REMINISCENCES OF A STOCK OPERATOR

by Edwin Lefèvre

Then one day the entire market became quite weak and prices of all stocks began to fall. When I had a profit of at least four points in each and every one of the twelve stocks that I was short of, I knew that I was right. The tape told me it was now safe to be bearish, so I promptly doubled up.

There wasn't any need for me to push things along. The market was bound to go my way, and, knowing that, I could afford to wait. After I doubled up I didn't make another trade for a long tune.

On the news the market broke badly and I naturally covered. It was the only play possible. When something happens on which you did not count when you made your plans it behooves you to utilise the opportunity that a kindly fate offers you.

For one thing, on a bad break like that you have a big market, one that you can turn around in, and that is the time to turn your paper profits into real money. Even in a bear market a man cannot always cover one hundred and twenty thousand shares of stock without putting up the price on himself. He must wait for the market that will allow him to buy that much at no damage to his profit as it stands him on paper.

Buy/sell into strenght and don't be greedy.

Never try to sell at the top. It isn't wise. Sell after a reaction if there is no rally.

I cleared about three million dollars in 1916 by being bullish as long as the bull market lasted and then by being bearish when the bear market started. As I said before, a man does not have to marry one side of the market till death do them part.

in a bear market it is always wise to cover if complete demoralisation suddenly develops. That is the only way, if you swing a good-sized line, of turning a big paper profit into real money both quickly and without regrettable reductions.

when I saw I had the market to cover in, I did.

I always take my loss the moment I am convinced I am wrong,

If I hadn't bought that cotton just before the market closed the day before, I would have saved that four hundred thousand dollars. It shows you how quickly a man may lose big money on a moderate line.

the speculative line of least resistance again demonstrated its value to a trader.

I did not wish to pay off my obligations in driblets or to one man at a time, but in full to all at once. So as long as the market was doing all it could for me I just kept on trading on as big a scale as my resources permitted.

After I paid off my debts in full I put a pretty fair amount into annuities. I made up my mind I wasn't going to be strapped and uncomfortable and minus a stake ever again.

after I married I put some money in trust for my wife. And after the boy came I put some in trust for him. The reason I did this was not alone the fear that the stock market might, take it away from me, but because I knew that a man will spend anything he can lay his hands on. By doing what I did my wife and child are safe from me.

More than one man I know has done the same thing, but has coaxed his wife to sign off when he needed the money, and he has lost it. But I have fixed it up so that no matter what I want or what my wife wants, that trust holds. It is absolutely safe from all attacks by either of us; safe from ...

Among the hazards of speculation the happening of the unexpected I might even say of th...

When I lose money by reason of some development which nobody could foresee I think no more vindictively of it than I do of an inconveniently timed storm.

Life itself from the cradle to the grave is a gamble and what happens to me because I do not possess the gift of second sight I can bear undisturbed.

I have never thought it good business to play any game in any place where it was necessary to keep an eye on the dealer because he was likely to cheat if unwatched.

What playwrights call battles of business are not fights between human beings. They are merely tests of business vision. I try to stick to facts and facts only, and govern my actions accordingly.

Sometimes I do not see the facts all the facts clearly enough or early enough; or else I do not reason logically. Whenever any of these things happen I lose. I am wrong. And it always costs me money to be wrong.

I have in mind certain hazards of speculation that from time to time remind a man that no profit should be counted safe until it is deposited in your bank to your credit.

For many years I have made it my practice to study all the markets.

I trade in accordance to my means and always leave myself an ample margin of safety.

You cannot be dead sure of anything in a speculative operation.

The public was buying anything that was adequately tipped. Investments were not wanted. The demand was for easy money; for the sure gambling profit.

I trade on my own information and follow my own methods.

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

I sometimes think that tip-takers are like drunkards. There are some who can't resist the craving and always look forward to those jags which they consider indispensable to their happiness.

It is so easy to open your ears and let the tip in. To be told precisely what to do to be happy in such a manner that you can easily obey is the next nicest thing to being happy which is a mighty long first step toward the fulfilment of your heart's desire. It is not so much greed made blind...

The belief in miracles that all men cherish is born of immoderate indulgence in hope. There are people who go on hope sprees periodically and we all know the chronic hope drunkard that is held up before us as an exemplary optimist. Tip-takers are all they really are.

Men do not take tips because they are bally asses but because they like those hope cocktails I spoke of.

I have found an easy way and I stick to it. I simply cannot help making money. I will tell you my secret if you wish. It is this : I never buy at the bottom and I always sell too soon."

He was a great investigator, an indefatigable Missourian. He believed in asking his own questions and in doing his seeing with his own eyes. He had no use for another man's spectacles.

I could sell any amount of stock in that market; and, of course, when a man is carrying his full line of stocks, he must be on the watch for an opportunity to change his paper profit into actual cash. He should try to lose as little of the profit as possible in the swapping.

Experience has taught me that a man can always find an opportunity to make his profits real and that this opportunity usually comes at the end of the move.

When you are selling out it is no wiser or braver to sell fifty shares than fifty thousand; but fifty shares you can sell in the dullest market without breaking the price and fifty thousand shares of a single stock is a different proposition.

The training of a stock trader is like a medical education. The physician has to spend long years learning anatomy, physiology, materia medica and collateral subjects by the dozen. He learns the theory and then proceeds to devote his life to the practice. He observes and classifies all sorts of pathological phenomena. He learns to diagnose. If his diagnosis is correct and that depends upon the accuracy of his observation he ought to do pretty well in his prognosis, always keeping in mind, of course, that human fallibility and the utterly unforeseen will keep him from scoring 100 per cent of bull's-eyes. And then, as he gains in experience, he learns not only to do the right thing but to do it instantly, so that many people will think he does it instinctively. It really isn't automatism. It is that he has diagnosed the case according to his observations of such cases during a period of many years; and, naturally, after he has diagnosed it, he can only treat it in the way that experience has taught him is the proper treatment.

You can transmit knowledge that is, your particular collection of card-indexed facts but not your experience. A man may know what to do and lose money if he doesn't do it quickly enough.

Observation, experience, memory and mathematics these are what the successful trader must depend on. He must not only observe accurately but rem...

He cannot bet on the unreasonable or on the unexpected, however strong his personal convictions may be about man's unreasonableness or however certain he may feel that the unexpected happens very frequently. He must b...

Years of practice at the game, of constant study, of always remembering, enable the trader to act on the instant when the unexpected happens as ...

A man can have great mathematical ability and an unusual power of accurate observation and yet fail in speculation unless he also pos...

the wise trader never ceases to study general conditions, to keep track of developments everywhere that are likely to affect or influence the course of the various markets. After years at the game it becomes a habit to keep posted. He acts almost automatically. He acquires the invaluable professional attitude and that enables him to beat the game at times! This dif...

Wall Street makes its money on a mathematical basis. I mean, it makes its money by deali...

Experience has taught me that the way a market behaves is an excellent guide for an operator to follow.

The behaviour of a certain stock is all you need at times. You observe it. Then experience shows you how to profit by variations from the usual, that is, from the probable.

Trade conditions and prospects should work alike with all stocks of a group and the prosperity should be shared by all.

I never buy a stock even in a bull market, if it doesn't act as it ought to act in that kind of market.

I have sometimes bought a stock during an undoubted bull market and found out that other stocks in the same group were not acting bullishly and I have sold out my stock. Why? Experience tells me that it is not wise to buck against what I may call the manifest group-tendency.