Few stock market operators in American history continue to command as much respect and attention from modern investors as Jesse Livermore. And thanks to American journalist Edwin Lefevre's Reminiscences of a Stock Operator, a work of "fiction" that is in fact a thinly veiled biography of Livermore, we have a clear account of the notorious speculator's successes and failures.
It's no exaggeration to say this is one of the great classics of the investing genre, right alongside Henry Clews' 50 Years In Wall Street, Philip Fisher's Common Stocks and Uncommon Profits, and Benjamin Graham's The Intelligent Investor.
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One of the strongest draws of the book is Livermore's fascinating life story, in which he earned and lost a half-dozen fortunes during his time on Wall Street. But beyond this, one can't help but admire the countless observations and anecdotes about the market that remain as true today as they were more than nine decades ago, when the book first went on sale. It was, after all, Livermore who said that "history repeats itself all the time in Wall Street."
It's with this in mind that I recently spent a day rereading Reminiscences of a Stock Operator in order to tease out the most interesting and applicable lessons about investing. In no particular order, then, here are 10 of the most timeless anecdotes (accompanied by quotes) that investors can learn from Livermore:
1. An investor's greatest enemy is often himself.
2. It is unwise to invest in the stock market if you don't know what you're doing.
3. There's a lot of truth to Blaise Pascal's quote, "All men's miseries derive from not being able to sit in a quiet room alone."
4. There is no such thing as "easy money" in the stock market.
5. The stock market isn't there to oblige your needs.
6. Even the best among us are vulnerable to authority bias.
7. To make big money, you have to learn to be patient.
8. You should always expect the unexpected.
9. The ability to act quickly can be just as important as determining the right thing to do.
10. Stock speculation is rarely profitable.
The article 10 Investing Lessons That Have Stood the Test of Time originally appeared on Fool.com.
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