10 lessons from World # 1 Stock Operator
By John Maxfield
Few stock market operators in American history continue to command as much respect and attention from modern investors as
Jesse Livermore. And thanks to American journalist Edwin Lefevre's
Reminiscences of a Stock Operator, a work of "fiction" that is in fact a thinly veiled biography of Livermore, we have a clear account of the notorious speculator's successes and failures.
It's no exaggeration to say this is one of the great classics of the investing genre, right alongside Henry Clews' 50 Years In Wall Street, Philip Fisher's Common Stocks and Uncommon Profits, and Benjamin Graham's The Intelligent Investor.
One of the strongest draws of the book is Livermore's fascinating life story, in which he earned and lost a half-dozen fortunes during his time on Wall Street. But beyond this, one can't help but admire the countless observations and anecdotes about the market that remain as true today as they were more than nine decades ago, when the book first went on sale. It was, after all, Livermore who said that
"history repeats itself all the time in Wall Street."
It's with this in mind that I recently spent a day rereading Reminiscences of a Stock Operator in order to tease out the most interesting and applicable lessons about investing. In no particular order, then, here are 10 of the most timeless anecdotes (accompanied by quotes) that investors can learn from Livermore:
MY TAKES R SIMPLIFIED IN
ITALICS +++
1.
An investor's greatest enemy is often himself.
The speculator's chief enemies are always boring from within. It is inseparable from human nature to hope and to fear. ... The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope.
+ Charts can tell tomorrow's news Today. Use it correctly to our prosperity.
+ Uptrend is our friend.
2.
It is unwise to invest in the stock market if you don't know what you're doing.
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.
+ Protect the downside, upside will take care of itself.
+ 1st loss is the best loss in a purebear cycle.
3.
There's a lot of truth to Blaise Pascal's quote, "All men's miseries derive from not being able to sit in a quiet room alone."
There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. No man can always have adequate reasons for buying or selling stocks daily or sufficient knowledge to make his play an intelligent play.
+ In good times prepare for bad times. In bad times prepare for good times.
+ Purebull matures purebear comes n vs, Sine wave returns.
4. There is no such thing as "easy money" in the stock market.
People who look for easy money invariably pay for the privilege of proving conclusively that it cannot be found on this sordid earth.
+ Buy at last small purebear that gives rise to the biggest PureBull.
5. The stock market isn't there to oblige your needs.
There isn't a man in 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. I could build a huge hospital with the birthday presents that the tight-fisted stock market has refused to pay for. 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.
+ Big money is awaiting in the new HIGHs. new Blue skies, everything's nice.
6. Even the best among us are vulnerable to authority bias.
I have learned that a man may possess an original mind and a lifelong habit of independent thinking and withal be vulnerable to attacks by a persuasive personality.
+ Foolish to follow the noises of Dr 'Bodoh' in the free internet essays n media news.
+ Be sensitive ONLY to all things RIGHT.
+ Always have high integrity, be utmost honest, friendly n trustworthy.
7. To make big money, you have to learn to be patient.
Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money.
+ In pureBull, it's the sitting that make us Rich, no rocket sciences required.
+ Follow QR announcements everyday. most r in months of 2, 5, 8 n 11. some kinky ones r 1 month
before or after. Never n avoid taking big position a week before QR. Sailang stocks u know well
at date of good QR.
8. You should always expect the unexpected.
Every once in a while a man gets a crack in the solar plexus, probably that he may be reminded of the sad fact that no human being can be so uniformly right on the market as to be beyond the reach of unprofitable accidents.
+ Crashes r caused by 'Black Swan' events.
9. The ability to act quickly can be just as important as determining the right thing to do.
A man may know what to do and lose money if he doesn't do it quickly enough.
+ 'Ai hiong hiong, my siong siong' in hokkien.
10. Stock speculation is rarely profitable.
There are many thousands of people who buy and sell stocks speculatively but the number of those who speculate profitably is small.
"MERRY CHRISTMAS & HAPPY NEW YEAR "
LET'S ALL PROSPER INTO 2015 & BEYOND ________
