Reminiscences of a Stock Operator: A Time for All Things

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My spikenard sends forth its fragrance.
—Song of Solomon

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"I always made money when I was sure I was right before I began. What beat me was not having brains enough to stick to my own game that is, to play the market only when I was satisfied that precedents favored my play. There is a time for all things, but I didn't know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. No man can always have adequate reasons for buying or selling stocks daily or sufficient knowledge to make his play an intelligent play."
—Jesse Livermore, Reminiscences of a Stock Operator

There is a time for all things, indeed. For stock market investors now is time for recovery in preparation of an approaching moment when wisdom is likely to advise battening down the hatches. All that has been built up over the past twenty-five years is highly geared. In other words, growth in financial asset values very much has depended on physical assets being leveraged to the teeth. This arrangement presently is in transition.

Now more than ever your ability to read between the lines passing for contemporary knowledge will be the determining factor in your intelligent stock market play. As far as I am concerned there never has been an easier time in the past twenty-five years to fashion reality from a deluge of information revealing the positions of competing interests. Let me be clear. The very principles that gave birth to the United States of America are alive and well. Likewise, there's an interest that recognizes the immortal enemy's grave vulnerability. Tyranny's traps pitting American investors against their government stand exposed as probably the most ill-informed position. These are the sort likely to lose big these next few years. Pity the fools.

Truth is only this government of ours has power to abate what otherwise might be a sickening financial system unwind. It simply must invest in physical economy as though an enemy were approaching the nation's shores. A bottom to all things financial depends on this most emphatically. The days of a most elaborate deception are ending. This much should be clear, right Madoff?

Think of the present moment from some day in the not-too-distant future. Consider how you might look back and say to yourself, "How could I have been so blind not to see the danger!"

—Tom Chechatka