For the next few weeks, we will be using quotes from Edwin Lefevre and his masterpiece trading book, “Reminiscences of a Stock Operator.” Enjoy!
A Sad Story
This is the sad part—the emotional part—of our story.
Edwin Lefevre, our master teach, one of the greatest—if not the greatest—traders that ever lived, made the supreme mistake.
See, he had his theory about the direction of cotton. However, after listening to a very intelligent, very well spoken individual he admired, he, without a real reason, changed his mind and reversed his direction on cotton.
He put money into cotton and wheat. Wheat began to go his way, and cotton began to go against him.
He tells us this:
“It seems incredible that knowing the game as well as I did and with an experience of twelve or fourteen years of speculating in stocks and commodities I did precisely the wrong thing. The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. It was an utterly foolish play, but all I can say in extenuation is that it wasn’t really my deal, but Thomas’. Of all speculative blunders there are few greater than trying to average a losing game.”
-Edwin Lefevre
It Gets Worse
So, wheat is winning for him—and he sells it. Cotton is going against him—and he adds more.
And then he adds more.
And then he adds more.
And it wiped him out completely.
From millionaire investor to poor overnight.
And he spent the next four years getting himself into a million dollars in debt trying to get out.
He really lived all of the extremes that a trader can live.
It is a mind-blowing story.
Remember: No matter how bad you have it, someone has it worse. And there is always redemption. Some of the most successful people have had to deal with failure in the most extreme ways. Failure can be the greatest teacher, or the worst of enemies—but we get to choose.
Interested in partnering with us? Email us at tradingchampionsdaily [at] gmail [dot] com