Reminiscences of a Stock Operator, Edwin Lefevre

Some passages from the book.

• I admit that I do get irresistible impulses at times to do certain things in the market. It doesn't matter whether I am long or short of stocks. I must get out. I am uncomfortable until I do. I myself think that what happens is that I see a lot of warning-signals. Perhaps not a single one may be sufficiently clear or powerful to afford me a positive, definite reason for doing what I suddenly feel like doing. Probably that is all there is to what they call "ticker-sense" that old traders say... 

• The training of a stock trader is like a medical education. The physician has to spend long years learning anatomy, physiology, materia medica and collateral subjects by the dozen. He learns the theory and then proceeds to devote his life to the practice.

• It really isn't automatism. It is that he has diagnosed the case according to his observations of such cases during a period of many years; and, naturally, after he has diagnosed it, he can only treat it in the way that experience has taught him is the proper treatment. You can transmit knowledge that is, your particular collection of card-indexed facts but not your experience.

• The principles of successful stock speculation are based on the supposition that people will continue in the future to make the [same] mistakes that they have made in the past.

• History repeats itself all the time in Wall Street.

• ... no man can consistently and continuously beat the stock market though he may make money in individual stocks on certain occasions. No matter how experienced a trader is the possibility of his making losing plays is always present because speculation cannot be made 100 per cent safe.

An example of how brokers screw us over:

It often happens that an insider goes to the head of a brokerage concern and says: "I wish you'd make a market in which to dispose of 50,000 shares of my stock."

The broker asks for further details. Let us say that the quoted price of that stock is 50. The insider tells him: "I will give you calls on 5000 shares at 45 and 5000 shares every point up for the entire fifty thousand shares. I also will give you a put on 50,000 shares at the market."

Now, this is pretty easy money for the broker, if he has a large following and of course this is precisely the kind of broker the insider seeks. A house with direct wires to branches and connections in various parts of the country can usually get a large following in a deal of that kind. Remember that in any event the broker is playing absolutely safe by reason of the put. If he can get his public to follow he will be able to dispose of his entire line at a big profit in addition to his regular commissions.

Leadership and Self-Deception, The Arbinger Institute

"Self-betrayal"

• An act contrary to what I feel I should do for another is called an act of "self-betrayal".
• When I betray myself, I begin to see the world in a way that justifies my self-betrayal.
• When I see a self-justifying world, my view of reality becomes distorted.
• So -- when I betray myself, I enter the "box". [this "box" is a paradigm of skewed thinking and perception that drives how I act and think]
• Over time, certain boxes become characteristic of me, and I carry them with me.
• By being in the "box", I provoke others to also be in their boxes.
• In the "box", we invite mutual mistreatment and obtain mutual justification [to continue to behave/think selfishly].  We unknowingly collude in giving each other reason to stay in the "box".

For the good of a relationship (be it in social, or in business), we need to get out of the "box".  To get out of the box, we need to see people as people, not objects that need to be cajoled, or manipulated to serve our needs.  We need to see others as important as well.

How is this important in business?  Well, we work together to achieve results.  If we are in the "box", we won't be thinking for the common good, but for our own selves.

Works in relationships as well.  If you ever had mixed feelings about your spouse's attitudes, this book is for you.  Read it.  Will be good for you.  Helped me think though a number of issues with my biz partner.