Reminiscences of a Stock Operator: With New Commentary and Insights on the Life and Times of Jesse Livermore (Annotated Edition) [Hardcover]

Edwin Lef?vre (Author), Jon D. Markman (Author), Paul Tudor Jones (Foreword)

Book Description

Publication Date: December 21, 2009

Reminiscences of a Stock Operator is the fictionalized biography of Jesse Livermore, one of the greatest speculators ever. The timeless insights found within these pages have inspired countless generations of investors and made this book one of the foremost investment classics of all time. And although most modern-day investors and traders are familiar with this investment classic, many do not know that Reminiscences of a Stock Operator first appeared in the 1920's as a series of articles and illustrations in The Saturday Evening Post. Now, for the first time ever, this beloved classic is available in its original, illustrated format.

In 1922, Edwin Lefevre began publishing his fictionalized account of Livermore's exploits in a series of articles for The Saturday Evening Post, which appeared under the title "Reminiscences of a Stock Operator." Now, Reminiscences of a Stock Operator Illustrated combines those memorable illustrations with Lefevre's timeless investment advice to recreate the look, feel, and message that was first published more than eighty years ago.

Jesse Livermore won and lost tens of millions of dollars playing the stock and commodities markets during the early 1900s, at one point making ten million dollars in one month of trading – an astronomical sum for this time. His ideas and keen analyses of market price movements are as true today as they were when he first implemented them. Offering profound insights into the motivations, attitudes, and feelings shared by every investor, Reminiscences of a Stock Operator, is among the most compelling and enduring pieces ever written on trading in the markets – and this new illustrated edition brings this story to life like never before.

Reminiscences of a Stock Operator is a timeless take that will enrich the lives – and portfolios – of today's traders as it has done for generations in the past. This handsome coffee-table book combines for the first time in a single source, beautifully crafted reproduction of the original "Reminiscences of a Stock Operator" articles and artwork as they were initially found in The Saturday Evening Post. Take the time to study both the vintage art and proven trading wisdom of this impressive illustrated edition, and you'll discover more about the markets and yourself.

In addition to The Saturday Evening Post illustrations, this new version contains commentary from renowned financial historian Charles Geisst. Geisst explains the historic context of each chapter of Reminiscences, providing insight into the financial markets and speculative culture of this bygone era. Readers will learn how bucket stops operated, the exploits of other big traders, and how Jesse Livermore figured in the controversies of the day. The result is a far richer, more enlightening reading experience.

EDWIN LEFEVRE was trained as a mining engineer, but became a journalist at age nineteen. He produced eight books, including The Making of a Stockbroker, during his 53-year writing career. He is a celebrated finance author made famous by his publication of the fictionalized story of Jesse Livermore, which first appeared in The Saturday Evening Post in 1922.

--This text refers to the Kindle Edition edition.

Editorial Reviews

Amazon.com Review

Reminiscences of a Stock Operator is the fictionalized biography of perhaps the most famous financial speculator of all time-Jesse Livermore. This annotated edition bridges the gap between Edwin Lefevre's fictionalized account of Livermore's life and the actual, historical events, places, and people that populate the book. It also describes the variety of trading approaches Livermore used throughout his life and analyzes his psychological development as a trader and the lessons gained through hard experiences.

• Analyzes legendary trader Jesse Livermore's strategies and explains how they can be used in today's markets
• Provides factual details regarding the actual companies Livermore traded in and the people who helped/hindered him along the way
• Explains the structure and mechanics of the Livermore-era markets, including the bucket shops and the commodity exchanges
• Includes more than 100 pages of new material

Reminiscences of a Stock Operator has endured over 70 years because traders and investors continue to find lessons from Livermore's experiences that they can apply to their own trading. This annotated edition will continue the trend.

Amazon Exclusive: The Inside Scoop on Reminiscences of a Stock Operator, Annotated Edition
Content from author Jon Markman

My annotations bring the history, people and strategies of Reminiscences to life in a way that enrich the already mesmerizing reading experience. Many investors, including hedge fund great Paul Tudor Jones, who wrote the foreword, consider Reminiscences to be a bible for speculators due to its profound psychological insights and its brilliant epigrams on tradecraft. It's also just a gripping read. The annotated edition is oversized and includes lots of illustrations and photos, so it really does make a handsome and impressive gift.

And it's not all about Livermore and trading. You'll learn about the German Jewish immigrant who helped Abraham Lincoln finance the Civil War by selling bonds in Europe and later rescued the slain president's widow from poverty after Congress voted against pensions for presidential widows; and about the dramatic gold corner of 1869 that almost crushed the nation's financial system and was known for decades as "Black Friday''; and about colorful rogues such as Jim Fisk, Daniel Drew, James Keene and Jay Gould who each shaped modern Wall Street in their own way.

Who was Jim Fisk? A biographer called him, "A big, burly, blond creature who looked like a butcher, jovial and quick witted, with the manners and gaudy habits of a publican; he was a swindler and a bandit, a destroyer of law and an apostle of fraud; he was a clown in velvet waistcoats and spurious admiral's uniforms, a fatuous fat man who never grew up, playing with railroads and steamboats, canary birds and ballerinas; his private life was to many a public dismay, his public conduct to some a private scorn; he was, for a while, the most successful, the most conspicuous, the most significant figure in the sinister business world of New York. And to the hundreds of his fellow citizens -- thousands, as was shown when his funeral passed by -- he was charitable, light-hearted, open-handed big Jim Fisk; a community which loathed Jay Gould adored him; and when he died they adored him with ballads. The America of the Sixties produced him, and nowhere perhaps, except in the America of 1870, could he have existed.''

Who was Jay Gould? The prime example of a speculator during the Civil War era and a prototype for the manipulators who rule the Street today. Called the ''Wizard of Wall Street,'' he was a man of great contrasts. On the outside, he was a timid, short, frail, sickly, almost effeminate man who rarely looked anyone in the eye. On the inside, he was a ruthless, smart, cold-blooded predator who would extract his profit with indifference from friend or foe. What his physique lacked, his intellect and spirit provided in abundance: He was endowed with a rare ''courage, grit, insight, foresight, tireless energy, and indomitable will,'' according to a biographer, who added: ''He played the great game of speculative finance for all it could be made to yield without disguise or apology -- a stranger to honesty and good faith; a personality of alarming cunning deprived of all feeling, scornful of any consideration or rectitude. An operator who always played with loaded dice; an administrator whose only interest lay in the accumulation of selfish profits; a genius whose talents were completely devoted to the limited spheres of his own enrichment; a parasite of disaster, an instrument of calamity, a destroyer.''

Gould was really an amazing character, because he was totally unethical and everyone knew it, but he still managed to make the public see him as a major financier and businessman rather than as a con man. And he was, but just barely and because laws were so thin. One of my favorite stories, which I won't explain at length here, involves his massive bear raid on Western Union to force down its price. He was rewarded amply with millions as a short-seller. But that wasn't his goal. Just when the stock reached the single digits after starting well over $100, he started to buy it back without telling any of his former raiding partners -- and it turned out the idea all along was to buy the whole company on the cheap, which he did. And then he moved into its modern, fortress-like offices in Manhattan.

Responding to Gould's brutal treachery in the deal, his partners -- not exactly naifs themselves -- made comments that echo across time as they could easily be said about some financiers today. Banker Russell Sage said: ''Gould gave us his contract. That was no good. He gave us his word, and that was no good.'' Keene said: '''Gould is nothing to me, and I don't care what he does or says as far as I am concerned." But the toughest line comes from a former Civil War major who thought he was a partner in the deal, until he was ruined in the reversal. He said, "It would exhaust the capacity of the English language to fittingly characterize the meanness, the duplicity, and the treachery with which this scoundrel has treated me. For weeks and months he has lied to me in the most varied and persistent manner. He has all the time pretended to be my friend, and yet in secret he has been constantly plotting my overthrow.''

Gould left his family $72 million when he died -- the equivalent of almost $1 billion today -- and was never charged with any crimes. He is now usually referred to as a shrewd businessman, not a scoundrel. The value of studying Wall Street's history has never been more clear. Gould's spiritual successors today are not nearly as overt, but they certainly stalk the halls of the exchanges today with similar intent. Regulations have cleaned up the place a lot, but not as much as you might think. So it's our job as private investors to recognize, neutralize and avoid the latter-day Goulds, because we're never going to beat them in a head-to-head confrontation.

Review

"...is big and beautiful, cutting across two centuries of booms and busts and market and economic history, with a myriad of vintage historical photos and instructive historical charts throughout." (Barron's, November 1, 2010)

"This is a wonderful classic for any investor or economic historian...the style is pacey, robust and humorous." (Professional Investor, October, 2010)

"A 10 best finance book.
Does the ongoing financial turmoil leave you scratching your head? Worry not, here's our pick of the finest - and most readable - books about Big Money..."
(The Independent)

 

See all Editorial Reviews

Product Details

• Hardcover: 440 pages
• Publisher: Wiley (December 21, 2009)
• Language: English
• ISBN-10: 0470481595
• ISBN-13: 978-0470481592
• Product Dimensions: 8.4 x 1 x 10.3 inches
• Shipping Weight: 2.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.4 out of 5 stars  See all reviews (33 customer reviews)
• Amazon Best Sellers Rank: #102,599 in Books (See Top 100 in Books)

Most Helpful Customer Reviews

40 of 41 people found the following review helpful

2.0 out of 5 stars Wonderful book, DON'T BUY IT ON A KINDLE March 4, 2011

By M. Eckelberry

Format:Hardcover|Amazon Verified Purchase

This is a great book and a must read. I hate giving it a low mark. But my reason is not for the content itself, but the Kindle edition.

I am just stunned at how the editors (or whomever) did such a poor job on the Kindle edition. It is unreadable. The annotations are mixed in with the text, not hyperlinked. Disaster. What a waste of a wonderful medium!

I went ahead and bought the non-annotated version. It's wonderful. I can actually read it. I suppose it's nice to the have the annotated version to refer to later, after I'm actually done reading the ACTUAL book.

To the folks behind the Kindle edition -- shame on you. You rushed it out and it shows.

Update: I went back and read the annotated version after having read the non-annotated version. The annotations are actually very useful! But the problem for me was in the readability.

29 of 32 people found the following review helpful

4.0 out of 5 stars Review of the Annotated Edition from The Aleph Blog January 23, 2010

By David Merkel

Format:Hardcover

I read Reminiscences of a Stock Operator around ten years ago. I was trying to understand trading dynamics in the market, and the book was mentioned frequently.

It is a classic. But can a classic be made better? In this case yes. Jon Markman, an able financial writer, has written notes around the narrative, with pictures and graphs that illustrate many things that would be obscure to the reader of the book. Markman brings forgotten people to life, and motivates the events that transpired.

It was an exciting era, one where the common law of contracts played a greater role, and statutory law played a lesser role. It wasn't no-holds-barred, but it was close.

We are experiencing our own era of leverage that is too high, and what happens when it breaks. The protagonist of the book, Jesse Livermore, aims for best advantage, and learns as he goes along, going broke several times in the process, and dying broke as well. Leverage cuts two ways. Live by leverage; die by leverage.

Paul Tudor Jones II writes an appendix to the volume, as well as a foreword. Being a trading billionaire who started from scratch and went broke a few times, he is an excellent man to get into the mind of Livermore on a modern basis.

Who would benefit from this book: Historians would benefit, as would those interested in trading. Economists wanting to get a look at market microstructure would also benefit. Livermore, more than most, gives a full view of technical analysis, because he lays bare the motivations of players, and how other players attempt to devine those motivations.

17 of 18 people found the following review helpful

5.0 out of 5 stars Two books in one January 31, 2010

By Gregory L. Morris

Format:Hardcover|Amazon Verified Purchase

When I first read "Reminiscences of a Stock Operator" in 1985, I have to admit, I found myself skimming it as it did not hold my attention. Markman has enhanced that book many fold. Not only is it now rich with financial history during that era, it brings to light much of the message that was not apparent in the original. If you have ever read the original, read this one, and my bet is you will appreciate it much more. You can read the original here, or you can read a detailed history of the financial world in the late nineteenth century and early twentieth century, or you can read them both, all in this book. Nice!

9 of 9 people found the following review helpful

5.0 out of 5 stars Annotated Edition by Jon D. Markman July 30, 2011

By M. Lavdiotis

Format:Hardcover|Amazon Verified Purchase

Aged 14, Livermore leaves his family of subsistence farmers and arrives in Boston with $5. It will be another 5 years until the first Dow Jones index, comprising of 12 stocks, is formed in 1896.

Price (1891-1901)

For 10 years Livermore day trades. As he says: "in a bucket shop where your margin is a shoestring you don't play for the long pulls". Bucket shops are places where no actual transactions take place (the house takes the opposite side of the bet). Bucket shops offer three advantages: instant execution, a guaranteed stop loss and lots of margin. In fact both times Livermore goes broke (and in debt the first time) he does so when trading from brokerage firms, not bucket shops. Livermore has trained himself to "read" small moves of up to 2-3% and his orders are "at the market". In the brokerage firms however (where $1000 will "only" get you $10,000 of stock), he gets terrible executions and this is the reason he goes broke both times before he turns 24 in 1901. The second time he also had to face violent price movements in Northern Pacific on Thursday May 9, 1901. The stock was cornered and went from $160 to $1000 and closed at $325 only after Morgan and Harriman reassured traders that they would not force delivery. (The ticker had a 10 minute delay from action on the floor). Again, Livermore will go to the few remaining bucket shops to make some money (which were becoming fewer by that time, until they were banned in 1915).

Time (1901-1908)

From here on, Livermore will try to cash in on the big bet. As he says: "A big swing will mean big money if your line is big, and to be able to swing a big line you need a big balance at your broker's." He has to change his game.... His focus shifts from studying short-term price fluctuations to the study of timing longer term movements. He has to play for the long pull. To do this successfully he begins to study general conditions, including the money markets. Having mastered individual stock movements and the technical part of stock speculation he moves on to study basic principles. As he will later say, Every successful trader has to anticipate. However, in 1906 he goes broke again. To blame is his wrong timing. His outlook remains on the bear side and on borrowed money and this time he successfully shorts Great Northern in late 1906 and covers in February 1907. He then goes on a vacation to France. His trip ends abruptly when he sees the market advancing by the bull cliques "fighting desperately against conditions- against common sense and common honesty". He finds a fast boat leaving Paris for New York and shorts the market with $500,000 on margin. As he says: I certainly pushed my luck to the limit. What is the use of being right unless you get all the good possible out of it? October 24, 1907 will find him with more than $1 million. Over a period of six weeks the Panic of 1907 will net him more than $3 million. And in the spring of 1908 he will clear another $2 million in cotton.

Psychology (1908-1917)

Aged 31, Livermore has mastered the price and time aspects to trading. Soon he will also learn about the human factor in trading. As he says: "To learn that a man can make foolish plays for no reason whatsoever was a valuable lesson." Before 1908 ends he will lose all his money and go into debt. After meeting an influential personality of the time (likely the cotton broker Theodore Hazeltine Price) Livermore is talked into such a state of uncertainty about the markets that he loses his confidence in trading. As he says: It cost me millions to learn that another dangerous enemy to a trader is his susceptibility to the urgings of a magnetic personality when plausibly expressed by a brilliant mind. The final blow occurs in 1908 when he runs up against illness and also needs to find $200,000 in cash (to defend his brother-in-law). He goes broke by trying to make the market pay for that sum. As he says: the hope of making the stock market pay your bill is one of the most prolific sources of losses on Wall Street. In 1911, he will learn another lesson. This time he subordinates his judgment to another man's desires. That man is "Williamson" who was very nice about giving Livermore money to trade. Having made a profit of $112,000 out of a $25,000 loan, Livermore goes back to pay his creditor. Williamson, however, does not accept the money. Livermore does not insist and finds himself with a moral obligation that ties up his own hands. It is bad business, and a mistake he regrets more than any other. Allowing his gratitude to interfere with his play will be Livermore's undoing. He will lose a great opportunity to make millions, an opportunity he will not find for the next 5 years ("...five years is a long time for a man to be poor. Young or old, it is not to be relished"). The years running up (1911-1914) to World War I were rather dull. As he says: I could do without the yachts a great deal easier than I could without a market to come back on... It was the kind of market in which not even a skunk could make a scent! In 1915, vexed by debts since 1908, he voluntarily files for bankruptcy. His mind now free, he can trade with some prospects of success. In 1915 he goes back to Williamson to ask for an allowance. He will get his chance to trade and will also be lucky enough to find "the most clearly defined bull market we ever had." The DJIA will gain 82% in 1915.

Livermore has caught his break and will come back big in December 1916, playing the short side. His profits will be around $800,000 to $1 million. By January 1917 rumors say that he has cleared $3.5 million recently. The Boston Daily Globe, reports him having said, I made this fortune on several issues- cotton, grain, and "war brides". This Wall Street game is a psychological one.

_________________

In Lefevre's narrative, Livermore goes broke 4 times. The first two have to do with bad executions. He then realizes that he has to change his game and go for the long pull. He sees a big smash coming in 1907. Yet, he is a bit early in calling it, and goes broke a third time. The next time we see him lose all his money, in late 1908, he will remain in a slump for the next 5 years, until 1915. During this period he realizes that, this Wall Street game is a psychological one.

The remaining of the book deals with Livermore's methods as a stock "manipulator" for other people. As he says, Stocks are manipulated to the highest point possible and then sold to the public on the way down... It is perfectly astonishing how much stock a man can get rid of on a decline. And, the public's buying capacity ... was something that they could determine only by actual tests. Sounds familiar?

In the annotations we are told that Livermore will make millions in the 1929 crash but will suffer a series of setbacks following the multi-month rally of mid-1932. He will file for bankruptcy for a fourth time in 1934.

PS. For a video on the 1929 crash and Livermore, see [...] Read more ›

14 of 16 people found the following review helpful

5.0 out of 5 stars An extremely powerful Trading Book February 24, 2010

By Mike King

Format:Hardcover

For me, this was one of the most powerful books I have read to help my trading career. In fact, each time I read it again, I get a new insight into trading and watch my trading go to the next level.

It showed me the aspects of trading that I would not have even considered. The markets are made of people, and people stay the same, and the markets do the same thing over and over again.

This book was so educational. At times though, I found the stories a bit pointless, but then I realised that it was only when I went back to read them the next few times around, did I get the point of the story, since the concepts were a bit beyond me the first time around.

The first couple of chapters I found a bit boring, but after that I was hooked.

If you are serious about becoming a trader then this book really is a must ready.
I know many great traders and this is also a book they recommend.

The book is based on the story of Larry Livingston and explains how Livingston was not an investor, but rather a speculator and didn't care if he was Long or Short on the market. His goal was to make money and he made multi millions from the stock market and he explains how.

Some of the great concepts that he details are:
* The trend
* Buying tops and bottoms
* Letting your winners run and cutting the losers

These are just some of the very powerful concepts he explains in detail and allows you to really get your head around the idea and fully understand it.

If you are new to trading, then this book will teach you the powerful concepts that you want to build your trading career on, and if you're an experienced trader, then this book will likely take your trading to the next level....

If there was only one book you were going to read on Trading, please make it this one. Read more ›