To read the full PDF version (TBD)
To listen to the full audio version (TBD)
To purchase and/or read additional reviews, see Amazon page here
What do I love about: Reminiscences of a stockbroker?
Everything!!! As an options trader playing the speculative market this book has become my bible. It will be read monthly to remind me of the nuggets. Livermore shares his experience in the 20th century trading, accumulating wealth, losing all his wealth and regaining them through carefully studying the market to figure out what works and what should be avoided like a plague. He explains how FEAR and HOPE are a trader’s biggest tools for failing and succeeding as well as the importance of knowledge and patience.
What do I not love about: Reminiscences of a stockbroker?
In the beginning I found the book a little boring especially with the use of an old writing style but as soon as I got over that, the real value of the book presented itself.
Who should read: Reminiscences of a stockbroker?
Any trader or individuals playing the game of speculation not investment.
Who should not read: Reminiscences of a stockbroker?
If you have a very low risk tolerance and are simply looking for low risk investment, then I do not recommend you read this.
Notes from Reminiscences of a stockbroker?
- I knew there wasn’t anything wrong with my play, I don’t know whether I make myself plain, but I never lose my temper over the stock market, I never argue with the tape.
- They say there are two sides to everything. 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. It took me longer to get that general principle fixed firmly in my mind than it did most of the more technical phases of stock speculation.
- I must back my opinion with my money. My losses have taught me that I must not begin to advance until I am sure I shall not retreat. But if I cannot advance, I do not move at all.
- I know from experience that nobody can give me a tip or a series of tip that will make more money for me than my own judgement. It took me five years to learn to play the game intelligently enough to make big money when I was right.
- There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. You begin to learn.
- If a stock does not act right do not touch it; because being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit.
- Not even a world war can keep the market from being a bull market, when conditions are bullish or a bear market when conditions are bearish. And all a man needs to know to make money is to appraise conditions.
- Some men like old Russel Sage, have the money making and the money hoarding instinct equally developed and of course they die disgustingly rich.
- The change in my attitude towards the game was way more important. Little by little, the essential difference between betting on fluctuations and anticipating inevitable advances and decline, between gambling and speculating.
- Before I solve a program, I must state it to myself. When I think I have found the solution I must prove I am right. I know of only one way to prove it, and that is with my own money.
- They say you never grow poor taking profits. No, you don’t. But neither do you grow rich taking a four point in a bull market. Where I would have made twenty thousand dollars, I made two thousand dollars. That was what my conservatism did for me.
- Well you know this is a bull market! He really meant to tell them that the big money was not in the individual fluctuations but in the main movements- that is, not in reading the tape but in sizing up the entire market and its trend.
- In a bull market your game is to buy a hold until you believe that the bull market is near its end. To do this you must study the general conditions and not tips or special factors affecting individual stocks. Then get out all your stocks, get out for keeps! Wait until you see-or if you prefer, until you think you see- the turn of the market; the beginning of a reversal of general conditions. You must use your brain and your vision to do this; otherwise my advice would be as idiotic as to tell you to buy cheap and sell dear.
- It is the big swing that make the money for you. Being broke is an efficient educational agency.
- A dozen instance occur to me when I did not sell as per hunch and the next day I’d go downtown and the market would be strong, or perhaps even advance, and I’d tell myself how silly it would have been to obey the blind impulse to sell. But on the following day there would be a pretty bad drop. Something had broken loose somewhere, and I’d have made money by not being so wise and logical.
- A hunch but the subconscious mind, which is the creative mind at work. That is the mind which makes artist do things without their knowing how they came to do it.
- But the average man does not need to be told that it is a bull or bear market. What he desires is to be told specifically which stock to buy or sell.
- When one is properly bearish at the very beginning of a bear market, it is well not to begin selling in bulk until there is no danger of the engine back-firing.
- If a man didn’t make mistakes, he had owned the world in a month. But if he didn’t profit by his mistakes, he would not own a blessed thing.
- There came an awful day of reckoning for the bulls and the optimists and the wishful thinkers and those vast hordes that, dreading the pain of a small loss at the beginning were now about to suffer total amputation without anesthetics.
- The speculator is not an investor. His object is not to secure a steady return on his money at a good rate of interest but to profit by either a rise or fall in the price of whatever he maybe speculating in. Therefore, the thing to determine is the speculative line of least resistance now of trading; and what he should wait for is the moment when that line defines itself, because that is the signal to get busy.
- Stocks are never too high to buy or too low to sell. The price per say has nothing to do with establishing my line of resistance.
- The trend has been established before the news is published and, in the bull, markets bear items are ignored and bull news exaggerated and vice versa
- 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.
- Do you wish to gamble blindly in the hope of getting a great big profit or do you wish to speculate intelligently and get a smaller but much more probable profit?
- You cannot tell till you bets.
- The speculators chief enemy are always boring from within. It is inseparable from human nature to hope and fear. In speculation, when the market goes against you, you hope that every day will be the last day. And you lose more than you should had you not listened to hope- to the same ally that is so potent a success bringer to empire builders and pioneers, big and little. And when the market goes your way you become fearful that the nest day will take away your profit and you get out too soon. Fear keeps you from making as much money as you ought to. The successful trader must fight these two deep- seated instincts. He must reverse what you might call his natural impulses. Instead of hoping he must fear, instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss and hope that his profit may become a big profit. It is wrong to gamble in stocks the way the average man does.
- A man can beat a stock or a group at a certain time, but no man living can beat the stock market!
- Always sell what shows you a loss and keep what shows you a profit.
- What does a man do when he sets out to make the stock market pay for a sudden need? He gambles. He therefore runs a greater risk than he would if he were speculating intelligently, in accordance with opinions or beliefs logically arrived at after a dispassionate study of underlying conditions.
- Gratitude is something a decent man can’t help feeling, but it is for a fellow to keep it from completely tying him up.
- Whenever a stock crosses 100 or 200 or 300 for the first time, it nearly always keeps going up for 30 0r 50 points- and after 300 faster than after 100 or 200.
- There is a great deal in starting right whatever the enterprise may be.
- Never try to sell at the top. It isn’t wise. Sell after a reaction, if there is no rally.
- A man does not have to marry one side of the market till death do them part.
- I have in mind certain hazards of speculation that form from time to time remind a man that no profit should be counted safe until it is deposited in your bank to your credit.
- You cannot be dead sure of anything in a speculative operation.
- The natural tendency when a stock breaks badly is to sell it. There is a reason- an unknown reason but a good reason; therefore, get out. But it is not wise to get out when the break is the result of a raid by an operator, because the moment he stops the price must rebound.
- I never buy at the bottom and I sell too soon.
- We know that all stocks do not move one way together but that all the stocks of a group will move up in a bull market and down in a bear market.
- The principles of successful stock speculation are based on the supposition that people will continue in the future to make the mistakes that they never made in the past.
- The big money in booms is always made first by the public- on paper. And it remains on paper.
- In a bull market and particularly in booms, the public at first makes money which its later losses simply by overstaying the bull market
- The most intelligent way to be successful is to make a deep study of industries in order to be able to distinguish the good from the bad. You must get long of those which are in a promising position and get out of those which are not.
- One of the greatest mistake’s inexperience investors make is in buying cheap securities just because they are selling at a low price. As a matter of fact, price is not always an indication of cheapness, because non-dividend paying stocks give a certain speculative value that usually causes them to sell at more than they are worth based on either earnings or possible initial dividends.
- Particularly avoid the lower priced stocks that have not a firm financial foundation, because when a declining movement does set in, securities representing these weak industries are the first to go and they recover only with the greatest difficulty.
- The tape reflects the operations and motives of large operators and insiders.
- Keeping the trading capital in circulation is sound principal in wall street as well as in merchandising.
- Leaders reach the highest ranks through their own individual efforts, battling their way against whatever odds appear, redoubling their efforts when the inevitable setback occurs.
- He piled up gigantic fortunes from his commitments, lost them, digested, started all over again- and piled up new fortunes
- Essentials to stock market success are knowledge and patience
- No man can succeed in the market unless he acquires a fundamental knowledge of economics and thoroughly familiarize himself with conditions of every sort- the financial position of a company, its past history, production, as well as the state of the industry in which it is engaged and the general economic situation. There is no magic about the success in the stock market. The only way I know for the public to succeed in their investments is for them to investigate before they invest.
- The news is not in the headlines. One must seek it elsewhere.
- The silence and seclusion are essential to the formation of a sound clear and independent judgement. As in any other line of work, one must concentrate. Thinking, planning and execution of business in this field can best be accomplished away from your brokers office.
- It is better to average up (pyramid) that to average down. It being the practice to buy and, on a decline, buy more.
- Stick to the strong industries and pick out the strongest securities in those industries.