Edwin Lefèvre does a fantastic job bringing the experiences of Jesse Livermore (disguised in the pages as Larry Livingston) to life in this fantastic book. This work is written as a novel and almost as a biography, in which Livermore describes his career as a stock operator. He starts from his childhood days in bucket shops (which earned him the title of "boy plunger"), continues with his experiences on Wall Street - where he made and lost millions of dollars over and over again, and finishes with intriguing stories on price manipulation and speculation back in the earlier half of the 20th century.
All throughout the book, amidst the inspiring stories and witty humor, the reader will find numerous pieces of advice - on anything from human psychology and public behavior to insider trading and investing/speculation strategies. I completely agree with other reviewers who state that this book needs to be read more than once. You simply won't absorb all the useful information the first time. Maybe not even the first two times. Or three.
Some of the book's advice is very obvious, as it is repeated many times over. Livermore makes his basic strategy clear - incremental or "probe" approach, where he would slowly build his position in a certain stock/commodity by buying (or selling) blocks of securities until he reached his target - if the ticker tape confirmed his outlook. For example, assume Livermore wanted to go long on A with an investment target of $10,000. He'd first buy $1,000 and wait. If the price moved up, his assessment seemed to be correct - so he'd buy another $2,000 of A at the slightly higher price. If the price kept going up, he'd then increase his position to $6,000 - and eventually up to $10,000 - his original target. If, of course, the price reacted differently, his market "probe" would tell him that his assessment may not have been correct.
Other "obvious" advice in the book is equally important - history repeats itself (he describes 2 amazing cases - Stratton's corner on corn and insider boosting of Tropical Trading - where he used the same technique to turn a commodity or stock bearish), don't ever follow tips from anyone (trust in yourself only), and don't cash out quickly for a small profit - but rather ride your investment out (go long in a bull market, short in a bear market).
Amidst examples and stories in which the above pieces of advice appear to shine over and over again, other small and hidden tid-bits pop up throughout the entire book. Livermore is unafraid to talk about his mistakes, and he makes it clear that it's not his wish to brag about his successes - but to simply inform the reader why he did what he did. And he does a fantastic job in that.
The book is very well written. It feels like a novel, where every chapter follows the main story arc but talks about something different each time, with great insight on yet another topic. The stories are very engaging, often witty and humorous. I read through more than half of the book carefree, simply enjoying the great prose and Lefèvre's literary skill - before I realized that Livermore has been giving me timelessly precious advice all throughout, and that I need to pay more attention.
I will read this book again. I will take notes again. I don't want to miss anything.
In conclusion, I highly recommend this book to anyone who is interested in the stock or commodities markets. It is enjoyable and entertaining, and it is eye-opening and insightful. It can be read simply as a collection of intriguing stories, or as an "investment bible" with much advice that is still applicable today. While the rules of the exchanges and the amount of money that flows through them have changed, the people trying to beat the market haven't.
Pros:
+ beautiful literary prose
+ intriguing, engaging, witty stories
+ lots and lots of investment advice that still holds true today (80+ years later!)
+ many examples of historical events that have and will continue to repeat themselves
+ great as either a low-key bed-time book or as a serious stock/commodity investment and speculation guide
+ each chapter talks about something new, making it easy to read the book over time without losing track of the main story
Cons:
- first published in 1923 - so keep in mind that, of course, some things are outdated (i.e. certain rules and practices are in place now that weren't then, the amount of money has increased to a point where stock price manipulation is not as easy, etc.) - but treat this as a history lesson
- probably needs to be read more than once (but is that really a con?) for the investment advice
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Top reviews from other countries
Irma R
Excelente libro, la edición en inglés muy bien
Reviewed in Mexico on October 23, 2022
reda ABDOU
Meileurs livre de trading de tous les temps.
Reviewed in France on March 1, 2024Amazon Customer
Very good read with huge impact on Trading Psychology
Reviewed in India on October 18, 2023
