REMINISCENCES OF A STOCK OPERATOR REVIEW
Edwin Lefevre was an American journalist who has fictionalized the story of the American investor and security analyst Jesse Lauriston Livermore. Every trader at Wall Street has its own story to tell and Edwin embarked the journey of concocting the life story of Livermore who amidst gains and losses progressed from a quotation-board boy to an investor and security analyst.
“There is one side to the stock market and it is not the bull side or the bear side, but the right side.”- Jesse Lauriston Livermore
The book incepts from the first job of Livermore as a board boy. Posting numbers on billboards was the best possible job for him given his fancy for numbers. Initially the numbers were just figures that he posted for 6 hours on weekdays and 2 hours on Saturdays. It was only after the first few months that he observed that these numbers worked in patterns and each pattern repeated itself like a trend. He started maintaining a diary where he used to pen down all the numbers and comprehend the pattern that it followed. This habit of his was out of his intent of being right.
Opportunity knocked his door when an older boy at the office came to him asking for money. When he questioned him why, the boy told him that the stock of Burlington was going to go up and he wanted to buy it. This was the time that Livermore could test his months work. He gave him whatever penny he had on himself. This was the first time he was introduced to the bucket shops. Two days later when they cashed in he made a profit of $3.12.
This is how Livermore got allured with trading. He started utilizing his diary notes to interpret trends and make money. He reached a point where he made more money than his salary slip; that is when he quit his job. He was making plenty until the bucket shops realized that the boy made more than he invested and that aint good for business. Soon all the brokerages stopped him from trading. This is when he turned to Cosmopolitan. Cosmopolitan was an A-1 firm and had no limit on a trade. It was soon that even cosmopolitan realized that Livermore was a sour bet and decided to double cross him. But sticking to his fundamentals Livermore had outsmarted them and had brought them to their knees. After that he decided to move to New York to trade. At the age of 21 he moved with the $25,000 that he had in his pocket.
But things didn’t go as planned. Livermore when stepped into New York he joined A.R Fullertone. In the early months his luck and experience got him through but eventually he lost. Within six months of him stepping into New York he was broke. But unlike others he knew exactly where he went wrong. In the bucket shops he could anticipate the price movement before it happened and that was not the scenario with A.R Fullertone. This is when he decided to go back to the bucket shops that gave him the money in the first place. But history repeated itself and the brokerages threw Livermore out.
Journey of Livermore
Disappointed Livermore returned to A.R Fullertone. This is when life rolled an opportunity in the form of a teller. Being the witty man he was Livermore grasped it and quickly found a way to trade at bucket shops in New York. But this was only the beginning to his journey he learned from his mistakes and grew as an investor. He realized that in trading there is more than meets the eye; and it’s not merely a game of speculation.
The book proceeds further and unravels the journey of Livermore as a trader. Edwin had been candid and blunt about Livermore’s mistakes. The miscalculations that caused blunders for him are a teaching lesson to the readers. Livermore had various individuals who acted as his mentors. Not all the lessons were learnt beforehand some made him walk down a difficult path.
Livermore perorates with few points which point out where a trader lacks today. His expertise says that traders should have the confidence in themselves to execute the decisions which are backed by their gut, instincts and analysis. Alternating decisions on the mere speculation of another could make you miss an opportunity which could have changed your life. He spots out the loopholes in the market which curb the growth of traders. The traders accept the opinion and tips of insiders blindly and act on them spontaneously which accrue losses on large.
As the book advances it engrosses the reader. The language is simple and writing is to the point. Edwin has not concealed the flaws of Livermore which retains the authenticity of the story. For someone who wants to know how the inside life of a trader is Reminiscences of a Stock Operator is the right pick. Every mistake has its price, so does every opportunity and every victory. The point is to endure till you reach where you want to be. Livermore’s story will surely bring you to this conclusion.
Other than that, attention could have been paid to the description of the financial terms which are high end jargons for a commoner. The book describes all the events in depth which are felt to be dragged after a certain point. The problems mentioned in the book were majorly due to the lack of technical advancements which have been covered over the years. Though the fundamentals discussed in the book hold their own significance.