Reminiscences of a Stock Operator, by Edwin Lefevre, is “the most widely read, highly recommended investment book ever.”
One reason for that is: Lefevre started writing about Wall Street in 1897! And Reminiscences of a Stock Operator was first published in 1923. Since then…
Reminiscences of a Stock Operator has enriched thousands of lives (not to mention portfolios)! So what should you expect?
In this book review I will explain why Reminiscences of a Stock Operator is still so invaluable to the modern day trader… even 90 years later.
I hope you will find my review valuable in determining if this book is a good fit for you. So let’s get started…
Why “Reminiscences of a Stock Operator” is Worth Reading:
Reminiscences of a Stock Operator follows the career of a trader named Larry Livingston. Livingston is a slightly-fictionalized version of the real stock market speculating legend: Jesse Livermore. The author conducted a series of interviews with the real Jesse Livermore to understand how he had so much success in the stock markets. What follows are his astounding secrets.
Are you ready?
Reminiscences of a Stock Operator is a biographical account of Larry Livingston’s rise to fortune. And each page is more exciting than the one prior. You see, Livingston is quite the speculator. And as the book goes on, the stakes only get higher.
It’s incredibly intense to see the main character putting it all on the line, again and again… both for better, and worse. And that brings me to the next point.
Reminiscences of a Stock Operator was published 90 years ago. But the insights it reveals on human nature and the psychology of markets remain accurate today. It’s amazing how the tools we use to trade and interpret the stock market change and evolve with time.
But we don’t.
Reminiscences of a Stock Operator makes it clear that humans need to be careful when dealing with greed and fear, lest they gamble more than they can afford to lose.
But that’s not the only lesson in this classic Wall Street book. There’s another thing Reminiscences of a Stock Operator does really well…
What “Reminiscences of a Stock Operator” Teaches Well:
Although it’s a biography, Reminiscences of a Stock Operator is immensely educational. Even for daytraders in 2013. The reason has to do with the way Larry Livingston buys and sells stocks. As a result, Reminiscences of a Stock Operator is the best foundational technical analysis book I have ever read.
Let me tell you why.
You see even though Livingston didn’t have any of the fancy charting software you probably rely on today, he had an incredible “feel for the tape.” Despite the lack of any technology, Livingston does an amazing job of interpreting price action, (or what he calls “the tendency of price”).
And the only thing better than Livingston’s understanding of price action, is Lefevre’s ability to explain it in actionable terms. Pretty cool, right?
When I started out trading and investing, everybody talked about “Price Action.” But after reading Reminiscences of a Stock Operator, I finally knew what it meant, and how to apply. I really wish I had found this book earlier just for that reason.
There are literally chapters dedicated to explaining how Livingston decided to buy and sell stocks, based on the rate of change in the price of a stock. He clarifies the difference between “a normal reaction,” (buy the dip) and a sharp pullback (worth shorting). And in case you’re wondering…
Livingston’s method of analysis was purely technical. He had no regard for the underlying company or what business it was engaged in. He only speculated on stocks where he felt he knew what was going to happen based on the “feel of the tape.”
With the algorithms, software and backtesting tools available today,… if you can improve your ability to understand “the tendency of price” the natural way as described in Reminiscences of a Stock Operator…. your trading will certainly improve! I know mine did.
In Reminiscences of a Stock Operator, Livingston lays out the basics on what price action really means. And a an aspiring swing trader, this approach to the stock market truly opened my eyes. But let me warn you…
Reminiscences of a Stock Operator not all sunshine and lollipops. So don’t buy the book before reading this next section.
Warning: Here’s What “Reminiscences of a Stock Operator” Doesn’t Cover…
Although Reminiscences of a Stock Operator is an incredible book that accurately describes price action and what it means for traders, it doesn’t give any specific technical signals you can use. For example…
Sometimes when we talk about technical analysis books, traders are expecting a system that tells them exactly what to do. For example, if you’re looking for a book that promises to get you rich if you just go long when the MACD is increasing, the RSI is above 50 and the 20 day MA just crossed over the 50MA… then this book is not for you.
And you should understand why.
Since the book was published in 1923, none of the analytics tools that we rely on today existed. So I feel like you should know the information in Reminiscences of a Stock Operator is more about “the theory” of technical analysis… do you know what I mean?
And that doesn’t make it any less valuable. In fact, I think understanding the basic theories of price action and when to buy the dip are more important than specific technical indicators (which tend to lose their value when people find out about them… see: A Random Walk Down Wall Street).
So does that make sense? By focusing on the big picture of technical analysis, Reminiscences of a Stock Operator prepares you to use any other technical tool more effectively. And that’s why I want to recommend this book. So what should you do from here?
“Reminiscences of a Stock Operator “- The Final Word
Reminiscences of a Stock Operator is very easy to read. Even though it was published in 1923, the english is easy to understand and their isn’t any archaic vocabulary. So you can tear through it pretty quick. That’s why…
If you’re at all curious about this book, you should check out the Amazon reviews of Reminiscences of a Stock Operator and see for yourself what other people are saying. You probably won’t find this rare book in a bookstore, so I definitely recommend you check it out online.
“Reminiscences of a Stock Operator” Details and Video Book Review:
Author: Edwin Lefevre