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Thursday, May 25, 2023

Trader's Mind

 Five books about philosophy and psychology of traders, written by or about some of greatest investment minds of all time. It's like getting mentorship from an Olympic champion.

1. "Reminiscences of a Stock Operator" by Edwin Lefèvre.

Typically, the first choice is a timeless classic written about 100 years ago about life and financials adventures of (allegedly) greatest trader of all time - Jesse Livermore. Written very nicely by popular financial columnist of the Roaring 20's. Original text from good publisher is hard to find - they all out of print.

I found this:
 
There were several attempts to publish Reminiscences with modern day commentary and explanation of historical backdrop. I think the best one is by Markman. It contains original text, his annotations and many photographs, which helps since book covers important historical events and prominent people of that time.

2. "How to Trade in Stocks" by Jesse Livermore

This book is definitely not my first choice, but if you really liked Reminiscences, you will love this short book written by Livermore himself near the end of his life. It corroborates stuff Lefevre wrote, adds more color and includes last iteration of his trading system with notes and records. Jesse Livermore wrote this book for his son. Original text is tiny - less than 100 pages, but I was never able to find one. I have this variant with modern commentary, that is completely unnecessary imnsho and can be mostly disregarded.

https://www.amazon.com/How-Trade-Stocks-Jesse-Livermore/dp/0071469796/ref=sr_1_1?qid=1685027571&refinements=p_27%3AJesse+Livermore&s=books&sr=1-1&text=Jesse+Livermore

3. "How I Made $2,000,000 in the Stock Market" by Nicolas Darvas

A true story about non-financial guy (he was a dancer!) going thru every "circle of hell" of professional trading, figuring out an elegant, repeatable and teachable approach to speculation ... known today as Darvas Box. Written in light and playful style by Darvas himself, it's a short and fun read... and works today with only slight variations ;)

https://www.amazon.com/gp/product/1684226287/ref=ppx_od_dt_b_asin_image_s00?ie=UTF8&psc=1

4. "Pit Bull: Lessons from Wall Street's Champion Trader" by Martin Buzzy Schwartz

The most current of five, this one takes place in 80s-90s, when Buzzy was (and still is) an undefeated champion trader. Guy #2 lost his mind (literally went crazy) trying to beat Pit Bull. He still lives, now in Florida, breeds champion horses, trades differently than before. Periodically he can be found on YouTube, giving interviews to independent channels mostly about "old times". Although his methods don't work as well in modern markets, alot of it still applicable, but stories themselves are pure gold and written very well. Incidentally, this book was quite popular and loved by trader's wifes and daughters lol.

Of note: reading description and editorial reviews on AMZN, I am convinced that either none of those people read the actual book or they are tasked with character assassination (for whatever misguided reason).

https://www.amazon.com/Pit-Bull-Lessons-Streets-Champion/dp/0887308767/ref=tmm_hrd_swatch_0?_encoding=UTF8&qid=1685028011&sr=1-1 

5. "The Complete Turtle Trader" by Michael Covel

Last but not least, this story is probably one of the most amazing, unbelievable, controversial episodes of financial markets in second half of 20th Century. A $1 bet that speculating can be taught and traders can be bread like turtles in Asian farm. Shrouded by secrecy to this day, many Turtles went on to become some of the biggest money managers nobody ever heard of. This story is told by one of original Turtles (supposedly the failed one), and although he broke NDA agreements and vows of silence, he wasn't sued or made to stop selling trader's "educational products". People involved usually neither confirmed nor denied, and nobody afaik ever disputed the tale of Turtle Experiment and its results, as Covel described it.

https://www.amazon.com/Complete-TurtleTrader-Investors-Overnight-Millionaires/dp/0061241717/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=&sr=