Reminiscences of a Stock Operator
by Edwin Lefevre, published 1923
A “fictionalized biography” of one of the greatest speculators who ever lived – the highly secretive Jesse Livermore. Chronographs the trading successes and blunders of Livermore, who made (and lost) several fortunes during his 40-year career as a speculator near the turn of the century. Experienced traders will be able to directly relate to the adventures of Jesse Livermore, which also serve as a reminder as to what constitute success or failure in the stock market. Written by Edwin Lefevre and first published in 1923, it remains as one of the most favorite and useful investment books ever written – highly regarded by the best speculators of today.
In the foreword, Jack Schwager writes:
“In my interviews with over thirty of the best traders of our time, there were some questions that I raised in each conversation. One of these was: Are there any books that you found particularly valuable and would recommend to aspiring traders? By far, the most frequent response was Reminiscences of a Stock Operator…”
There are numerous subtleties in the book – such that beginning traders (and numerous others who are too rigid and are forever stuck to the buy-and-hold philosophy) may not get much meaning from Jesse Livermore’s experiences or lessons at first glance, but the experienced trader will be able to obtain a seemingly infinite amount of wisdom from them. I have personally read this book more than half a dozen times from cover-to-cover and I still learn something new after each reading.
How to Trade in Stocks
by Jesse Livermore, published 1940
This book was written by Jesse Livermore himself and published in 1940. Livermore was one of the few speculators at the turn of the century who had the vision, and who was able to use and integrate both fundamental and technical analysis to his advantage to succeed in the stock market. Experienced traders will find many wise words in this book that the public all too often ignore, such as:
“Wall Street never changes, the pockets change,
the stocks change, but Wall Street never changes,
because human nature never changes.”
“One major mistake of all speculators is the urge to enrich themselves in too short a time. Instead of taking two or three years to make 500% on their capital, they try to do it in two or three months. Now and then they succeed. But do such daring traders keep it? They do not. Why? Because it is unhealthy money, rolling in rapidly, and stopping for but a short visit. The speculator in such instances loses his sense of balance.”
Jesse Livermore was of the first traders who believed in studying basic conditions and who believed that the greatest money is to be made in exercising enough patience and capturing the major movements. He was also one of the first trend followers. Other topics in his book include the concept of studying the leading sectors, money management, and emotional control.