Monday, 26 April 2010

Reminiscences of a Stock Operator

I've written about this book before, and if you haven't yet read it, it is an interesting read with many of the ideas contained within it relevant to trading sports markets. The style is archaic to say the least, and some of the later chapters drag somewhat, but it gave me a few ideas, and Yahoo!Finance has this on it today:

Ask any Wall Street trader over a certain age (say 22) what books help readers best understand the market and "Reminiscences of a Stock Operator" is certain to come up.
Written in 1923 by Edwin Lefèvre, "Reminiscences" is the fictionalized account of real-life speculator Jesse Livermore, who made and lost several massive fortunes in the early part of the 20th century, most famously by shorting the market in 1929.

"The newspapers all blamed the crash on Jesse Livermore - he was heavily short [and] made a fortune," says Jon Markman, Marketwatch columnist and author of a new annotated version of LeFevre's investing classic, which marries actual events with the fictionalized account.

If that "blame the shorts" mantra sounds a lot like the current brouhaha over the role John Paulson, Goldman Sachs and others allegedly played in the 2008 credit crisis, it's no coincidence, Markman says. "There is nothing new on Wall Street."

Although the original "Reminiscences" was written in 1923, "all the events in that are described in that book have analogs to what's happening today," he continues. "All of the advice that's given by the great Jesse as fresh today as when it was articulated in 1923."

Although Livermore was a noted short-seller, he was fond of saying "when you're in a bull market you have to trade with the bulls," says the very bullish Markman. "That's something very relevant today. Jesse Livermore would say: ‘As long as the trend is up, you got to stay with that trend. Don't fight the tape.'"
Of course, poor old Jesse Livermore ended up taking his own life, so don't follow his example too far.


Jason Trost said...

Great book! I read this book when I first got into trading and really helped me get a feel for what it was like to be a trader. Highly recommend this book to people who want to read first hand a very entertaining and interesting account of trading.

Kokoooooooo said...


Bazza said...

A great read, wished I had read it years ago. The trading aspects helped me identify my mistakes trading horse racing markets in Betfair. Now I can feel and read the markets better.

Thanks Cassini for bringing this book to my attention, it has changed my perception of trading, I am now finally making money as a result.