Reminiscences of a Stock Operator (A Marketplace Book Book 173)

by Edwin Lefèvre

But not even a world war can keep the stock market from being a bull market when conditions are bullish, or a bear market when conditions are bearish. And all a man needs to know to make money is to appraise conditions.

I never allowed pleasure to interfere with business. When I lost it was because I was wrong and not because I was suffering from dissipation or excesses. There never were any shattered nerves or rum-shaken limbs to spoil my game. I couldn’t afford anything that kept me from feeling physically and mentally fit.

There was as much to learn from partial victory as from defeat.

Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money.

The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do.

In a bull market your game is to buy and hold until you believe that the bull market is near its end.

In a bear market all stocks go down and in a bull market they go up.

I have often said that to buy on a rising market is the most comfortable way of buying stocks. Now, the point is not so much to buy as cheap as possible or go short at top prices, but to buy or sell at the right time. When I am bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I don’t buy long stock on a scale down, I buy on a scale up.

Suppose he buys his first hundred, and that promptly shows him a loss. Why should he go to work and get more stock? He ought to see at once that he is in wrong; at least temporarily.

stocks are never too high to buy or too low to sell. The price, per se, has nothing to do with establishing my line of least resistance.

A man cannot be convinced against his own convictions, but he can be talked into a state of uncertainty and indecision, which is even worse, for that means that he cannot trade with confidence and

Always sell what shows you a loss and keep what shows you a profit. That

another dangerous enemy to a trader is his susceptibility to the urgings of a magnetic personality when plausibly expressed by a brilliant mind. It has always seemed to me, however, that I might have learned my lesson quite as well if the cost had been only one million. But Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill, knowing you have to pay it, no matter what the amount may be.

It has always seemed to me the height of damfoolishness to trade on tips.

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I never buy at the bottom and I always sell too soon.”

Observation, experience, memory and mathematics—these are what the successful trader must depend on. He must not only observe accurately but remember at all times what he has observed.

Experiences had taught me to beware of buying a stock that refuses to follow the group-leader.

am not telling you this to moralise on the public’s losses through their buying of Guiana or on my profit through my selling of it, but to emphasise how important the study of group-behaviourism is and how its lessons are disregarded by inadequately equipped traders, big and little. And it is not only in the stock market that the tape warns you.

The speculator looks for a quick profit.

The absence of inside support is generally accepted as a pretty good bear tip.

Getting angry doesn’t get a man anywhere.

In a bull market and particularly in booms the public at first makes money which it later loses simply by overstaying the bull market.