"Men who can both be right and sit tight are uncommon” was the wisdom of “Old Mr. Partridge” in the book Reminiscences of s Stock Operator (1923) by Edwin Lefevre. The statement was based on the experiences of legendary stock trade Jesse Livermore (1877-1940)—who some say actually wrote Lefevre’s book. “Be right and sit tight” ("being right and sitting tight") became Livermore’s investment motto. The saying is a caution against over-trading.
Another popular phrase from Reminiscences of a Stock Operator is: “They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side.”
“Buy right and hold tight” (or, “Buy right and sit tight") is an investment saying—similar to Livermore’s—popularized by Jack Bogle of The Vanguard Group. Bogle wrote in 1999 (see below): “Simplicity will help you to come down to where you ought to be. Buy right and hold tight.”
“Buy right and hold/sit tight” has been cited in print in 1956, 1973 and 1993, but the saying has appeared most frequently in the 2000s.
Wikiquote: Jesse Lauriston Livermore
Jesse Lauriston Livermore (1877 - 1940), American financial speculator.
. “It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!”
. “Men who can both be right and sit tight are uncommon.”
. “The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.”
Wikipedia: Jesse Livermore
Jesse Lauriston Livermore (July 26, 1877 — November 28, 1940), also known as the Boy Plunger, was an early 20th century stock trader. He was famed for making and losing several multi-million dollar fortunes and short selling during the stock market crashes in 1907 and 1929.
The popular book Reminiscences of a Stock Operator, by Edwin Lefevre, reflects many of those lessons. Livermore himself wrote a less widely read book, “How to trade in stocks; the Livermore formula for combining time element and price”. It was published in 1940, the same year he committed suicide. It was later revealed by Livermore that he had actually penned the book Reminiscences of a Stock Operator, and that LeFevre had acted as the editor and coach. There is some speculation that this partnership between the two men was not their first collaboration. Since LeFevre was a writer and journalist, it is thought that he was one of the friendly newspapermen that Livermore employed for both information and planted articles.
Wikipedia: John Bogle
John Clifton “Jack” Bogle (born May 8, 1929 in Verona, New Jersey) is the founder and retired CEO of The Vanguard Group. He attended Blair Academy on a full scholarship, earned his undergraduate degree from Princeton University in 1951, and attended evening and weekend classes at the University of Pennsylvania. Upon graduation he went to work for Walter L. Morgan at Wellington Management Company.
After successfully climbing through the ranks, he was named chairman of Wellington but was later fired for an “extremely unwise” merger he approved, a poor decision he considers his biggest mistake stating “The great thing about that mistake, which was shameful and inexcusable and a reflection of immaturity and confidence beyond what the facts justified, was that I learned a lot.” Bogle then founded Vanguard in 1974. Under his leadership, the company grew to be the second largest mutual fund company in the world. Influenced by the works of Eugene Fama, Burton Malkiel and Paul Samuelson, Mr. Bogle founded the Vanguard 500 Index Fund in 1975 as the first index mutual fund.
Reminiscences of s Stock Operator
By Edwin Lefevre
Hoboken, NJ: Wiley
2004 (first published in 1923)
Pg. 75 ("The Wisdom of Old Mr. Partridge"):
“And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my (Pg. 76—ed.) sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine—that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grapsed this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.
“The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he doped out it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The game did not beat them. They beat themselves, because though they had brains they couldn’t sit tight. Old Turkey was dead right in doing and saying what he did. he had not only the courage of his convictions but the intelligent patience to sit tight.
How to Trade in Stocks:
His Own Words: the Jesse Livermore secret trading formula for understanding timing, money management and emotional control
By Jesse Livermore
Edited by Richard Smitten
New York, NY: McGraw-Hill
2001 (first published in 1940)
I never had a loss to worry about for the simple reason that I acted promptly and started to accumulate my line right at the time my personal guide told me to do so. All I had to do thereafter was just sit tight and let the market run its course, knowing if I did so, the action of the market itself would give me in due time the signal to take my profits.
26 July 1942, Los Angeles (CA) Times, “New York Views” by George Hughes, pg. A7:
In other words, it s a case of what Jesse Livermore used to call “getting in right and sitting tight.”
4 April 1956, Saint Joseph (MI) Herald-Press, pg. 15, col. 7 classified ad:
Buy Right and Sit Tight
9 acres across from Angelo’s new Shopping Center.
14 September 1973, Lowell (MA) Sun, “Pay dirt: some model gold portfolios” by Donald J. Hoppe, pg. 30, col. 1:
Decide what type of collection you would like to have; have a definite program for acquisition; then know what type of coin you are looking for. In short, the golden rule for gold-coin investing is: Buy right, sit tight.
Spokesman of the New South
By James F. Cook
Macon, GA: Mercer University Press
As a mature investor he followed the old theory of “buy right and sit tight.”
Common Sense on Mutual Funds:
New imperatives for the intelligent investor
By John C. Bogle
New York, NY: John Wiley
Simplicity will help you to come down to where you ought to be. Buy right and hold tight. Follow these eight basic rules for investing. In this complex world, stick with simplicity.
2 December 2001, Akron (OH) Beacon Journal, “Financial Gurus Answer Investing Questions,” pg. H6:
Buy right and hold tight. If you can’t get your emotions out, you shouldn’t be in the stock market.
The Motley Fool
Markets Up on Pope Pick
By Seth Jayson (TMF Bent)
April 19, 2005
Our advice is, at it has always been, to pay attention to the merits of individual companies, buy right, and sit tight. The short-term thinking encouraged by the live-shot, breaking-news-addicted press is not only bad for your portfolio; it’s also of dubious value for your mental and spiritual well-being.
Gold Shares Leading Bullion Out of The Doldrums
Michael J. DesLauriers
Famed market prodigy Jesse Livermore believed that ‘being right and sitting tight’ was the surest way to grow one’s capital and nowhere is this maxim more appropriate than in relation to the volatile gold shares.
Be Right and Sit Tight
Elliot H. Gue
MCLEAN, VA (EnergyStrategist.com)—Jesse Livermore was perhaps the most famous stock trader of the early 20th century; he made and lost millions of dollars in his day. And, for the record, that was a lot of money 100 years ago. Livermore was most famously immortalized in Edwin Lefevre’s thinly veiled biography Reminiscences of a Stock Operator, probably one of the best and most helpful books on trading and investing ever written.
One of Livermore’s trading rules was “Be Right and Sit Tight.” He also said this is one of the hardest lessons for any investor to learn. In other words, Livermore suggested jumping on board a major trend and then having the courage to hold on to make the really big gains.
Investing in One Lesson
By Mark Skousen
Washington, DC: Regnery Publishing
Jesse Livermore is famous for the refrain, “Buy right, sit tight.”
Free-market News Network (FMNN)
Buy right and sit tight
Thursday, January 18, 2007 - FreeMarketNews.com
A large portion of an investor’s success can be attributed to simply making a good purchase at a good price and hanging on.
Google Groups: New Ryze
From: “Ashok Nair”
Date: Tue, 4 Mar 2008 20:35:35 +0800
Local: Tues, Mar 4 2008 7:35 am
Subject: 10 golden rules to become rich!
*2. Buy right and hold tight*
The most critical decision you face is arriving at the proper allocation of assets in your investment portfolio—stocks for growth of capital and growth of income, bonds for conservation of capital and current income.
Once you get your balance right, then just hold tight, no matter how high a greedy stock market flies, nor how low a frightened market plunges.
The Financial Express
First Timers To Forbes Billionaires List
Posted: 2008-03-09 22:02:31+05:30 IST
$1 billion / Investor
One of the signs in his office reads: Buy right and hold tight.
Why pension funds beat mutual funds
Understanding the edge enjoyed by people who run pension money can make you a smarter investor.
By Jason Zweig, Money Magazine senior writer/columnist
Last Updated: July 9, 2008: 10:09 AM EDT
As Vanguard’s founder Jack Bogle likes to say, “Buy right and sit tight.” To get a result as good as a pension fund would give, you must act as rarely and patiently as the best pension managers do and shun funds that think short term.
New York City • Banking/Finance/Insurance • (0) Comments • Sunday, July 26, 2009 • Permalink