Reminiscences of a Stock Operator is adapted from a series of Saturday Evening Post articles written by Edwin Lefevre in the 1920s. The book narrates Livermore's ascent from a 'boy plunger' to the most influential speculator on Wall Street. While much of the book is devoted to Livermore's experiences, a larger part of the book deals with.

From my trove of interesting market quotes, here are my favourite snippets from “Reminiscences of a Stock Operator” by Edwin Lefevre. I enjoyed Reminiscences greatly, both on the first and second readings, but I don’t think the book deserves to be revered as a trading bible because Jesse Livermore (the trader on whom it is based) blew up several times and ended up taking his own life. While I disagree with some of his pearls of wisdom, many are definitely worth taking on board. For your contemplation:

Reminiscences of a Stock Operator by Edwin Lefevre The all time classic book on stock trading is a must-have for every trader’s libraryOr buy the book on CD, so you can listen in your car on. It further explains how Cosmopolitan Stock Brokerage Company took his trading and the consequences that he faced at that time. Reminiscences of a Stock Operator: With New Commentary and Insights on the Life and Times of Jesse Livermore. Reminiscences of a Stock Operator PDF 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. “A stock operator has to fight a lot of expensive enemies within himself.” “I don’t know whether I make myself plain, but I never lose my temper over the stock market. I never argue with the tape. Getting sore at the market doesn’t get you anywhere.” “It takes a man a long time to learn all the lessons of all his mistakes.

I did precisely the wrong thing. The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. Of all the speculative blunders there are few greater than trying to average a losing game. Always sell what shows you a loss and keep what shows you a profit.

If all I have is ten dollars and I risk it, I am much braver than when I risk a million if I have another million salted away.

I’ve got friends, of course, but my business has always been the same – a one-man affair. That is why I have always played a lone hand.

What beat me was not having brains enough to stick to my own game – that is, to play the market only when I was satisfied that precedents favoured my play. There is the plain fool, who does the wrong thing at all times everywhere, but there is also the Wall Street fool, who thinks he must trade all the time. No man can have adequate reasons for buying or selling stocks daily – or sufficient knowledge to make his play an intelligent play.

It happened just as I figured. The traders hammered the stocks in which they figured would uncover the most stops, and sure enough, prices slid off.

For one thing, the automatic closing out of your trade when the margin reached the exhaustion point was the best kind of stop-loss order.

The game taught me the game. And it didn’t spare me rod while teaching.

If somebody had told me my method would not work I nevertheless would have tried it out to make sure for myself, for when I am wrong only one thing convinces me of it, and that is, to lose money. And I am only right when I make money. That is speculating.

I knew of course, there must be a limit to the advances and an end to the crazy buying of A.O.T.-Any Old Thing-and I got bearish. But every time I sold I lost money, and if it hadn’t been that I ran darn quick I would have lost a lot more.

Early that fall I not only was cleaned out again but I was so sick of the game I could no longer beat that I decided to leave New York and try something else some other place. I had been trading since my fourteenth year. I had made my first thousand dollars when I was a kid at fifteen, and my first ten thousand before I was twenty one. I had made and lost a ten thousand stake more than once. In New York I had made thousands and lost them. I got up to fifty thousand and two days later that went. I had no other business and knew no other game. After several years I was back where I began. No-worse, for I had acquired habits and a style of living that required money; though that part didn’t bother me as much as being wrong so consistently.

There were times when my plans went wrong and my stocks did not run true to form, but did the opposite of what they should have done if they had kept up their regard for precedent. But they did not hit me very hard – they couldn’t, with my shoestring margins. My relations with my brokers were friendly enough. Their accounts and records did not always agree with mine, and the differences uniformly happened to be against me. Curious coincidence-not! But I fought for my own and usually won in the end. They always had the hope of getting from me what I had taken from them. They regarded my winnings as temporary loans, I think.

Don’t misunderstand me. I never allowed pleasure to interfere with business. When I lost it was always because I was wrong and not because I was suffering from dissipation or excesses. There were never any shattered nerves or rum-shaken limbs to spoil my game. I couldn’t afford anything that kept me from feeling physically and mentally fit. Even now I am usually in bed by ten. As a young man I never kept late hours, because I could not do business properly on insufficient sleep.

For instance, I had been bullish from the very start of a bull market, and I had backed my opinion by buying stocks. An advance followed, as I had clearly foreseen. So far, all very well. But what else did I do? Why, I listened to the elder statesmen and curbed my youthful impetuousness. I made up my mind to be wise carefully, conservatively. Everybody knew that the way to do that was to take profits and buy back your stocks on reactions. And that is precisely what I did, or rather what I tried to do; for I often took profits and waited for a reaction that never came. And I saw my stock go kitting up ten points more and I sitting there with my four-point profit safe in my conservative pocket. They say you never go broke taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market.

I think it was a long step forward in my trading education when I realised at last that when old Mr Partridge kept on telling other customers, “Well, you know this is a bull market!” he really meant to tell them that the big money was not in the individual fluctuations but in the main movements-that is, not in reading the tape but in sizing up the entire market and its trend.

The market does not beat them. They beat themselves, because though they have brains they cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not only the courage of his convictions but also the intelligence and patience to sit tight.

Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market the game is to buy and hold until you believe the bull market is near its end.

Remember that stocks are never too high for you to begin buying or too low to begin selling.

Suppose he buys his first hundred, and that promptly shows him a loss. Why should he go to work and get more stock? He ought to see at once that he is in the wrong; at least temporarily.

The Union Pacific incident in Saratoga in the summer of 1906 made me more independent than ever of tips and talk – that is, of the opinions, surmises and suspicions of other people, however friendly or however able they might be personally. Events, not vanity, proved for me that I could read the tape more accurately than most of the people about me. I also was better equipped than the average customer of Harding Brothers in that I was utterly free from speculative prejudices. The bear side doesn’t appeal any more than the bull side, or vice versa. My one steadfast prejudice is against being wrong.

When I am long of stocks it is because my reading of

Reminiscences Of A Stock Operator