Summary of Lessons from the Greatest Stock Traders of All Time

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Lessons from the Greatest Stock Traders of All Time book summary
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Rating

8

Qualities

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  • Applicable

Recommendation

Can ordinary people really make money in the stock market? The five famous traders author John Boik profiles here would probably answer "yes," but it would be a qualified yes. Beating the market requires more than just following a trading formula, as the stories of these traders’ lives make abundantly clear. To win at the great game of Wall Street, a trader must learn from experience, and that means spending long hours studying. The trading rules and strategies in this book are enlightening, but most of them involve judgment calls that could only have been made by someone familiar with the daily rhythms of the market. Though the careers of the subtitle’s "Greatest Stock Traders of All Time" span more than a century, their personalities and strategies are strikingly similar, a fact that Boik highlights well. Their similarities suggest that successful traders may be born with the necessary high risk tolerance, but that to become sustained victors, they need to develop strong work ethics, cultivate independent minds and never give up. getAbstract suggests this book to active traders, not buy-and-hold investors - those with low risk tolerance need not apply.

About the Author

John Boik is a controller and the owner of Stock Traders Management, Inc., a private money management firm. An active trader and former stockbroker, he writes "The Stock Market Weekly Report" for Traders Press.

 

Summary

Jesse Livermore

Born to a poor family in 1877, Jesse Livermore used his natural mathematical talent to get a job writing stock trades on a chalkboard at Payne Webber when he was just 14. He began to study stock prices and, by age 16, was making steady profits in quick-trade brokerage houses known as bucket shops. In fact, he was so successful that he was banned from the Boston bucket shops, prompting him to move to New York.

Livermore’s trading career, from 1892 until his death in 1940, was a series of highs and lows. His short sales just before the crash of 1907 made him a millionaire, but he lost his entire fortune and went deeply into debt by 1914. He blamed this loss on the fact that he had listened to stock tips from others, instead of relying on his own judgment and experience. He made a comeback during the bear market of 1916 and called the 1929 crash, making millions by shorting the market, but he was bankrupt again by 1934. In 1940, just after publishing his book, How to Trade in Stocks, Livermore fell into a deep depression and committed suicide.

Drawing on extensive analysis of his own trades, Livermore formulated a set of trading rules. The most important...


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