Reminiscences of a Stock Operator By Edwin Lefèvre

First published in 1923, Reminiscences of a Stock Operator is the most widely read, highly recommended investment book ever. Generations of readers have found that it has more to teach them about markets and people than years of experience. This is a timeless tale that will enrich your life--and your portfolio. Reminiscences of a Stock Operator


Edwin Lefèvre Ñ 9 characters

If you have the slightest interest in stock markets then you should read this book. Even though it got dry at some parts in the middle of the book, I truly enjoyed it. English What i think is he really was an heavy trader who cared more for the game of stock broking principles rather than the money part.A detailed book of intrinsic thoughts and feelings as an stock broker experiences during the trade off from his early trading days itself and how it actually affected his trading actions.good read English There was nothing new under the sun.

I was recommended this book about two months ago by a dear friend from my high school days. He had noticed that I was reading books on trading and investments. He said that this book is quite popular with the insiders of the finance industry, and not so much with the general public. He was right, as a general public, I had never crossed my paths with this book, and I might never have if not for my friend who works with the leading investment bank. He told me that Reminiscences of a Stock Operator was a historical fiction loosely based on the life of the famous American trader Jesse Livermore. I had never heard of Jesse Livermore; so I did what people do when they do not know about something or someone. I checked the Wikipedia page. It read: At one time, he was one of the richest people in the world; however, at the time of his suicide, he had liabilities greater than his assets. It was then I knew I was going to read this book. If you are reading this, Kumar Ayush, thank you for this recommendation.

Are you a good shot?

Well, said the duellist, I can snap the stem of a wineglass at twenty paces, and he looked modest.

That's all very well, said the unimpressed second. But can you snap the stem of the wineglass while the wineglass is pointing a loaded pistol straight at your heart?

An unexhaustive list of insights from this textbook of speculation disguising as a historical novel based on the life of Jesse Livermore (pioneer of day trading):

1. There never is anything new on Wall Street, because speculation is as old as the hills.

2. There is only one side to the stock market; and it is not the bull side or the bear side, but the right side. Therefore, in a bull market trade with the bulls, and in a bear market trade with the bears.

3. Never argue with the tape. (I guess it means price action?!) Tape is your telescope.

4. You do not know until you bet. The game teaches you the game.

5. Human nature condemns virtually everyone to being a sucker.

6. Never trade to get even or in an effort to buy something in particular.

7. Being adaptable is more important than being smart or rich.

8. Believe in yourself and your judgement, don't believe on tips.

9. If the unusual never happen then there would be no difference in people, and there would not be any fun in life.

10. Guessing develops a man's brain power.

11. No man can consistently beat the stock market.

12. There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!

13. No diagnosis, no prognosis. No prognosis, no profit.

14. They say you never grow poor talking profits. No you don't. But neither do you grow rich taking a four-point profit in a bull market. The big money is not in the individual fluctuations, but in the main movements.

15. It never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight! Men who are both right and sit tight are uncommon.

16. It is sin to change your mind on a position after receiving well-meaning, persuasive but erroneous guidance from a colleague or a friend.

17. Remember that stocks are never too high for you to begin buying or two low to begin selling. But after the initial transaction, don't make a second unless the first shows you a profit.

18. Those who confine themselves too closely to statistics are poor guides. There is nothing so fallacious as facts, except figures.

19. After a man makes money in 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.

20. The business of the trader in commodities is simply to get facts about the demand and the supply, present and prospective. He does not indulge in guesses about a dozen things as he does in stock market.

21. The man who is right has two forces working in his favour — basic conditions and the men who are wrong.

22. It's inseparable from human nature to hope and to fear. When market goes against us we hope that every day would be our last day. And when market goes our way we fear that the next day will take away all our profits. A successful trader has to reverse these natural impulses. Instead of hoping he must fear; instead of fearing he must hope.

23. If I am walking along a railroad track and I see a train coming toward me at sixty miles an hour, do I keep on walking on the ties? Friend, I side-step. And I do not even pat myself on the back for being so wise and prudent.

24. The only thing to do when a man is wrong is to be right by ceasing to be wrong.

25. I am firmly convinced that the public's losses would be greatly reduced if no anonymous statements of a bullish nature were allowed to be printed. I mean statements calculated to make the public buy or hold stocks.

26. There is no asphalt boulevard to success in Wall Street or anywhere else. Why additionally block traffic?

Also, this was the first book I read that had interesting footnotes. In fact, it was hard to be able to read this book without the footnotes. There were some things which went completely over my mind, I guess it will be a tough read for the uninitiated, so I wouldn't recommending to those who are about to sail in the markets for the first time. English This book is almost a hundred years old, but it's timeless. It chronicles the life of one of the most legendary stock traders. It reads like a fiction book. One can learn and have fun. English Reminiscences of a Stock Operator is a rollercoaster ride on pre SEC stock markets. It’s the wild west of finance by someone who understood every nuance of it. The book was written in the first person by Edwin Lefevre, but he refers to the hero throughout as Larry Livingston, and it is widely recognized to be the autobiography of Jesse Livermore, to whom the book is dedicated. It was first published in 1923 and republished every decade since. Human failings never go out of style. Especially when they’re larger than life, and well-written.

It is a refreshing tour of the markets at the turn of the last century. There were only 275 stocks on the NYSE, so it was much easier to have a handle on the day to day movements. Most stocks never traded at all, making it even easier. All the stocks could be displayed on one big board. If the market traded a quarter of a million shares, it was a huge day. There was ticker tape for data, and boys would post the latest trades on giant boards at every brokerage. There was no SEC and no taxes on profits. There was very little real news, and therefore plenty of rumors and tips. News was routinely withheld until insiders finished trading. A move of ten points in a day was a big deal. Overnight borrowings by brokers were 100 to 150 percent per annum. It was different world.

Livingston was what we would call a day trader. As a teenager, he went to bucket shops and put down margin – a dollar a share on hundred dollar stocks - and waited there for a gain of a dollar before selling. The bucket shop never actually executed the trade. It took the money and when the contract closed, it either kept the cash or paid out winnings. If there were too many bets on a stock, the shop could influence the tape by actually buying or selling the underlying stock for its own account. The fix was in, and bucket shops appeared all over the country.

As a 14 year old, Livingston was the kid posting the numbers. It was the only paying job he ever had. He remembered all the numbers every day, he said, and could predict patterns, which was his system. But it only worked well at bucket shops, where he could get an instant fill at the desk, because the order was never actually sent to the exchange floor to be executed. When he tried it at a real New York brokerage, he lost.

Livingston’s life quest was to learn from his mistakes and find the undefeatable system. It wasn’t about the money, he said, but about the self-discipline – the game. “I am so accustomed to losing money that I never think first of that phase of my mistakes. It always the play itself: the reason why.” He looked at losses as tuition fees, he said.
Incredibly, he made millions and lost them again almost immediately. He was a multimillionaire in his early twenties, in 1907. But soon had to declare personal bankruptcy on over a million dollars. He owned three yachts but soon had to rent a room – in Chicago – where he tried to start over as an unknown.

He did not practice diversification. When the tape told him something, he was all in, fully margined. So when he hit, it was gigantic. When he missed, he got wiped out. When he could not see something going up, it must therefore go down, so he sold short, massively. Once, when someone cornered a commodity, he broke it by shorting a related commodity, causing the whole edifice to crumble and allowing him to get out, at his own price. He understood it all.

The ride is dizzying. The story is engrossing. The adventures are captivating. It moves effortlessly. There is a challenge of sorts, in deciphering the jargon of the era: “reaction” is a retracement or reversal, for example. A “break” is a sharp fall in price. You quickly figure it out. Overall, it is a total delight, an education, and a warning.

The writing is often terrific. Here’s a description of the manager of a New Haven bucket shop: “He’d say good morning as though he had discovered the morning’s goodness after ten years of searching for it with a microscope and was making you a present of the discovery, as well as the sky, the sun, and the firm’s bankroll.”

Of interest might be that nearly all the famous names in the book are unknown today. The traders, the brokerages, the CEOs and directors, and even their companies sound made up to a 2018 ear. Perhaps this should not be surprising, when you realize none of the original companies in the Dow Jones Industrials are still there. The huge successes, the huge corporations – pretty much all have faded away. Above it all sits the market, Livingston’s muse. His message was that while disciplined investors can pick stocks and win, no one can beat the market. His mission to perfect his game was therefore a failure. In real life, Livermore lost it all one last time, and shot himself, the decade after this book first came out.

David Wineberg

1- Another lesson I learned early is that there is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market to-day has happened before and will happen again. I've never forgotten that. I suppose I really manage to remember when and how it happened. The fact that I remember that way is my way of capitalizing experience.

2- It takes a man a long time to learn all the lessons of all his mistakes. They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side. It took me longer to get that general principle fixed firmly in my mind than it did most of the more technical phases of the game of Stock speculation.

3- If the unusual never happened there would be no difference in people and then there wouldn't be any fun in life. The game would become merely a matter of addition and subtraction. It would make of us a race of bookkeepers with with plodding minds. It's the guessing that develops a man's brain power. Just consider what you have to do to guess right.

4- There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that ? You begin to learn!

5- After spending many years m Wall Street and after making and losing millions of dollars I want to tell you this: 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. I . I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.

6- The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.

7- Even as a lad I always got my own meanings out of such facts as I observed. It is the only way in which the meaning reaches me. I cannot get out of facts what somebody tells me to get. They are my facts, don't you see? If I believe something you can be sure it is because I simply must.

8- 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.

9- The weaknesses that all men are prone to are fatal to success in speculation—usually those very weaknesses that make him likable to his fellows or that he himself particularly guards against in those other ventures of his where they are not nearly so dangerous as when he is trading in stocks or commodities. The speculator's chief enemies are always boring from within. It is inseparable from human nature to hope and to fear. In speculation when the market goes against you you hope that every day will be the last day—and you lose more than you should had you not listened to hope—to the same ally that is so potent a success-bringer to empire builders and pioneers, big and little. And when the market goes your way you become fearful that the next day will take away your profit, and you get out—too soon. Fear keeps you from making as much^money as you ought to. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit. It is absolutely wrong to gamble in stocks the way the average man does.

10- The professional concerns himself with doing the right thing rather than with making money, knowing that the profit takes care of itself if the other things are attended to. A trader gets to play the game as the professional billiard player does—that is, he looks far ahead instead of considering the particular shot before him. It gets to be an instinct to play for position.

11- A trader, in addition to studying basic conditions, remembering market precedents and keeping in mind the psychology of the outside public as well as the limitations of his brokers, must also know himself and provide against his own weaknesses. There is no need to feel anger over being human.

12- A bear tip is distinct, positive advice to sell short. But the inverted tip that is, the explanation that does not explain—serves merely to keep you from wisely selling short. The natural tendency when a stock breaks badly is to sell it. There is a reason—an unknown reason but a good reason; therefore get out. But it is not wise to get out when the break is the result of a raid by an operator, because the moment he stops the price must rebound. Inverted tips!

13- The belief in miracles that all men cherish is born of immoderate indulgence in hope. There are people who go on hope sprees periodically and we all know the chronic hope drunkard that is held up before us as an exemplary optimist. Tip-takers are all they really are.

14- I have found that experience is apt to be steady dividend payer in this game and that observation gives you the best tips of all. The behaviour of a certain stock is all you need at times. You observe it. Then experience shows you how to profit by variations from the usual, that is, from the probable.

15- The manipulator to-day has no more need to consider what they did and how they did it than a cadet at West Point need study archery as practiced by the ancients in order to increase his working knowledge of ballistics. On the other hand there is profit in studying the human factors—the ease with which human beings believe what it pleases them to believe; and how they allow themselves— or by the dollar-cost of the average man's carelessness. Fear and hope remain the same; therefore the study of the psychology of speculators is as valuable as it ever was. Weapons change, but strategy remains strategy, on the New York Stock Exchange as on the battlefield.

16- Speculation in stocks will never disappear. It isn't desirable that it should. It cannot be checked by warnings as to its dangers. You cannot prevent people from guessing wrong no matter how able or how experienced they may be. Carefully laid plans will miscarry because the unexpected and even the unexpectable will happen. Disaster may come from a convulsion of nature or from the weather, from your own greed or from some man's vanity; from fear or from uncontrolled hope. But apart from what one might call his natural foes, a speculator in stocks has to contend with certain practices or abuses that are indefensible morally as well as commercially.

17- But today, a 'an is trading in everything; almost every industry in the world is represented. It requires more time and more work to keep posted and to that extent stock speculation has become much more difficult for those who operate intelligently. English I read this book virtually every summer, not only as a very interesting historical account of the life of a famous Wall Street trader in the early 1900s, but also as a learning tool. Or should I say continuing education. While the rules and regulations of Wall Street have changed dramatically since this book was first published in 1923, human nature remains virtually unchanged. Fear, greed, hope and pride are the same today as they were in the early 1900s and these core fundamental human emotions can account for the rise and fall of every Wall Street trader, from the tiny retail players to large hedge fund and private equity fund managers.

The book is a non-fictional Wall Street primer about Lawrence Livingstone, a pseudonym for Jesse Livermore, the legendary lone Wall Street trader whose personal fortune purportedly peaked between 1.1 and 14.0 billion dollars normalized to the value of today's US dollar. Through trial and error and constant self-evaluation, Livermore developed strict trading rules and guidelines that are still practiced today by some of Wall Street’s most successful operators. However, ignoring his own rules and falling to the emotions of hope, fear, greed and pride, Livermore was often flat broke during his career and entered bankruptcy in 1934.

While $800,000 worth of annuities purchased in 1917 to hedge against the risk of getting wiped out in the market prevented his family from destitution and poverty, Livermore used a revolver shot to the head to commit suicide in late 1940. He had been suffering from depression and in his suicide note he describes his life as a failure.

I have been enamored with Wall Street since I was a high school kid, not necessarily exclusively for the profit potential although that is surely a major motivator, but more with the observation of the psychology of the marketplace. Equity prices rise and fall according to vagaries of human emotions - think fear, hope, greed and pride. Remember Fed Chairman Alan Greenspan's famous irrational exuberance comment? The cauldron of fear, hope, greed and pride at full boil!

While this book is probably not a great fit for those with little or no Wall Street experience or interest, anyone who trades individual equities or commodities or is involved in overseeing a 401K account should give this investment classic a read ... often!
English This book is a marvel. It's well written. It clings very closely to the trade of a speculator, and barely touches on any personal life. For example, we only learn that the narrator has a wife when someone tries to use her to hook him into a stock manipulation. Everything focuses on the markets, and how the narrator interacts with the markets.

The technology, and the law, have changed enormously. But one of the central points of the book is that fear, greed, hope and ignorance will drive the markets for as long as humans make trading decisions. It's true that the advent of computerized trading robots may take those emotions out of some trading nowadays, and may lead to problems of their own. But those factors still weigh as heavily on the markets as they did at that time. And I don't think I've ever read a better explanation of how each of those things can impact trading decisions and price movements.

As with many memoirs, the beginning is the most electric, and has the most personal interest. Here, we start with his experience in totally unregulated bucket shops, where the businesses operate on extremely high margin, and actively take positions against their customers to fleece them. People still accuse some online brokerage houses of working the same way. And the explanation of those mechanics showed me, for the first time, how it might still be possible (though much more sophisticated nowadays).

Even more extraordinary, given the feeling of authenticity throughout this book, is that it is a fictionalized account. Lefevre was a journalist. Apparently, he spent a few months with one of the leading speculators of the day. He talked with him, got to know him, and interviewed him extensively. The book is a distillation of that experience and those interviews. More than anything else, I think this book captures the mindset of a trader, and that is why it is still so admired. It's well worth reading for anyone interested in trading, or generally in Wall Street. English An interesting insight into the work of Jesse Livermore, one of the most prominent stock speculators of the early 20th century. Given that this book is primarily an account of his numerous failures, contradictions, and his total inability to ever enjoy a vacation with his endlessly acquired, and then destroyed fortunes, the only thing I'm left confused by is why any sane human in their right mind would ever read this book as investment advice, which it seems that a good many confused people have. Read only for novelty, or as a moral fable against the hazards of stock market gambling. It's regrettable that this biography did not detail the end of Livermore's life, where he finally shot himself in the head, a deeply depressed and unhappy man. English 1) This is a 300 page bull-sesh

2) Good to audiobook in order to run the gamut of market reactions on yourself on somebody else's dime

3) Make no mistake this is not a good book, really dull compared to More Money Than God, When Genius Failed, or The Black Swan; less so than what little I read/remember of The Intell. Inv., but obvi RSO is addressing something wholly different than any of those

4) Definitely could have used this when I was a wannabe day trading teen, would have hated it, but I think it survives because he brings the truth

5) I wouldn't let the book's age deter you, because while the laws may be different and the schemes have different names the basic motivations are exactly the same

6) Read the quotes on the Wikipedia page to get the flavour or... English