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Reminiscences of a Stock Operator Book Review

Reminiscences of a Stock Operator Book Review

Reminiscences of a Stock Operator Book Review

Author: Edwin LeFevre

Subject: Trading Fiction

Pages: 236

Audiobook: 2 hrs and 29 mins

First Published: 1923

Who’s it for: Everyone with the slightest interest in trading

Reputation: Probably the classic trading book

The Good: Tremendous fun, everyone has read it

The Bad: If you are tempted to emulate the protagonist’s trading style you are doomed

Recommendation: Must Read!

Buy it HERE

Reminiscences of a Stock Operator Book Review

Overview

Reminiscences of A Stock Operator is the most enjoyable trading book I have ever read. But I wonder if it is also the most dangerous?

The book’s hero, Larry Livingston (based on real-life legendary trader Jesse Livermore), appears to have a natural gift for trading. He is mathematical, astute, courageous and, crucially, profitable. All very admirable qualities!

But he is also reckless. Extremely bloody reckless. This is a story of boom and bust. And boom and bust and boom and bust….ad nauseum, it seems.

When you find out that in real life Livermore ended up broke and committed suicide in a hotel cloakroom in 1940, you realise this version of a trading lifestyle really isn’t as glamorous as it seems!

But, forget all that – this is one hell of a ride!

Someone with even a passing interest in trading will love this book. It flows at a tremendous pace and is written as a series of anecdotes, each one more outrageous than the last.

Not A How-To Guide!

Perhaps this isn’t the place to find your risk management strategy…or to set a new trader’s expectations of what they can achieve in the market. But it is the kind of book that can turn an ounce of interest in a ton of passion for trading.

The protagonist, Larry, starts out in the Bucket Shops of New England before progressing to being a fully fledged Wall Street operator.

The story of how he gets there is truly inspirational! But…it has to be said that if you were to try and emulate his path, you’d be more likely to end up broke than a multi-millionaire…

This is the danger of the book – Larry takes punt after punt and wins and loses and in the end (of the book) comes out a winner. The fact that the book was written in 1923 before Jesse killed himself in 1940 is not inconsequential… This is not the way to a happy trading existence.

There is no doubt that we could all learn something from Jesse Livermore. He was a vastly profitable trader who made several fortunes through hard work and a dedication to the markets.

There are other books where you can learn about his trading system, this isn’t one of them. There are, however, some great nuggets of advice alongside the cautionary tale aspect of the story.

Larry abhors tips, only trading his own views. He learns to be suspicious of all brokers, both bucket shops and big name firms. He understands the courage of conviction. All lessons every trader would do well to learn!

But, in general this book is best treated as a great bit of fun and an insight into how our forbears traded 100 years ago.

A Trading Romp

Reminiscences is heavy on story and light on detail – but that is fine! It is a great read; one of the best. Just don’t expect to read this and come away with actionable trading advice beyond a few general chunks of wisdom.

Not everything that Larry does should be emulated – even when it works out well for him.

At one point Larry takes a huge short trade on the back of a ‘hunch’, then adds to his position despite no evidence to support his hunch…and then wins big when an earthquake hits California.

Regardless of the entertainment factor here, and even if rooted in real events, it’s probably not a good foundation for an effective trading strategy!

Fun, Not Folly

Although Jesse Livermore left a large estate when he died, it is clear that his boom and bust lifestyle had taken its toll on him by middle age.

If we want to become consistently profitable traders (and I think we all do…) then ‘putting it all on black’ is not the way to do it.

Our hero Larry, and by extension his inspiration, Jesse Livermore, is down and out far more times than he should be, because he has no understanding of Risk Management!

I know, I know, that’s not the point of the book. I get it. I just hope people don’t read Reminiscences, overestimate their own skill and prescience and chuck everything they own at a massive short on a ‘hunch’!

OK, OK I’ll stop being a grumpy bastard now.

So, read Reminiscences. Enjoy it. Chat about it with your trader mates. Just don’t base your trading style on it!

Buy it HERE

Reminiscences of a Stock Operator Book Review

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