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One of Jesse Livermore's Favorite Books

Dickson Watts was at the height of his powers when Jesse Livermore was born. Watts’s book would greatly influence his views on speculation.

Dickson Watts was at the height of his powers when Jesse Livermore was born. Watts’s book would greatly influence his views on speculation. 

Dickson G. Watts was President of The New York Cotton Exchange between 1878 and 1880. He is one of the first speculators to put his thoughts down in a publication. Watts wrote “Speculation As A Fine Art and Thoughts On Life” in the 1880’s. I first saw an excerpt of the book reprinted in Stock Market Technique – Number One by Richard Wyckoff (1932). Speculation as A Fine Art was reprinted in 1965 by Jack R. Levien, and reprinted almost every decade since up until 2010. 

In the 1965 reprint, the foreward by Jack R. Levien reads, “You have opened the tomb of a great man. His name, his hooks and his exchange have almost vanished. Dickson G. Watts, author of SPECULATION AS A FINE ART and THOUGHTS ON LIFE, was a charter member and President of the New York Cotton Exchange.The revival of Edwin Lefevre’s book, REMINISCENCES OF A STOCK OPERATOR, has renewed interest in the book because “Old Dickson” wrote the bible for successful speculators. Reference is constantly made of SPECULATION AS A FINE ART , yet there is not a copy in the Library of Congress or The New York Public Library. This was one of the few books written on speculation by a successful speculator.”

Below is an excerpt of the book. You can’t help but think how little has changed in 140 years.

Let us first consider the qualities essential to the equipment of the speculator. We name them: Self-reliance, judgment, courage, prudence, pliability. 

  1. Self-Reliance. A man must think for himself, must follow his own convictions. George MacDonald says: “A man cannot have another man’s ideas any more than he can another man’s soul or another man’s body.” Self-trust is the foundation of successful effort. 
  2. Judgment. That equipoise, that nice adjustment of the faculties one to the other, which is called good judgment, is an essential to the speculator. 
  3. Courage. That is, confidence to act on the decisions of the mind. In speculation there is value in Mirabeau’s dictum: “Be bold, still be bold; always be bold.”
  4. Prudence. The power of measuring the danger, together with a certain alertness and watchfulness, is very important. There should be a balance of these two, Prudence and Courage; Prudence in contemplation, Courage in execution. Lord Bacon says: “In meditation all dangers should be seen; in execution one, unless very formidable.” Connected with these qualities, properly an outgrowth of them, is a third, viz: promptness. The mind convinced, the act should follow. In the words of Macbeth; “Henceforth the very firstlings of my heart shall be the firstlings of my hand.” Think, act, promptly. 
  5. Pliability – the ability to change an opinion, the power of revision. “He who observes,” says Emerson, “and observes again, is always formidable.” 

The qualifications named are necessary to the makeup of a speculator, but they must be in well-balanced combination. A deficiency or an overplus of one quality will destroy the effectiveness of all. The possession of such faculties, in a proper adjustment is, of course, uncommon. In speculation, as in life, few succeed, many fail.

You can read the PDF Copy [HERE] or Support the Reprinting Efforts by purchasing a physical copy [HERE] for $7.00 USD.

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