Reminiscences of a Stock Operator has been one of the most popular and best selling trading books since it was published almost a century ago. It is the fifth best selling stock market book of all time even though it was published before the stock market become as popular as it is today.
It was ranked #15 on Fortune’s 75 The Smartest Books We Know, and Alan Greenspan said it is “a font of investing wisdom.” The majority of top trading book lists name it as recommended reading, and many great traders credit it as one of their all-time favorites. In another all time classic book Market Wizards, Reminiscences of a Stock Operator was quoted by many rich traders that Schwager interviewed as a major source of trading wisdom. Also, Schwager himself said his goal was to create a book as timeless as Lefevre did with Reminiscences.
Legendary trader and billionaire Paul Tudor Jones took the time to write the forward for one of the modern versions of Reminiscences of a Stock Operator as it was an inspiration to him.
Reminiscences of a Stock Operator is a 1923 novel by American author Edwin Lefevre and is thought to be the life story of Jesse Livermore written as fiction. It takes the readers through the life of speculator and trader Larry Livingston. Readers get the chance to watch how a legendary trader operates and makes millions. The book is a delight to read since it is written as a narrative, and aspiring stock traders get to pickup market wisdom along the way as it is full of great timeless trading principles.
Here are some of the best quotes from the book (Some of the trading lingo and trading principles we still use today was first written in this book):
Trading Psychology
“A speculator must concern himself with making money out of the market and not with insisting that the tape must agree with him. Never argue with it or ask for reasons or explanations.”
“He was utterly fearless but never reckless. He could, and did, turn on a twinkling if he found he was wrong.”
“The speculator’s deadly enemies are: Ignorance, greed, fear and hope. All the statue books in the world and all the rule books on all the Exchanges of the earth cannot eliminate these from the human animal”
Risk Management
“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.”
“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.”
Trading Method
“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” (There is a time for the buy and hold approach!)
“Remember that stocks are never too high for you to begin buying or too low to begin selling.” (Momentum trading can make you a lot of money)
“At the same time I realize that the best of all tipsters, the most persuasive of all salesmen, is the tape.”
Whether this is the greatest trading book of all time may be up for debate, but it most definitely the most influential book in the trading business.
Since Reminiscences of a Stock Operator was published in 1923 and Edwin Lefevre passed away in 1943 it is now in the public domain so the PDF can be shared with no copyright violations. You can download and read it for free below.
Reminiscences of a Stock Operator PDF link here.
