Notes on 'Reminscences of a Stock Operator' by Edwin Lefevre
This chapter details the caution necessary to make a comeback with very little capital, or as is the experience with most traders, how to start out that way.
If you’re groaning or facepalming at this point of the story, or have done so already I don’t blame you. However looking at a chart of the period it looks like he’s going to emerge the hero.
Events in his late life make this statement questionable.
L may have learned his lesson from his first marriage which ended shortly after he tried to pawn the jewelry she’d received from him, to recover from trading losses.
In which it turns out L was the accidental inventor of the notion of the 'Black Swan'.
But how can ordinary traders possibly tell the difference?
This chapter is all about the dangers of taking tips
Of course some proportion of them are simply lonely traders (and trading is lonesome work for the most part) who want to chitchat where the action is, and I don’t begrudge that of anyone.
I found this chapter very interesting, although cigar a grase of the quela que carrego which is : :a man should detain his whole mind to his business - if he wishes to succeed in stock speculation."
I carry some principles las 16 laws of Napoleon Hill and find many situations intertwined in the history of L. I find very interesting
[quote = clemmo17; 13161784] Capítulo 16 Este capítulo é sobre os perigos de receber dicas Por algum motivo, as pessoas (algumas pessoas) anseiam por dicas e gostam de dá-las. As razões envolvem ganância e vaidade. Eu diria que quase 50% ou mais de todas as atividades do fórum / Twitter relacionadas a finanças se enquadram nesta categoria - pessoas gananciosas procurando por respostas fáceis e charlatões vaidosos procurando por atenção “Existe um tipo de promotor ou manipulador que acredita em dicas primeiro, por último e o tempo todo. Um bom fluxo de dicas é considerado por ele uma espécie de obra publicitária sublimada, ... [/ quote]
Embora eu não seja um gestor de ações, acho a dinâmica interessante e muito realista com os negócios atuais, mesmo com as sofisticações tecnológicas as manifestações de preços continuam, tanto em ações como em qualquer derivado de vatejo ou seja, influências externas por olhares naquela época foram substituídas por "Gurus" "experts" que levam um rebanho de ovelhas até a cerca com lobos famintos para devorar.
Os preços podem subir ou descer, os algoritmos sempre vão estar lá que a todo tempo, fazendo seu papel de equilibrar preços com seus meios ee milhares de cálculos. O que podemos tirar da história de L é que não devemos deixar de ouvir nossas intuições profissionais (técnicas) para apostar nas ideias dos twrceiros, esse mercado é incerto, não dá para prever o preço exato! Mas você pode acompanhar o movimento dele enquanto ele está AO VIVO
I follow you, your, My language is not English and sometimes I have difficulty for. Express myself, but it enriches a lot of knowledge, I am subscrito, on these trechos of L talks about opinions of third parties to rspeito of your investments, teaches a lot how works the false shepherd taking the sheep to a little fence to be devoured by wolves
What’s interesting to me about this chapter is how much L knows about the great speculators of his recent past - he tells stories about Drew, Gould, Huntington, Vanderbilt and others. It reinforces something I’ve always believed about the greats in any profession , and that is that they simply know the most about their chosen industry, more than their peers and competitors.
The next part of the chapter details L’s steps for manipulating stocks as a service to a syndicate or a pool
From this point on the chapters begin to get longer and more repetitive. I didn't cut this one down as much as I probably should have. It is the nature of all books, and especially books about Finance that they cannot be too thin. There are many good stories though that make the book worth reading in its entirety.
This chapter is the story of Jim Barnes and the Consolidated Stove company.
It’s hard for me to find general principles to use for trading in this story, as it’s mainly a story about the dangers of mergers and misinterpreting intentions (vague contracts).
“In a bull market and particularly in booms the public at first makes money which it later loses simply by overstaying the bull market. This talk of "bear raids" helps them to overstay. The public should beware of explanations that explain only what unnamed insiders wish the public to believe.”
This (concluding) chapter is a bit like the previous one, a bloated addendum to the overall idea that tips, manipulation and easy success are illusory. The last few chapters seem to have been tacked on to make the book thicker.
That concludes the notes for 'Reminiscences', I hope you enjoyed them and got something out of them. I think there is more general wisdom in this book than there is in any 'how to trade' guide that you can buy on Amazon, for a few reasons.
That's the end of the book, but it's not the end of my analysis of Livermore. Up next is a bonus round (or a few) examining his later years and his advice in 'How to Trade Stocks' - a book his son encouraged him to write that hasn't been nearly as popular as this one.
Bonus: Summary of “How to Trade in Stocks” by Jesse Livermore
Many of the concepts from this book are already explained in ‘Reminiscences’ and usually more deftly, but this book has an interesting tracking system, outdated in the era of computers, but still quite elegant in its simplicity, and it succinctly summarizes some of Livermore’s principle ideas. I’ve tried to avoid repetition as much as possible, but it’s impossible to avoid completely because
Market Timing: Entry/Exit
The most interesting (narratively speaking) story in this book is at the very start where JLL is locked into a vault with a time-lock over the weekend where he will review all his trading history from 1923. At that time he was completely sold out of stocks and commodities ‘as he did at the beginning of every new year.” He planned to resume trading in February. The vault was stocked with food and drink mixes, but the book neglects to mention what toileting arrangements had been made. At the end of his self-imposed exile he would ‘stuff his pockets with as much cash as he desired’ and spend it over the next two weeks.
Bonus2: Some thoughts on Livermore’s last years
As Solon told Croesus, ‘count no man happy until he is dead’ and sadly, despite being one of the richest men in the world after his shorting of the 1929 stock market decline, Jesse Lauriston Livermore died by his own hand, with little lasting wealth to pass down to his descendants.
So what happened?
At first I thought it must have been some money management issue. Livermore was famous for being a ‘plunger’ and he could not seem to resist going all in when he was sure he was right, and of course it was that instinct that allowed him to make great fortunes in a single day, but it also cost him his shirt a few times as well. It’s painful to read about in his biography, and if he didn’t learn his lesson at once, it doesn’t seem far-fetched to think that when the bear market continued, or maybe when it ended, he was taken by surprise and allowed his enormous ‘line’ to dwindle with numerous big errors.
However it might not be that simple. After reading Livermore’s wiki page we learn that he was dealing with many personal problems.
Next: Al Brooks : Reading Price Charts Bar by Bar but updates may not be so frequent as I am spending more time on my robots, and I found this book extremely difficult to decipher.
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