Reminiscences of a Stock Operator

Published in 1923, Reminiscences of a Stock Operator is a biographical account of one of the great 1920s Wall Street traders — Jesse Livermore. Edwin Lefevre's book shows that while the instruments may change over time, the fundamental impulses of greed and fear never do: 

Another lesson I learned early is that there is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market to-day has happened before and will happen again. I've never forgotten that. I suppose I really manage to remember when and how it happened. The fact that I remember that way is my way of capitalizing experience.

And the book includes essential and practical advice for traders, lessons that are still applicable today. Here for example, Livermore explains the value of keeping your strategy simple and avoiding over-analysis:

After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. I’ve known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level that should show the greatest profit. And their experience invariably matched mine; that is, they made no real money out of it. 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. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.

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. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.

For people trying to understand the true nature of markets and capitalism — the booms and busts, the speculative nature of much of what is called "investment," and the impact of crowd psychology — there is more wisdom in Livermore's experiences than in a hundred academic papers.