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Reminiscences of a Stock Operator by Edin Lefevre

Reminiscences of a Stock Operator [3] by Edin Lefevre was first published many many years ago and tells the first person fictional tale of Larry Livingston, a stock speculator in the early 1900s. It was widely believed that the character was based on Jesse Lauriston Livermore and in this version of the book, the connection is made concrete through annotations by Jon Markman.

Despite being considered an investment classic, I had never heard of it in part because it’s a classic in the sense that it gives a fantastic account of the financial system in the late 19th century and early 20th century. It’s more history than investing education though it has a healthy dose of both, especially with Markman’s annotations. You can preview it at Google Books [4] and even the few pages of the preview give you a very good feel for how the book is.

Livermore, on which the book and the character Livingston is based, won and lost millions of dollars speculating on the stock and commodities markets during the early 1900s, even making ten million dollars over the course of a month. The annotated version links the fictional story of Livingston with the reality of Livermore to provide a much richer experience. Without it, and a clear understand of what is truth and what is fiction, I think the original probably would’ve fallen more into the fictional bucket for me. Having the annotations put the story into context and gave more credence to the story (did Lefevre make it up or did that really happy? Annotations make it clear what’s real and what was “editorial license).

For me, the book was an entertaining way to learn about some financial history. For example, on page 299, the Lefevre’s story mentions Ponzi and the annotations go into Charles Ponzi’s scheme in much greater detail. Ponzi promised 50% returns in 45 days by investing in “international reply coupons.” These international reply coupons were real coupons, they were created in 1906 to facilitate global shipping and redeemable into country-specific postage. Ponzi claimed to arbitrage postage rates… not an unbelievable idea right? Well, except he didn’t invest it and was outed in a Boston Post series. Ponzi only served 10 years (Bernie Madoff sentenced to 150 years! [5]).

It’s a fun book to read, I learn something interesting every time I open it up (I didn’t read it cover to cover, though I feel like I should), and it’s a fun time if you like this sort of thing.