Favorite quotes from the best book every written on investing: “Reminiscences of a Stock Operator”

Even though it was written way back in early 1920s, Reminiscences of a Stock Operator is still the best book ever written about investing/speculation/trading. Here are my favorite quotes:

“The professional concerns himself with doing the right thing rather than with making money, knowing that the profit takes care of itself if the other things are attended to.”

“They say you never grow poor taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market.”

“Stocks are never too high to buy or too low to sell.”

“The speculator’s chief enemies are always boring from within. It is inseparable from human nature to hope and to fear…. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit.”

“And right here let me say one thing: 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. You always find lots of early bulls in bull markets and early bears in bear markets. 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 which 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.”

“A loss never bothers me after I take it. I forget it overnight. But being wrong—not taking the loss—that is what does the damage to the pocketbook and to the soul.”

“The only thing to do when a man is wrong is to be right by ceasing to be wrong.”

“It was very curious how, after suffering tremendous losses from a break of fifteen or twenty points, people who were still hanging on, welcomed a three-point rally and were certain the bottom had been reached and complete recovery begun.”

“Speculation is a hard and trying business, and a speculator must be on the job all the time or he’ll soon have no job to be on.”

“Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street. When you read contemporary accounts of booms or panics the one thing that strikes you most forcibly is how little either stock speculation or stock speculators to-day differ from yesterday. The game does not change and neither does human nature.”

“A man has to guard against many things, and most of all against himself – that is, against human nature.”  Reminiscences of a Stock Operator

“When I am wrong only one thing convinces me of it, and that is, to lose money. And I am only right when I make money. That is speculating.”

“Tape reading was an important part of the game; so was beginning at the right time; so was sticking to your position.  But my greatest discovery was that a man must study general conditions, to size them so as to be able to anticipate probabilities.”

“Among the hazards of speculation the happening of the unexpected–I might even say of the unexpectable–ranks high.”

“The big money was not in the individual fluctuations but in the main movements—that is, not in reading the tape but in sizing up the entire market and its trend.”

“There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. No man can always have adequate reasons for buying or selling stocks daily—or sufficient knowledge to make his play an intelligent play.”

“They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side. It took me longer to get that general principle fixed firmly in my mind than it did most of the more technical phases of the game of stock speculation.”

 

Yes, that’s quite a few quotes, but it’s such a great book that is full of great lines. (I will have to reread it for the zillionth time once I finish the book I am currently writing.)

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3 responses to “Favorite quotes from the best book every written on investing: “Reminiscences of a Stock Operator”

  1. Ah, just commented on your earlier post, I hadn’t realized you’d already put this one up. So, farewell for now, while I re-read the quotes…

  2. The old timers had, I think, a better grasp of economics than we moderns.
    “Mark Twain confessed he was as fervent as anyone when it came to money; he had acquired a large amount of money himself, most of it on credit. He wrote: ‘I wasn’t worth a cent two years ago, and now I owe two million dollars.'”

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