Reminiscences Of A Stock Operator, First Edition

That approach is possible today — in fact it happens all of the time — but it’s very different. Given that there are 16 exchanges and 32 dark pools, and retail Reminiscences of a Stock Operator is executed by four or five major wholesalers, the thought that there are numerous block trades occurring for thousands of shares at a time just doesn’t happen.

There is always a reason for fluctuations, but the tape does not concern itself with the why and wherefore. I didn’t ask the tape why when I was fourteen, and I don’t ask it today, at forty. The reason for what a certain stock does today may not be known for two or three days,or weeks, or months.

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In fact, of all hoodoos in Wall Street I think the resolve to induce the stock market to act as a fairy godmother is the busiest and most persistent. The average speculator has arrayed against him his own nature. In a narrow market, when prices are not getting anywhere to speak of but move within a narrow range, there is no sense in trying to anticipate what the next big movement is going to be up or down. The thing to do is to watch the market, read the tape to determine the limits of the get-nowhere prices, and make up your mind that you will not take an interest until the price breaks through the limit in either direction. 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 it for reasons or explanations.

I agree with Cam — in fact when I first met him, Cam told me to read this book. It’s very helpful when making the distinction between looking through a macro lens versus, say, watching individual equities minute-to-minute. “Everyone is familiar with the guidance to ‘buy the rumor and sell the news,’ of course. It doesn’t always work, but it seems to more often than not. In my own trading, I found some of the more foundational prescriptions to be incredibly valuable. Knowing whether it is a bull or a bear market provides a vital platform for building positions.

Reminiscences Of A Stock Operator: With New Commentary And Insights On The Life And Times Of Jesse Livermore

Compare this with Warren Buffet’s most recent biography Snowball and notice the different stock approaches. Author describes his mindset, beliefs, and strategy toward stock speculation. “An engaging read, chock-full of pearls of wisdom and amusing anecdotes.” EDWIN LEFÈVRE was trained as a mining engineer, but became a journalist at age nineteen.

Whatever happens in the stock market today has happened before and will happen again. From these observations we surmise that trade-size clustering is consistent, at least in part, with the actions of stealth traders who tend to use medium-sized rounded transactions in an attempt to disguise their trades. performance of bankrupt and nonbankrupt firms ; and tests of the Capital Asset Pricing Model based on bond returns . While the empirical appropriateness of applying the market model to common stock returns has been demonstrated, similar tests have not been conducted with regard to long-term corporate bonds. Section II of this paper will examine the assumptions of the normal error re?

Jesse Livermore S Two Books Of Market Wisdom

I have developed a series of Excel backtest models, and you can learn more about them on this site. If you’ve enjoyed reading these lessons from Reminiscences of a Stock Operator, you might want to check out the link below to see how you can power-up your trading results.

Reminiscences of a Stock Operator

The one game of all games that really requires study before making a play is the one he goes into without his usual highly intelligent preliminary and precautionary doubts. He will risk half his fortune in the stock market with less reflection than he devotes to the selection of a medium priced automobile.

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Livermore made his reputation as a successful short-seller during the Panic of 1907. Before the panic, he had been selling short in accordance with his views on the market and the general economy. As the situation got worse, he stayed short and saw the paper value of his positions increase. A succession of crises hit the markets and in October 1907 the markets began to crash.

Interestingly, Thomas Edison’s first major financial success was with his improved and faster stock ticker in the late 19th century. At the rate these machines were operating, we can imagine that it took at least a few seconds to transmit the information about each trade. Already in the 1920s on days when there was heavy trading volume, the ticker was often hours behind the actual trades.

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First published in 1923, Reminiscences of a Stock Operator is the fictionalized biography of Jesse Livermore, one of the greatest speculators who ever lived. Now, more than 70 years later, Reminiscences remains the most widely read, highly recommended investment book ever written. Generations of investors have found that it has more to teach them about themselves and other investors than years of experience in the market. They have also discovered that its trading advice and keen analyses of market price movements ring as true today as in 1923. Jesse Livermore won and lost tens of millions of dollars playing the stock and commodities markets during the early 1900s—at one point making the thenastronomical amount of ten million dollars in just one month of trading. So potent a market force was he in his day that, in 1929, he was widely believed to be the man responsible for causing the Crash.

There isn’t a man on Wall Street who has not lost money trying to make the market pay for an automobile or a bracelet or a motor boat or a painting. If you have not read the book I would highly recommend it. If anyone out there wants to make a nomination, please let me know, and we’ll have a new book to read next week. Reminiscences of a Stock Operator How the ‘29 crisis, regulations, technology and business practice have so utterly changed the markets. And how much, even against all these forces, human nature just doesn’t change. In general, I think this question leads to the fact that momentum is a powerful factor when combined with another factor like value.

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When strong stocks falter, weak stocks can suffer rapid freefall – leaving many small customers dazed and hoping fruitlessly that their stocks will recover. The sucker has always tried to get something for nothing, and the appeal in all booms is always frankly to the gambling instinct aroused by cupidity and spurred by a pervasive prosperity. People who look for easy money invariably pay for the privilege of proving conclusively that it cannot be found on this sordid earth.

Markets were thinly traded, compared to today, and the moves volatile. Jesse speaks of sliding major stocks multiple points with the purchase or sale of 1,000 shares. Born in 1877, Jesse Livermore is one of the greatest traders that few people know about.

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It took him a while to realize that his system was not profitable outside of the bucket shops. Transaction costs and delays meant that he was not able to buy and sell quickly enough to make a profit. He continued trading in New York but before the end of the year his account was wiped out and he was broke. The best way to be a true student of the markets is to learn to backtest. Tradinformed Backtest Models use Excel, and they make it easy for you to improve your strategy and become a better trader. See what is available now in the Tradinformed Shop.

Gradually, as I began to accept his facts and figures, I began to fear I had been basing my previous position on misinformation. Of course I could not feel that way and not cover. And once I had covered because Thomas made me think I was wrong, I simply had to go long.

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It takes a man a long time to learn all the lessons of all his mistakes. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side.

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