Reading some of the posts this weekend brings to mind legendary speculator, Jesse Livermore - surely one of the most fascinating characters in all of financial-market history.
 
About a century ago Jesse Livermore blossomed into one of the most celebrated speculators of all time.  He was trading heavily in the early decades of the 1900s, a wondrous era to speculate in stocks.  His renowned exploits are still viewed with great awe and reverence by today’s elite speculators and his towering speculation wisdom will stand tall for ages to come.
 
Livermore’s exploits were recorded in the greatest book on speculation of all time, originally published in 1923, called “Reminiscences of a Stock Operator” written by a gifted financial journalist named Edwin Lefevre.  Lefevre had spent weeks extensively interviewing Jesse Livermore, so market historians are virtually unanimous in viewing Lefevre’s classic book as a thinly-disguised biography of Livermore’s trading life. The speculation wisdom contained within are truly priceless for all speculators to digest. 

Livermore’s words and experiences are so endearing and powerful because he presents himself as just another mere mortal, with hopes, fears, and frailties.  He is brutally honest in critiquing his own evolution as a speculator and thoroughly explaining his own mistakes and the great wisdom they ultimately led to.

Some key points to think about:

(Chapter V) … “The customers, who were all eager to be shoved and forced into doing things so as to lay the blame for failure on others...”
 
(Chapter V) … “I think it was a long step forward in my trading education when I realized at last that when old Mr. Partridge kept on telling the other customers, “Well, you know this is a bull market!” he really meant to tell them that 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.”
 
In all of “Reminiscences” this crucial idea that the Really Big Money is always earned by prudently riding the large trends over time and not in day trading every minute fluctuation is one of the central themes of the book.  Livermore hammers this again and again, attacking it from countless angles and spicing up all of his amazing lessons with his own enthralling personal experiences.
 
And this leads into what is perhaps the most famous quotation out of the entire book, Jesse Livermore’s legendary “be right and sit tight” wisdom!  While a long quotation, you really need to read this entire paragraph in its original shining unedited brilliance…
 
(Chapter V) … “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 and 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.”
 
Be Right and Sit Tight!  Jesse Livermore at his finest!  Like so many great truths in life this is so simple to understand, but so incredibly difficult to actually act out and walk the walk.  So much of speculation really boils down to patience, that extraordinarily difficult trait to acquire.  Do your research, determine the primary trend, deploy your positions, and then just hurry up and wait.
 
The patient and prudent contrarian speculator usually wins in the end, but the whole modern financial-market arena is configured to award impatience. 

Happy speculating!