Also known as the Boy Plunger, an early 20th century stock trader.
Famed for making and losing several multi-million dollar fortunes.
Short sold the stock market crashes of 1907 and 1929.
Started his trading career at the age of fifteen.
Ran away from home to escape a life of farming his father wanted him to have.
Began his career by posting stock quotes at the Paine Webber brokerage in Boston.
Married thrice.
He had the habit of writing down certain hunches he had about future market prices which he used to check for accuracy later.
A friend convinced him to put his first actual money on the market by making a bet at a bucket shop, a type of gambling that took bets on stock prices but did not actually buy or sell the stock.
By the age of fifteen, he had earned profits of over $1000 (equivalent to today's $20,000).
Eventually banned from most bucket shops for winning too much money from them.
He then moved to New York City for trading in legitimate markets.
And devised a new set of rules to trade the market.
During his lifetime, Livermore gained and lost several multi-million dollar fortunes.
He was worth $3 million and $100 million after the 1907 and 1929 market crashes, respectively.
Subsequently lost both!!!
Livermore's philosophy - Keep increasing the size of one's position as it goes in the right direction and cutting losses quickly.
Livermore sometimes did not follow his own rules strictly. He claimed that his lack of adherence to his own rules was the main reason for his losses after making his 1907 and 1929 fortunes.
Livermore first became famous after the Panic of 1907, when he sold the market short as it crashed.
He noticed a lack of capital to buy stock and predicted that there would be a sharp drop in prices when many speculators were simultaneously forced to sell by margin calls and a lack of credit.
He violated many of his key rules.
Though he preferred working alone, yet he listened to another person's advice and added to a losing position.
Gradually, he was $1 million in debt and declared bankruptcy.
He proceeded to regain his fortune and repay his creditors during the World War I bull market and resulting downtrend.
He owned a series of mansions around the world, each fully staffed with servants, a fleet of limousines, and a steel-hulled yacht for trips to Europe.
Livermore continued to make money in the bull markets of the 1920s.
In 1929, he noticed market conditions similar to that of the 1907 market. He began shorting various stocks and adding to his positions and they kept declining in price. When just about everyone in the markets lost money in the Wall Street crash of 1929, Livermore was worth $100 million after his short-selling profits.
Through unknown mechanisms, he yet again lost much of his trading capital, accumulated through 1929.
March 7, 1934 = the bankrupt Livermore was automatically suspended as a member of the Chicago Board of Trade.
He had lost it all.
November 28, 1940 = Livermore shot and killed himself in the cloakroom of a Hotel in Manhattan.
He got the nick name of 'boy plunger' because of the manner in which he would take large stock or commodity positions.
Livermore lived as he traded - full steam ahead.
“ All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis.” - Jesse Livermore in 'How To Trade In Stocks'
“ The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.” — Jesse Livermore in 'How To Trade In Stocks'
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