Who Was Jesse Livermore?
Why Hollywood never made a movie about this guy, I'll never know. I'd buy a ticket. Talk about rags-to-riches!
A young kid leaves the family farm, mom secretly gives him some traveling money (God bless moms), because he believes there's got to be more to life. Nothing unusual about that, many young people leave small towns or farms for the same reason. Some make it, some don't.
Hitching a ride on a wagon, young Livermore arrives in Boston and, by chance, stops in front of a Paine Webber brokerage office. Livermore wanders inside. It's love at first sight.
It just so happens the brokerage firm needs a "board monkey" to post prices for the customers. Livermore jumps at the chance. So, within hours of leaving the farm, young Jesse has a job, rents a room, and becomes his own man before the age of 15.
His mathematical brain sets to work immediately as the customers yell out quotes in an endless stream from the ticker tape. Before long, Livermore challenges the crowd to yell out the quotes faster. With chalk in hand, brain in high gear, concentration focused, he writes down the numbers faster than the crowd can yell them. Livermore's alive with the challenge.
But Livermore's not just writing down numbers. He's in sync with them, in harmony with them. He soon notices recurring patterns. He keeps a notebook.
He's also sensitive to the crowd. As numbers change and stocks move up and down, so too does the mood of the crowd.
As a stock's volume increases, the excitement level increases. He feels the electricity in the air. He sees their eyes light up as the price increases along with their increased trading. He notices how their personalities change as they spot opportunities to make money (that's called greed).
All of a sudden, the price rolls over and falls - the crowd becomes quiet, sullen, apprehensive (that's called fear).
He notices how the traders talk among themselves, buoying each others confidence, reassuring themselves (that's called denial). Livermore also notices how often their wrong.
Over time, Livermore figures out that it doesn't matter what people say that counts - it only matters what the tape says that counts! Don't waste time trying to figure out why things are happening, only pay attention to what is happening. By the time the reason why becomes known, it will be too late - the move will be over.
This becomes the foundation of his trading system. People such as economists and fundamentalists, who are always trying to figure out the why of something before they make a move, have a hard time accepting this conceptual approach.
Jesse Livermore first tries out his theories in the local "bucket shops" which are stock market betting parlors of the day. He wins so much money that, eventually, they refuse to take his bets.
Barred from the bucket shops, he moves into the real stock market losing at first, until he figures out how to overcome the effect of the time lag between when the order is entered and, unlike the bucket shops, when the order is actually filled.
Nor does Jesse Livermore limit his trading to stocks. He also trades commodities where he accomplishes such feats as cornering entire commodity markets such as cotton and coffee. When asked why, he replies, "Just to see if it could be done." When the President of the United States, on behalf of the commodity exchanges involved, asks what it would take for him to unwind his positions, he replies, "Mr. President, all you have to do is ask."
He makes $3 million dollars in a single day by going short in the crash of 1907. Just to grasp the magnitude of such a trade, by comparison, remember that we're talking about the purchasing power of 1907 dollars. The dollar went a lot further then than it does today, 2007, a hundred years later.
Jesse Livermore doesn't always win. He goes bankrupt more than once. Whenever he invests in private business he always loses every cent. He always manages to find backers that stake him on condition that he engage in the only business in which he is truly expert: the stock market.
He never talks about his trades, before or after.
Because people follow his every move, Livermore masks his moves in complete secrecy. He moves his offices uptown to get away from the crowd and to maintain privacy. He is forced to use as many as 50 brokers at a time in putting on and taking off positions so that no one is able to see the whole picture of his trading activity. Sometimes purposefully losing money just to shake off followers. Each broker sees only a small piece of the puzzle. Everyone is on a strictly "need to know" basis.
His most spectacular coup comes when he, correctly calling the top of the market, puts on massive short positions netting him over $100 million dollars in a single day during the crash of 1929, just as the nation was entering the Great Depression.
People blame him for causing the crash, but it isn't true. Unlike others, Jesse Livermore simply observes what is happening, never mind the why, and follows what he describes as the market's "line of least resistance", by going short.
Eleven years later, in November 1940, Jesse Livermore commits suicide by gun shot. No one knows why. He leaves no note. Some suggest he was losing his touch. Others wonder if the pressure of being blamed for the 1929 crash was too much for him to bear. Who knows?
If Hollywood made such a movie, who wouldn't want to see it?
A young kid leaves the family farm, mom secretly gives him some traveling money (God bless moms), because he believes there's got to be more to life. Nothing unusual about that, many young people leave small towns or farms for the same reason. Some make it, some don't.
Hitching a ride on a wagon, young Livermore arrives in Boston and, by chance, stops in front of a Paine Webber brokerage office. Livermore wanders inside. It's love at first sight.
It just so happens the brokerage firm needs a "board monkey" to post prices for the customers. Livermore jumps at the chance. So, within hours of leaving the farm, young Jesse has a job, rents a room, and becomes his own man before the age of 15.
His mathematical brain sets to work immediately as the customers yell out quotes in an endless stream from the ticker tape. Before long, Livermore challenges the crowd to yell out the quotes faster. With chalk in hand, brain in high gear, concentration focused, he writes down the numbers faster than the crowd can yell them. Livermore's alive with the challenge.
But Livermore's not just writing down numbers. He's in sync with them, in harmony with them. He soon notices recurring patterns. He keeps a notebook.
He's also sensitive to the crowd. As numbers change and stocks move up and down, so too does the mood of the crowd.
As a stock's volume increases, the excitement level increases. He feels the electricity in the air. He sees their eyes light up as the price increases along with their increased trading. He notices how their personalities change as they spot opportunities to make money (that's called greed).
All of a sudden, the price rolls over and falls - the crowd becomes quiet, sullen, apprehensive (that's called fear).
He notices how the traders talk among themselves, buoying each others confidence, reassuring themselves (that's called denial). Livermore also notices how often their wrong.
Over time, Livermore figures out that it doesn't matter what people say that counts - it only matters what the tape says that counts! Don't waste time trying to figure out why things are happening, only pay attention to what is happening. By the time the reason why becomes known, it will be too late - the move will be over.
This becomes the foundation of his trading system. People such as economists and fundamentalists, who are always trying to figure out the why of something before they make a move, have a hard time accepting this conceptual approach.
Jesse Livermore first tries out his theories in the local "bucket shops" which are stock market betting parlors of the day. He wins so much money that, eventually, they refuse to take his bets.
Barred from the bucket shops, he moves into the real stock market losing at first, until he figures out how to overcome the effect of the time lag between when the order is entered and, unlike the bucket shops, when the order is actually filled.
Nor does Jesse Livermore limit his trading to stocks. He also trades commodities where he accomplishes such feats as cornering entire commodity markets such as cotton and coffee. When asked why, he replies, "Just to see if it could be done." When the President of the United States, on behalf of the commodity exchanges involved, asks what it would take for him to unwind his positions, he replies, "Mr. President, all you have to do is ask."
He makes $3 million dollars in a single day by going short in the crash of 1907. Just to grasp the magnitude of such a trade, by comparison, remember that we're talking about the purchasing power of 1907 dollars. The dollar went a lot further then than it does today, 2007, a hundred years later.
Jesse Livermore doesn't always win. He goes bankrupt more than once. Whenever he invests in private business he always loses every cent. He always manages to find backers that stake him on condition that he engage in the only business in which he is truly expert: the stock market.
He never talks about his trades, before or after.
Because people follow his every move, Livermore masks his moves in complete secrecy. He moves his offices uptown to get away from the crowd and to maintain privacy. He is forced to use as many as 50 brokers at a time in putting on and taking off positions so that no one is able to see the whole picture of his trading activity. Sometimes purposefully losing money just to shake off followers. Each broker sees only a small piece of the puzzle. Everyone is on a strictly "need to know" basis.
His most spectacular coup comes when he, correctly calling the top of the market, puts on massive short positions netting him over $100 million dollars in a single day during the crash of 1929, just as the nation was entering the Great Depression.
People blame him for causing the crash, but it isn't true. Unlike others, Jesse Livermore simply observes what is happening, never mind the why, and follows what he describes as the market's "line of least resistance", by going short.
Eleven years later, in November 1940, Jesse Livermore commits suicide by gun shot. No one knows why. He leaves no note. Some suggest he was losing his touch. Others wonder if the pressure of being blamed for the 1929 crash was too much for him to bear. Who knows?
If Hollywood made such a movie, who wouldn't want to see it?
Why Hollywood never made a movie about this guy, I'll never know. I'd buy a ticket. Talk about rags-to-riches!
A young kid leaves the family farm, mom secretly gives him some traveling money (God bless moms), because he believes there's got to be more to life. Nothing unusual about that, many young people leave small towns or farms for the same reason. Some make it, some don't.
Hitching a ride on a wagon, young Livermore arrives in Boston and, by chance, stops in front of a Paine Webber brokerage office. Livermore wanders inside. It's love at first sight.
It just so happens the brokerage firm needs a "board monkey" to post prices for the customers. Livermore jumps at the chance. So, within hours of leaving the farm, young Jesse has a job, rents a room, and becomes his own man before the age of 15.
His mathematical brain sets to work immediately as the customers yell out quotes in an endless stream from the ticker tape. Before long, Livermore challenges the crowd to yell out the quotes faster. With chalk in hand, brain in high gear, concentration focused, he writes down the numbers faster than the crowd can yell them. Livermore's alive with the challenge.
But Livermore's not just writing down numbers. He's in sync with them, in harmony with them. He soon notices recurring patterns. He keeps a notebook.
He's also sensitive to the crowd. As numbers change and stocks move up and down, so too does the mood of the crowd.
As a stock's volume increases, the excitement level increases. He feels the electricity in the air. He sees their eyes light up as the price increases along with their increased trading. He notices how their personalities change as they spot opportunities to make money (that's called greed).
All of a sudden, the price rolls over and falls - the crowd becomes quiet, sullen, apprehensive (that's called fear).
He notices how the traders talk among themselves, buoying each others confidence, reassuring themselves (that's called denial). Livermore also notices how often their wrong.
Over time, Livermore figures out that it doesn't matter what people say that counts - it only matters what the tape says that counts! Don't waste time trying to figure out why things are happening, only pay attention to what is happening. By the time the reason why becomes known, it will be too late - the move will be over.
This becomes the foundation of his trading system. People such as economists and fundamentalists, who are always trying to figure out the why of something before they make a move, have a hard time accepting this conceptual approach.
Jesse Livermore first tries out his theories in the local "bucket shops" which are stock market betting parlors of the day. He wins so much money that, eventually, they refuse to take his bets.
Barred from the bucket shops, he moves into the real stock market losing at first, until he figures out how to overcome the effect of the time lag between when the order is entered and, unlike the bucket shops, when the order is actually filled.
Nor does Jesse Livermore limit his trading to stocks. He also trades commodities where he accomplishes such feats as cornering entire commodity markets such as cotton and coffee. When asked why, he replies, "Just to see if it could be done." When the President of the United States, on behalf of the commodity exchanges involved, asks what it would take for him to unwind his positions, he replies, "Mr. President, all you have to do is ask."
He makes $3 million dollars in a single day by going short in the crash of 1907. Just to grasp the magnitude of such a trade, by comparison, remember that we're talking about the purchasing power of 1907 dollars. The dollar went a lot further then than it does today, 2007, a hundred years later.
Jesse Livermore doesn't always win. He goes bankrupt more than once. Whenever he invests in private business he always loses every cent. He always manages to find backers that stake him on condition that he engage in the only business in which he is truly expert: the stock market.
He never talks about his trades, before or after.
Because people follow his every move, Livermore masks his moves in complete secrecy. He moves his offices uptown to get away from the crowd and to maintain privacy. He is forced to use as many as 50 brokers at a time in putting on and taking off positions so that no one is able to see the whole picture of his trading activity. Sometimes purposefully losing money just to shake off followers. Each broker sees only a small piece of the puzzle. Everyone is on a strictly "need to know" basis.
His most spectacular coup comes when he, correctly calling the top of the market, puts on massive short positions netting him over $100 million dollars in a single day during the crash of 1929, just as the nation was entering the Great Depression.
People blame him for causing the crash, but it isn't true. Unlike others, Jesse Livermore simply observes what is happening, never mind the why, and follows what he describes as the market's "line of least resistance", by going short.
Eleven years later, in November 1940, Jesse Livermore commits suicide by gun shot. No one knows why. He leaves no note. Some suggest he was losing his touch. Others wonder if the pressure of being blamed for the 1929 crash was too much for him to bear. Who knows?
If Hollywood made such a movie, who wouldn't want to see it?
A young kid leaves the family farm, mom secretly gives him some traveling money (God bless moms), because he believes there's got to be more to life. Nothing unusual about that, many young people leave small towns or farms for the same reason. Some make it, some don't.
Hitching a ride on a wagon, young Livermore arrives in Boston and, by chance, stops in front of a Paine Webber brokerage office. Livermore wanders inside. It's love at first sight.
It just so happens the brokerage firm needs a "board monkey" to post prices for the customers. Livermore jumps at the chance. So, within hours of leaving the farm, young Jesse has a job, rents a room, and becomes his own man before the age of 15.
His mathematical brain sets to work immediately as the customers yell out quotes in an endless stream from the ticker tape. Before long, Livermore challenges the crowd to yell out the quotes faster. With chalk in hand, brain in high gear, concentration focused, he writes down the numbers faster than the crowd can yell them. Livermore's alive with the challenge.
But Livermore's not just writing down numbers. He's in sync with them, in harmony with them. He soon notices recurring patterns. He keeps a notebook.
He's also sensitive to the crowd. As numbers change and stocks move up and down, so too does the mood of the crowd.
As a stock's volume increases, the excitement level increases. He feels the electricity in the air. He sees their eyes light up as the price increases along with their increased trading. He notices how their personalities change as they spot opportunities to make money (that's called greed).
All of a sudden, the price rolls over and falls - the crowd becomes quiet, sullen, apprehensive (that's called fear).
He notices how the traders talk among themselves, buoying each others confidence, reassuring themselves (that's called denial). Livermore also notices how often their wrong.
Over time, Livermore figures out that it doesn't matter what people say that counts - it only matters what the tape says that counts! Don't waste time trying to figure out why things are happening, only pay attention to what is happening. By the time the reason why becomes known, it will be too late - the move will be over.
This becomes the foundation of his trading system. People such as economists and fundamentalists, who are always trying to figure out the why of something before they make a move, have a hard time accepting this conceptual approach.
Jesse Livermore first tries out his theories in the local "bucket shops" which are stock market betting parlors of the day. He wins so much money that, eventually, they refuse to take his bets.
Barred from the bucket shops, he moves into the real stock market losing at first, until he figures out how to overcome the effect of the time lag between when the order is entered and, unlike the bucket shops, when the order is actually filled.
Nor does Jesse Livermore limit his trading to stocks. He also trades commodities where he accomplishes such feats as cornering entire commodity markets such as cotton and coffee. When asked why, he replies, "Just to see if it could be done." When the President of the United States, on behalf of the commodity exchanges involved, asks what it would take for him to unwind his positions, he replies, "Mr. President, all you have to do is ask."
He makes $3 million dollars in a single day by going short in the crash of 1907. Just to grasp the magnitude of such a trade, by comparison, remember that we're talking about the purchasing power of 1907 dollars. The dollar went a lot further then than it does today, 2007, a hundred years later.
Jesse Livermore doesn't always win. He goes bankrupt more than once. Whenever he invests in private business he always loses every cent. He always manages to find backers that stake him on condition that he engage in the only business in which he is truly expert: the stock market.
He never talks about his trades, before or after.
Because people follow his every move, Livermore masks his moves in complete secrecy. He moves his offices uptown to get away from the crowd and to maintain privacy. He is forced to use as many as 50 brokers at a time in putting on and taking off positions so that no one is able to see the whole picture of his trading activity. Sometimes purposefully losing money just to shake off followers. Each broker sees only a small piece of the puzzle. Everyone is on a strictly "need to know" basis.
His most spectacular coup comes when he, correctly calling the top of the market, puts on massive short positions netting him over $100 million dollars in a single day during the crash of 1929, just as the nation was entering the Great Depression.
People blame him for causing the crash, but it isn't true. Unlike others, Jesse Livermore simply observes what is happening, never mind the why, and follows what he describes as the market's "line of least resistance", by going short.
Eleven years later, in November 1940, Jesse Livermore commits suicide by gun shot. No one knows why. He leaves no note. Some suggest he was losing his touch. Others wonder if the pressure of being blamed for the 1929 crash was too much for him to bear. Who knows?
If Hollywood made such a movie, who wouldn't want to see it?
posted by zzzzzzzzzzz at
9:57 PM
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