Reminiscences of a Stock Operator, Chapter 16 summary
Chapter 16 of 24 · 22 min to read the chapter
In Chapter 16, Livingston explains how a promoter’s tip draws his wife into Borneo Tin while his own bearish judgment leads him to sell it short. Stories of other traders’ losses expose dependence on tips, while an investor’s close observation of company presidents offers a contrasting method of choosing stocks.
What happens
- Livingston buys ten thousand Borneo Tin shares at its launch and sells them at 120 despite the promoters’ efforts to dislodge him.
- Wisenstein persuades Mrs. Livingston to buy Borneo Tin secretly, hoping her husband becomes interested in buying it.
- Livingston instead sells Borneo short, and his wife reveals her losing purchase when Haley demands more margin.
- Livingston returns her five hundred dollars and continues selling Borneo until he sees an opportunity to cover profitably.
- Stories about professional traders show that losses and unreliable sources do not necessarily weaken their appetite for tips.
- A Pennsylvania Dutchman explains how contrasting habits of waste and thrift guide his successful change of railroad investments.
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In this chapter
What to notice
Livingston identifies the desire for easy reassurance as the attraction of tips. The repeated failures of supposedly reliable advice support this explanation.
Quick check
Why does the Pennsylvania Dutchman sell his Atchison stock?
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