Reminiscences of a Stock Operator, Chapter 9 summary
Chapter 9 of 24 · 25 min to read the chapter
In Chapter 9, Larry Livingston interrupts two vacations to trade against a rising market, builds a profitable short position, and returns to New York as money grows scarce. During the October panic, he recognizes the danger of further selling, covers his shorts, and buys heavily, ending the day worth over one million dollars.
What happens
- In Palm Beach, Livingston buys Anaconda during a rally, then sells when its movement contradicts his expectations and begins shorting stocks.
- After four months of bearish trading, he closes his positions with substantial profits and travels to Europe.
- News of an extra Smelters dividend prompts fresh short sales and an early return to New York.
- As borrowing becomes harder, Livingston profits from falling stocks while brokers struggle to obtain urgently needed loans.
- On October 24, 1907, Morgan arranges emergency lending while Livingston independently decides that further selling threatens a destructive panic.
- Livingston covers his shorts and buys one hundred thousand shares, agreeing to a banker's request that he stop selling.
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In this chapter
What to notice
Larry Livingston values disciplined planning and understanding above the money itself. The line sums up his claim that he now trades intelligently rather than gambles.
Quick check
What does Livingston do before the banker's request reaches him?
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