In my review of
The Best Trading Lessons of Jesse Livermore
by Frank Marshall posted on Amazon.co.uk, I gave the book Three Stars, which means Worthwhile.
Here is my book review.
Interesting thoughts
Livermore was a legendary American stock trader who made and lost fortunes including making the equivalent (in today’s money)of more than $1 billion by shorting the 1929 crash and then losing it.
In 1940 he wrote a book called “How To Trade Stocks” which recorded the lessons he had learned, before he committed suicide later that year, leaving a $5 million estate (old money) that he had salted away in trusts during the good times.
In this book, we have quotes from Livermore immediately followed by comments and explanations from the author.
Personally by nature, I’m a value investor rather than a trader but in the 2017 world of distorted markets from zero interest rates and Quantitative Easing, pretty much everything looks expensive and sitting in cash carries its own risks through inflation and the threat of bank bail-ins.
I read the book with interest as I’ve had to learn about momentum investing. The big lesson I gained was that the first one sixth of a gain and the last are the most expensive. So don’t worry about capturing the low to buy and the high to sell, be happy to ride along and get the middle two thirds of gains.
There is plenty of sensible advice in here but I’ve held back from giving it a higher rating because
1 – the style of the language is old fashioned which makes it harder to read and understand.
2 – the book doesn’t present a system. I found myself nodding along in agreement but it hasn’t changed my investment approach.
If you’re new to trading, then this isn’t the place to start. There are easier books to read that will give you simple or complex systems to use to assess opportunities. If you feel you’re knowledgeable, either through tuition or experience, then this book is well worth reading both for the individual pearls of wisdom and for the overall message.
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