Book Title : Reminiscences Of A Stock Operator

Author : Edwin Lefevre

Review Date : March 2011


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About the Author

Edwin Lefevre began writing about Wall Street in 1897. During his career, he wrote eight books, worked for the New York Sun, served as financial editor of Harper′s Weekly, and wrote for the Saturday Evening Post.

On The Cover

First published in 1923, Reminiscences of a Stock Operator is one of the most widely read, highly recommended investment books 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 is the fictionalized biography of Jesse Livermore, one of the greatest speculators ever. The timeless insights found within these pages have inspired countless generations of investors and made this book one of the foremost investment classics of all time. And although most modern–day investors and traders are familiar with this investment classic, many do not know that Reminiscences of a Stock Operator first appeared in the 1920s as a series of articles and illustrations in The Saturday Evening Post.

In 1922, Edwin Lefevre began publishing his fictionalized account of Livermore’s exploits in a series of articles for The Saturday Evening Post, which appeared under the title "Reminiscences of a Stock Operator".

Jesse Livermore won and lost tens of millions of dollars playing the stock and commodities markets during the early 1900s, at one point making ten million dollars in one month of trading–an astronomical sum for this time. His ideas and keen analyses of market price movements are as true today as they were when he first implemented them. Offering profound insights into the motivations, attitudes, and feelings shared by every investor, Reminiscences of a Stock Operator is among the most compelling and enduring pieces ever written on trading in the markets–and this new illustrated edition brings this story to life like never before.

"Although Reminiscences...was first published some seventy years ago, its take on crowd psychology and market timing is as timely as last summer′s frenzy on the foreign exchange markets."
—Worth magazine

"The most entertaining book written on investing is Reminiscences of a Stock Operator, by Edwin Lefèvre, first published in 1923."
—The Seattle Times

"After twenty years and many re–reads, Reminiscences is still one of my all–time favorites."
—Kenneth L. Fisher, Forbes

"A must–read classic for all investors, whether brand–new or experienced."
—William O′Neil, founder and Chairman, Investor′s Business Daily

"Whilst stock market tomes have come and gone, this remains popular and in print eighty years on."
—GQ magazine

BookWorms View

Always quoted as the classic trading book of all time this book is a great yarn. It is the riveting fictionalised story of Jesse Livermore and how at a young age (14) just out of grammar school he went to work marking up stock prices in a local brokerage house. It was here he learnt his trade. He then went on to trade in the “bucket houses” of the time, before progressing to the large brokerages of New York. During his trading career he made and lost a number of fortunes.

For today’s beginner trader it can be read from cover to cover as a very enjoyable story from a bygone era. There is however far more to this book than meets the eye.

It is remarkable just how many similarities there are between his trading experiences of 100 years ago and modern markets. The proliferation of “bucket shops” in the early 1900’s can be likened to the vast number of spread betting operations sprouting up today. This has opened up various forms of trading to the “man in the street” that were not possible even 10 years ago. Even though the similarities are marked, todays markets and operations are however governed by far more regulation to help protect modern traders and investors.

The book should be read the first time from cover to cover to allow the whole story to unfold as told by LeFevre. Then, if you go back and read it again slowly and you’ll start to notice all sorts of information that wasn’t apparent the first time around. Again this is one of those books that delivers more to the more experienced. On each reading further lessons from the market are exposed. Livermore definitely comes across as a very shrewd trader who learnt most of the tricks of the trade during his roller-coaster career. Chapter 10 is a good example, it is full of snippets of trading wisdom which, if acknowledged will stand any reader in good stead today.

For the avid researcher the 1940 book by Livermore “How to Trade Stocks” is an interesting outline of his methods. Although out of print it often can be found on the Internet. Although not covered in the book Livermore committed suicide in 1940 after suffering from depression in his later years.

To finish this review I can’t resist outlining the funniest few paragraphs from the book that made me wonder about my own trading status – it’s similar to the poker adage – if you don’t know who the sucker at the table is…..

Livermore is describing fellow traders.

“About the time I discovered what a small percentage of what I should have made I was getting I discovered something else, and that is that suckers differ among themselves according to the degree of experience.

The Tyro knows nothing, and everybody, including himself knows it. But the next, or second, grade thinks he knows a great deal and makes others feel that way too. He is the experienced sucker, who has studied – not the market itself but a few remarks about the market made by a still higher grade of suckers. The second grade sucker knows how to keep from losing his money in some of the ways that get the raw beginner. It is this semi-sucker rather than the 100% article who is the real all the year round support for the commission houses. He lasts about three and a half years on average, as compared with a single season of from three to thirty weeks which is the usual Wall Street life of a first offender. It is naturally the semi-sucker who is always quoting the famous trading aphorisms and the various rules of the games. He knows all the don’ts that ever fall from the oracular lips of the old stagers – excepting the principal one, which is: Don’t be a sucker!

This semi-sucker is the type who thinks he has cut his wisdom teeth because he loves to buy on declines. He waits for them. He measures his bargains by the number of points it has sold off from the top. In big bull markets the plain unadulterated sucker, utterly ignorant of rules and precedents, buys blindly because he hopes blindly. He makes most of the money – until one of the healthy reactions takes it away from him in one fell swoop. But the Careful Mike sucker does what I did when I thought I was playing the game intelligently – according to the intelligence of others. I knew I needed to change my bucket shop methods and I thought I was solving my problem with any change, particularly one that assayed high gold values according to experienced traders among the customers.

Most – let us call ‘em customers – are alike. You find very few who can truthfully say that Wall Street doesn’t owe them money. In Fullerton’s there were the usual crowd. All Grades!...”

The lesson here is not to let yourself be one of the crowd – you owe it to yourself to read this book.

BookWorms Rating - 5 Stars


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Couldn't resist it - Read this again over the weekend, always a joy!