Reminiscences of a Stock Operator

Edwin Lefevre, “Reminiscences of a Stock Operator” Originally published in 1923, 273 pp.

Note that this book was originally published in 1923; I read the paperback issue republished in 2006 by John Wiley & Sons.  I was surprised when researching this book to find it is considered essential reading by today’s investors.  I came across this book the library by pure happenstance. 

Reminiscences is a fictionalized account of the life of the securities trader Jesse Livermore whom I have never heard of despite reading innumerable books involving financial speculators.  The book tells the story of  Livermore's progression from day-trading in the then so-called "New England bucket shops," to market speculator, market maker, and market manipulator, and finally to Wall Street where he made and lost his fortune several times over. Along the way, Livermore learns many lessons, which are shared with the reader through this somewhat fictionalized novel.  It is amazing how many concepts of behavioral economics, just gaining prominence today, were already known by people like Livermore in 1923.  The book is a tell-all confession of how traders worked in the era predating the federal securities laws. 

My Notes:

Pg. ix:  Though LeFevre wrote in the first person, Remininscences is based on several weeks of interviews with a trader whom he calls Larry Livingston.  Larry Livingston is a nom de guerre for Jesse Livermore, one of the greatest stock speculators ever.  Livermore had begun his career just before the turn of the century.  By the end of WWI, Livermore had made, lost, and made millions, and was generally being blamed for any sizable disruption in the stock and commodities markets, not always without reason.

 

Pg. 108:  You will find that any important piee of news given out hetween the closing kof one market and the opening of another is usually in harmony with the line of least resistance.  The trend has been established before the news is published, and in bull markets bear items are ignored and bull news exaggerated, and vice versa.