Reminiscences of a Stock Operator
Stock investing is a relatively recent phenomenon and the inventory of true classics is somewhat slim. When asked, people in the know will always list books by Benjamin Graham, Burton G. Malkiel's A Random Walk Down Wall Street, and Common Stocks and Uncommon Profits and Other Writings by Philip A. Fisher.
You'll know you're getting really good advice if they also mention Reminiscences of a Stock Operator by Edwin Lefèvre. Reminiscences of a Stock Operator (Wiley Investment Classics) is the thinly disguised biography of Jesse Livermore, a remarkable character who first started speculating in New England bucket shops at the turn of the century. Livermore, who was banned from these shady operations because of his winning ways, soon moved to Wall Street where he made and lost his fortune several times over. What makes this book so valuable are the observations that Lefèvre records about investing, speculating, and the nature of the market itself. For example: "It never was my thinking that made the big money for me.
It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon." If you've ever spent weekends and nights puzzling over whether to buy, sell, or hold a position in whatever investment be it stock, bonds, or pork bellies, you'll be glad that you read this book. Reminiscences of a Stock Operator is full of lessons that are as relevant today as they were in 1923 when the book was first published. Highly recommended. Harry C. Edwards This text refers to an out of print or unavailable edition of this title.
Positive Review of Book: Reminiscences of a Stock Operator
Literary critics are often asked, "If you were stranded on a tropical island and you only had one book to read for the rest of your life which book would you choose?" Well, if you posed that same question to the world's professional traders the response "Reminiscences of a Stock Operator by Edwin LeFevre" would be the most frequent response, and by a large margin. Despite being written in the early 1920's, Reminiscences of a Stock Operator continues to be the most useful and most-loved book ever written on the subject of trading and speculation.
In this novel, LeFevre brilliantly describes the life and times of the book's protagonist, Larry Livingston, a pseudonym for Jesse Livermore, one of history's most famous traders. Livingston never considered himself an investor; he was a speculator. He didn't mind being long or short, he just wanted to be correct. His approach was to figure out what the path of least resistance was and then go with the flow. He didn't believe in picking tops or bottoms; he waited for a trend to be confirmed and then jumped in, thus never fighting the tape. Livingston never traded out of boredom or solely for the sake of the excitement it brought to him. He knew that he could get rich by following a defined trend and thus calmly waited on the sidelines when the market was directionless.
Had Livingston been alive today he would certainly be a momentum/price action based trader. Although a sizeable portion of the book vividly describes the highs and lows of Livingston's exciting life, the meat of the book comes in the form of trading commandments that every successful trader can likely repeat even while asleep. These are the trading rules that have been passed down from mothers to daughters, fathers to sons, mentors to students, winners to losers. This is the book from which almost every subsequent general trading book is derived. If you have ever wondered where the trading rule "Never average down" came from, just turn to page 154. Where did the comparison between greed and fear first originate? You'll find it on page 130.
Some other rules to live by that were introduced in LeFevre's book are: The trend is your friend. History repeats itself. No stock is too high to buy or too low to sell. Let your winners run and cut your losses quickly. For beginners, this book will give you a strong and sturdy foundation on which you can build your successful trading career. It will fill your absorbent trading mind with vitally important trading principles in a clear and understandable manner. For experienced traders, reading this book again will galvanize your mind and refresh your spirit for trading. It brings clarity as to why we trade and how to best go about it. This is a must read for beginners and a must re-read for all others.
Negative Review of Book: Reminiscences of a Stock Operator
I bought this book a couple of years ago, because of a reference in John Train's 'The Money Masters'. In fact....the book contained the exact quote used in Harry Edwards review above. Nice quote, but thats it. The book is amusing enough, and I found the discussion about 'bucket shops' and various investment practices in the largely unregulated early 20th century interesting. But, of course, you are never told how the hell to know whether to 'sit tight' or sell. There is really nothing specific or useful to anyone trying to make money in any market - legally, at least. Perhaps a little market history - the fact that markets rise and fall, will be useful to some people. A much better, and more amusing view of investment excesses can be found in the John Rothchild's highly entertaining 'A Fool and His Money'. Note that this book preceeded, and has absolutely no connection with the popular 'Motley Fools' Addendum - Dec 21, 2002. Original August 2, 1998. I am amazed at all the positive reviews -- and I am down at the bottom of the review section, so I doubt many people will plow down to see this. And, is everyone clear that: 1. This is a fiction - not a biography. 2. It was ghostwritten by a newspaperman. 3. Jessie Livermore died broke. 4. A lot of the "techniques" have been illegal for decades (ie Pools). I guess that I find the incredibly positive reviews to be an interesting fact. Hope the reviewer's are on the other side of my trades.
EDWIN LEFEVRE was trained as a mining engineer, but became a journalist at age nineteen. He produced eight books, including The Making of a Stockbroker, during his 53-year writing career. He is a celebrated finance author made famous by his publication of the fictionalized story of Jesse Livermore, which first appeared in The Saturday Evening Post in 1922.
Table of Contents
- I. The Biggest Plunger Wall Street Ever Saw: June 10, 1922
- II. The Boy Trader Beats the Bucket Shops: June 17, 1922
- III. I Was Dead Right-I Lost Ever Cent I Had: July 1, 1922
- IV. The Quarter Million Dollar Hunch: July 15, 1922
- V. My Day of Days: August 12, 1922
- VI. No Man Living Can Beat the Stock Market: Sept. 2, 1922
- VII. Playing Another Man's Game: Sept 16, 1922
- VIII. $1 Million in Debt; $1 Million Repaid: Oct. 7, 1922
- IX. Black Cats and Irresistible Impulses: Oct. 21, 1922
- X. The Coffee Corner and the Price Fixing Committee: Dec. 16, 1922
- XI. Why the Public Always Loses: May 19, 1923
- XII. Kings, Paupers, and the Hazards of the Game: May 26, 1923
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