Reminiscences?

D

daniel_m

I just read Reminiscences of a Stock Operator again for umpteenth time - such a fun book to read - but for the first time since I joined ET.

I've got a question I always wondered about that I hope some of the more enlightened souls here may be able to answer.

Are the numbers Lefevre talks about real? For example, there's a trade where Livingstone, or rather Livermore, is buying US Steel and Utah Copper. "I began by buying 5000 shares of Utah Copper and stopped because it didn't act right. ... I think the price was around 114. ... I also started buying US Steel at almost the same price. I bought in all 20,000 shares ... I continued to accumulate it until I was carrying 72,000 shares..."

Firstly, does anyone know, or know where I can find out, the volume that was traded back in the early part of the 20th century?

Secondly, 5000 @ $114 is $570,000. The equivalent in today's money, assuming a mere 5% inflation, is $7,000,000, yet there's Livermore coolly "accumulating" 72,000 shares of Steel - a mere $500,000,000 position, cassuming 5%! (which he sold within a point of the top price mind you!)

And if we assume that inflation was only 5%, how the hell could the "ordinary" investor afford even one share of something like Anaconda, which we here selling for around $300, which would be about $20,000 in today's money (5%)?


I love reading "Reminiscences", probably cos it all happened so long ago, and here we are today and the same stuff happens. It's funny how Livermore, someone with such an insight into the trading mind that we are still listening nearly century on, was so clueless about protecting the wealth he had.
 
5% margin is the reason he was able to take on those huge positions.

And one of the big factors in the Crash of 1929 that wiped out so many market players at the time.
 
Originally posted by daniel_m
I just read Reminiscences of a Stock Operator again for umpteenth time - such a fun book to read - but for the first time since I joined ET.

I've got a question I always wondered about that I hope some of the more enlightened souls here may be able to answer.

Are the numbers Lefevre talks about real? For example, there's a trade where Livingstone, or rather Livermore, is buying US Steel and Utah Copper. "I began by buying 5000 shares of Utah Copper and stopped because it didn't act right. ... I think the price was around 114. ... I also started buying US Steel at almost the same price. I bought in all 20,000 shares ... I continued to accumulate it until I was carrying 72,000 shares..."

Firstly, does anyone know, or know where I can find out, the volume that was traded back in the early part of the 20th century?

Secondly, 5000 @ $114 is $570,000. The equivalent in today's money, assuming a mere 5% inflation, is $7,000,000, yet there's Livermore coolly "accumulating" 72,000 shares of Steel - a mere $500,000,000 position, cassuming 5%! (which he sold within a point of the top price mind you!)

And if we assume that inflation was only 5%, how the hell could the "ordinary" investor afford even one share of something like Anaconda, which we here selling for around $300, which would be about $20,000 in today's money (5%)?


I love reading "Reminiscences", probably cos it all happened so long ago, and here we are today and the same stuff happens. It's funny how Livermore, someone with such an insight into the trading mind that we are still listening nearly century on, was so clueless about protecting the wealth he had.
More...


For some reason I doubt any of us "mortals" is in any position to call ONE OF THE GREATEST SPECULATORS THAT EVER LIVED ..... clueless.
 
I think there is so much going on between the lines in that book...It just has it all in there someplace...One of my favorite lines is about the old man who is unwilling to give up his position...The novices are chastising him because he will not give up his position, but think he is talking about an occupation, when Jesse clarifies and says he is talking about his basis cost...That spoke volumes to me and still does...

Alot of people will criticize Jesse and call him a failure, but hell, that book is beyond words...I don;t think there is a book out there that competes with it
 
Originally posted by Cdntrader



For some reason I doubt any of us "mortals" is in any position to call ONE OF THE GREATEST SPECULATORS THAT EVER LIVED ..... clueless.
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Didn't he finish his career washed out? I would say someone that had it all and lost it, not once, but MANY times, pretty clueless about MANAGING his wealth. Protecting it.

Sure, if we're to believe the legends, he had remarkable insight into trading. But what's the point of it if u keep betting it all and losing it all? I guess we can always learn from his example.

Another thing, I wonder if Reminiscences isn't so beloved simply becaue it all happened so long ago. As much as I love reading it, I think this is the case. I mean, imagine the bible came out last week. How many people do you think would bother reading it?
 
fine, but why not focus on the great insights, the tape reading, the wisdom instead of making it an issue of whether the guy blew out or not...

richard dennis, the turtle man, also went up and down, and yet he has trained some of the finest money managers in the world...My point is both of these individuals had great insights, knowledge, tape reading skills...They just did themselves in
 
Livermore did not die broke. He did suffer from severe health problems though, and apparently just wanted to rush along the inevitable.
 
Livermore was nothing but a lucky plunger, with no understanding of risk... it was the fact that he took massive risks (in the 20:1 leveraged days of the early 20th Century) combined with a good hit rate that led to his "success"... plunging is not a recommended way of trading... any comments?
 
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