chapter. Our lives and market habits and living habits are the same as the home
needing remodeling. I saw clearly for the first time that if I needed remodeling-AND I DIDI-then I would have to tear myself down the way I described to you in the last chapter. I saw then too that I had already made the proper start by getting back to the useful part of my experience and life that had worked for
me in the past, namely trying to live and conduct my business by my creed. I had proved that my creed was good and sound and so I would hold fast to it and use it for the basis (base or foundation) of my life in the conduct of my affairs (the
building of my squares of living blocks). I had also proved that my real estate activities were sound and useful and that I would use them as my base or foundation for providing a living for ray family and a service for my community. I resolved to always In the future to conduct my real estate activities and my personal life as nearly as I could on the natural laws in my creed. I had proved my creed for ten years, left it, and came back to it, and found that it still proved itself to be true. I also resolved not to ignore my real function; and not to go out on any wild
searches for "master anything". I knew now that I had something so valuable that everything I needed could be supplied by the practice of what I already had right here within me (my creed- learned and lived-inside of me. Precisely where the ancients had always said it would be found.) I also knew at this precise time that I would some day find the master time factor of Mr. Gann’s and this is when I resolved that when I did find it I would make an effort to reveal it to others that may have searched long and hard for it.
Bu t I co n t em p l at ed th a t I w ou l d o nl y re v e al it if it tu rn ed o u t to be worthwhile to others.
My course now was clear for the first time since 1979, no, even further back. No longer, would I allow myself to fear the future about the economy or good times or bad times. Now through
living my creed I had the confidence to know that I would do the same things in bad times that I would do in good times. I would meet the demand of others by being supply. Also, I would go back to the commodity markets but this time with a different perspective and attitude. I would go back to studying Mr. Gann’s works, but with a different perspective and attitude. I would go back to my search for the master time factor, but with a different attitude and perspective. I would do exactly what the contractor had done with the ladies house. I would establish my base or foundation as I Indicated above. I had proved it. I knew it was sound. I would take the commodity markets, the Gann material and the search for the master time factor, and I would tear down everything that I could not prove good. I would only do this in my spare time when it WOULD NOT DISRUPT OR HARM MY GOOD SOLID FOUNDATION OR BASE. I would work out a methodical plan of action that would allow me to do these things by depending on myself from within myself. I would not pay any attention to what this person thought about the markets or what that person thought about the markets. I would try to
Isolate myself from discussion of the markets and discussion of Gann material. I would work as the ancients would say "In Silence, By Silence, Through Silence." I would "PROVE ALL THINGS, AND HOLD FAST TO THAT WHICH WAS GOOD."
CHAPTER 5 I BEGIN AGAIN
I had not understood Mr. Gann's rules or they simply did not work for me. In fact they had not worked much better than the pathetic formula that "my friend" had sold me. The angles hadn’t helped me, the squares hadn't helped me, the
calculators and master charts hadn't helped me, the trend indicators as I had understood and tried to use them hadn't helped me, and the time periods that I had tried to use hadn't helped me. I didn't really know anyone including the Gann
experts or maybe I should say particularly the Gann experts that I had met or heard of that the Gann material had really made successful. The only people that I knew that had made any money on the Gann material were people who were selling information or seminars or advisory letters about his material. (Me too, now, huh?)
At any rate, if I were going to prove all things, and hold fast to that which was good, at this point I would have to throw away the entire Gann trading method. I knew that if the Gann material was ever going to provide a basis for a successful trading system for me, I would have to have a better
understanding of it than I had previously had or I couldn't use it. I had always felt that the missing element which would provide the "key" to unlocking the usefulness of his material was that same old master time factor. Until I had that key I knew that the rest of his material was useless to me in trading the markets. I HAD ALREADY PROVED THAT. I also knew that if I were ever going to find the master time factor, I would have to do it myself. No one was going to give it to me or sell it to me. I HAD ALREADY PROVED THAT TOO.
Circumstances related to you earlier had already caused me to tear down and destroy those things In myself that I had to eliminate. Now I needed to do the same thing with the Gann material. I have indicated to you in the dedication of this
booklet how I felt about Mr. Gann. Nevertheless, common sense (yes, I had it back now) dictated that if I were going to use only those parts of his work that I had proved useful, then I would have to THROW THE WHOLE THING OUT! Now, dear reader, what do you think I did this time? You know me pretty well by now, don’t you? No, you are wrong this time. I DID EXACTLY THAT-I THREW THE WHOLE THING OUT. I told you that I had learned my lessons. I learned them well. I learned them the hard way, the painful way. Now my lessons had taught me that if it wasn't good, I wouldn't build on a bad foundation. The bible says that you will know a tree by its fruit. In the commodity markets "good" means profits. I hadn't made any before, using the Gann material, why should I expect to make them now doing the same things that I did then.
Actually, I did retain one single item of the Gann material. The M5 day calendar period. I incorporated it into my rules. I was determined to acquire the ability to trade the markets. I opened
a trading account In the spring of 1982. I traded this account based on some simple common sense rules. I made every effort to incorporate into these rules the opposite attitudes and perspectives that I had earlier. I don't propose at this point to go into my trading rules, but, you "know what some of them would be just by reading my story up to this point. For
example, I practiced patience by having a rule that I could only enter the market on a new position on one certain day of the week and only under certain conditions. I quit keeping up with quotes during the day and would only update my charts the next morning. I would save up the news during the week and only read it on the weekends. I quit discussing the markets with people. I limited myself to a situation where if I reached a certain profit that was three times the loss that I had allowed myself for a given month then I would quit trading for the
month; which ever was reached first the profit or the loss. I had a rule that I would be in no more than two different positions at the same time. I also had a rule that if an account had losses for two straight months I would close the account out. All of my rules were just simple common sense rules that would help me be with a trend and get me out soon if I were wrong. Most of the rules kept me from trading during the time that the markets were opened. I was trading now not to make a living, a killing, or for my ego, but simply to make profits of a good return on my Investment, and secondarily to learn more about attitude of myself and to find useful things that would work in the markets. I was gathering materials that I could use in building my successful trading program. When I found something useful I kept it. At the end of 1982, for the first time since I had been trading I had a net profit for the
entire year. I had spent very little time trading the markets that year. In other words the less time I spent trading the more money I made.
Since I had so much more free time now that I wasn't looking up squares and time periods and divisional points of price and
angles and calculators and getting quotes every hour. I
decided to spend that free time looking for one thing. Yes, you know me. The master time factor. I knew that without it and maybe even with it that the rest of the Gann material was
worthless to me as far as trading the markets. I had not wasted my time in studying the Gann material though, because I had re-discovered the value of my creed, and you remember that this was the most valuable knowledge that I ever found.
I had copies of every piece of material that I had been able to
acquire about Mr. Gann. I had every piece of all of the published material that Mr. Gann had ever written except for a small copyrighted booklet entitled "Senator Warren Harding of Ohio Will Be Our Next President". You may not have ever heard of this booklet. I had never heard of it either. But I found it listed in the copyright section in Washington D.G. It was
supposed to be in the Library Of Congress but they could not find it. Yes I went to Washington to see what I could find out about Mr. Gann and his work. I told you I had looked hard. Well, as I said, I had all his published materials and several pieces of documents, letters,
and unpublished materials. I had notes that I had made in interviews with different people that knew Mr. Gann. I even went to Miami once to interview the people in the
neighborhood that Mr. Gann lived in his latter years. Also, I had talked with a man that knew who Mr. Gann’s personal astrologer was. I never knew until then that Mr. Gann would have a personal astrologer. I guess its like thinking that a physician would not have a physician. I will tell you about Mr. Gann's astrologer in a later chapter. Anyway, what I am trying to say is that I had a pretty fair collection of material written by Mr. Gann. I decided to use what I had and analyze it in ever way that I could.
First I analyzed every word that he used when he talked about time. I looked the different words up in the dictionary and compiled a glossary of sorts. I checked to see if he used different words at different places to say the same things. For example, I found that when he used "or" between two words those two words meant the same thing to him. But they would not have necessarily meant the same thing to me. I would have ordinarily understood them differently. I made a list of words that were different, but meant the same to him. This process began to give me a sort of mindset to the language and expressions of Mr. Gann and I began to see some new meanings to things that he said that I had earlier understood differently.
The next thing that I did was to analyze his quotations and see how many of them that I could find. I also wanted to see why he used them where he did and were they used for any other reason than what they appeared to be on the surface. I knew that my grandparents had expressions that were quaint to our expressions today. I wanted to see if any of those old expressions had different meanings than they do today. So, I checked on all these language aspects. I found that dictionaries, encyclopedias, and vocabularies were areas of great potential for learning about anything. They give you concise brief
Frequently I found that my understanding of a word or concept was much more vague and ambiguous than I had realized. By looking up important words and even simple words I began to have a clearer mental picture of concepts. By understanding the precise meaning of words and concepts and the various shades of meanings I began to understand better and I began to sense some subtle things that I had not earlier comprehended.
Another thing also came to my attention about this time
(Spring and Summer of 1982). That thing was the introduction of the Stock Index Futures to the commodity markets. I told you earlier that I had never been interested in buying and selling stocks themselves. Because of my lack of interest in the stock market I had never spent much time studying Mr. Gann’s stock market books and his stock market course. Oh, I had read