JESSE LIVERMORE

Who is Jesse Livermore

July 26, 1877

  • Jesse Livermore is born in West Acton, Massachusetts.

1891 – aged 14

  • Begins working at Paine Webber & Co in Boston, transferring prices from ticker-tape to the quotation board.

  • At age 15, makes a $3.12 profit on his first trade in Burlington stock and accumulates his first $1,000 by trading stocks and commodities in bucket shops.

1893 – aged 16

  • Paine Webber & Co gives Livermore an ultimatum to either stop speculating in bucket shops or leave his job. He chooses to quit his job.
  • By age 20, he has accumulated $10,000 through trading in bucket shops.

  • At 21, moves to New York to trade on the NYSE through legitimate stockbrokers. His fortune is reduced to $2,500 due to unsuccessful trading.
  • Loses all his funds due to the slow execution of trades on the NYSE. Borrows $500 and goes to St. Louis to trade in bucket shops. Returns to New York with $2,500, repays the loan, and resumes trading on both the Exchange and in bucket shops.

1901 – aged 23

  • On May 9, starts the day with $50,000 but ends it broke due to ticker lag.
  • Returns to bucket shops and wire houses, planning to gather a stake to trade on the Stock Exchange again. Deals in small sums but consistently wins.

1902 – aged 24

  • After a year of successful trading in wire houses, accumulates enough money to buy an automobile and adopts an expensive lifestyle. Returns to New York with a substantial amount of money.

1906 –  aged 28-29

  • In the spring, makes a $250,000 profit by shorting stocks based on a hunch preceding the San Francisco earthquake.

  • In the summer, loses $40,000 acting on a tip from Ed Harding.
  • On October 24, shorts the market during a crash and makes his first $1 million.
  • Later that year, buys a yacht but loses $200,000 trading cotton.

1908 – aged 30-31

  • Breaks his trading rules by taking advice from commodities expert Percy Thomas, resulting in significant losses. Increases his losing position in cotton and sells his winning position in wheat, going broke.
  • Moves to Chicago, where a trading house, aware of his abilities, offers him limited finance for trading.
  • Summoned back to New York by Dan Williamson, who gives him $25,000 to resume trading.
  • After three weeks, makes a $112,000 profit, but leaves the relationship when Williamson interferes with his trading.

1914 – aged 36

  • In several years of a flat market, accumulates debts exceeding $1 million. Declares bankruptcy, which he later states freed his mind for successful trading.

February 1915 – aged 37

  • Asks Dan Williamson for help and is given the facility to trade 500 shares. Reads the tape for six weeks before making a trade to ensure profitability. Buys Bethlehem Steel at $98, sells at $145, regaining a sizeable stake.

Late 1915 – aged 38

  • After several months of successful trading, his balance stands at $145,000.

1916 – aged 38-39

  • Plays the market perfectly, making $3 million profit and spends the winter in Palm Beach.

1917 – aged 40

  • Makes another $1.5 million profit, repays all his debts from 1914, buys $800,000 in annuities to secure his family’s income, and sets up trusts for his wife and son.

1922 – aged 44-45

  • Gives interviews to Edwin Lefèvre for a series of newspaper articles, later compiled into the book “Reminiscences of a Stock Operator,” which becomes a classic.

1923 – aged 46

  • Moves to custom-designed offices in the Hecksher Building on Fifth Avenue to avoid Wall Street gossip and ensure more privacy in his trading operations.

1925 – aged 48

  • In the wheat market, buys grain in 5 million bushel lots while the market is rising, then sells 50 million bushels short for a profit of $10 million.

1929  – aged 52

  • During the great crash of 1929, goes short and makes a profit of around $100 million.

1933 – aged 56

  • The police are called when he goes missing. Returns home after spending a night in a hotel, suffering from amnesia and a nervous breakdown.

1934 – aged 56

  • Goes bankrupt again, losing his entire trading fortune. His family’s annuities save him from destitution. Travels to Europe to relieve his mind of troubles.

1939 – aged 62

  • Writes “How to Trade in Stocks,” a guide for aspiring stock traders.

1940 – aged 62

  • Publishes “How to Trade in Stocks.”

November 28, 1940 (63)

  • Commits suicide, suffering from depression. In his suicide note, he describes his life as a “failure.”

Jesse Livermore's Investing Principles

Don’t trust your own opinion and back your judgment until the action of the market itself confirms your opinion. 

Jesse Livermore

Markets are never wrong – opinions often are.

Jesse Livermore

 There is only one side to the stock market; and it is not the bull side or the bear side, but the right side confirms your opinion. 

Jesse Livermore

To anticipate the market is to gamble. To be patient and react only when the market gives the signal is to speculate.

 

Jesse Livermore

If you can’t sleep at night because of your stock market position, then you have gone too far. If this is the case, then sell your position down to the sleeping level.

 

 

Jesse Livermore

One of the most helpful things that anybody can learn is to give up trying to catch the last eighth-or the first. These two are the most expensive eighths in the world.

Jesse Livermore
Scroll to Top