Livermore

"The recognition of our own mistakes should not benefit us any

more than the study of our successes. But there is a natural

tendency in all men to avoid punishment. When you associate

certain mistakes with a licking, you do not hanker for a second

dose, and, of course, all stock-market mistakes wound you in two

tender spots -- your pocketbook and your vanity.

But I will tell you something curious: A stock speculator sometimes makes

mistakes and knows that he is making them. And after he makes

them he will ask himself why he made them; and after thinking

over it cold-bloodedly a long time after the pain of punishment

is over he may learn how he came to make them, and when, and at

what particular point of his trade; but not why. And then he

simply calls himself names and lets it go at that.

Of course, if a man is both wise and lucky, he will not

make the same mistake twice. But he will make any one of the ten

thousand brothers or cousins of the original. 

The Mistake family is so large that there is always one of them around when you

want to see what you can do in the fool-play line.

To tell you about the first of my million-dollar mistakes I

shall have to go back to this time when I first became a

millionaire, right after the big break of October, 1907. As far

as my trading went, having a million merely meant more reserves.

Money does not give a trader more comfort, because, rich or

poor, he can make mistakes and it is never comfortable to be

wrong. And when a millionaire is right his money is merely one

of his several servants. Losing money is the least of my

troubles. A loss never bothers me after I take it. I forget it

overnight. But being wrong -- not taking the loss that is what

does the damage to the pocketbook and to the soul. 

You remember Dickson G. Watts' story about the man who was so nervous that a

friend asked him what was the matter.

"I can't sleep," answered the nervous one.

"Why not?" asked the friend.

"I am carrying so much cotton that I can't sleep thinking

about it. It is wearing me out. What can I do?"

"Sell down to the sleeping point," answered the friend.

As a rule a man adapts himself to conditions so quickly

that he loses the perspective. He does not feel the difference

much that is, he does not vividly remember how it felt not to be

a millionaire. He only remembers that there were things he could

not do that he can do now. It does not take a reasonably young

and normal man very long to lose the habit of being poor. It

requires a little longer to forget that he used to be rich. I

suppose that is because money creates needs or encourages their

multiplication. I mean that after a man makes money in the stock

market he very quickly loses the habit of not spending. But

after he loses his money it takes him a long time to lose the

habit of spending."

-Reminiscences