JESSE LIVERMORE
The greatest stock trader of the early 20th century who made and lost fortunes four times
Made $100 million shorting the 1929 crash — roughly $1.7 billion in today's money — making him one of the richest people in America at 52 years old. Then lost it all. Again. Livermore made and lost fortunes four times over a 30-year career. He was the original Wall Street legend, the man who "broke the Bank of England" before Soros, and the cautionary tale that every trader has taped to their desk. He died broke. The market always wins in the end.
Net Worth
$100 million (1929 peak, ~$1.7 billion today)
Nationality
American
Time Horizon
Swing
Risk Appetite
10 / 10
CAREER & BACKGROUND
Born in 1877 in Shrewsbury, Massachusetts. Started trading at 14 years old in Boston bucket shops — illegal off-exchange betting parlors where kids could wager on stock prices.
He was so good that the bucket shops banned him.
Moved to Wall Street at 20. Made his first million by shorting the 1907 market crash.
J.P. Morgan personally asked him to stop selling short because it was destabilizing the market.
He was 30 years old and already had the most powerful banker in America asking him for a favor.
His greatest triumph: shorting the 1929 crash. While the rest of America was losing everything, Livermore was short the market and made $100 million in a single year.
Adjusted for inflation, that's roughly $1.7 billion. It was the greatest single-year trading profit in history at the time.
COMPANIES & ROLES
Livermore didn't build companies. He traded stocks and commodities from his own account.
He operated from a private office in the Heckscher Building in Midtown Manhattan, with a custom-built ticker tape board and a team of assistants who tracked prices by hand.
He was also a major speculator in cotton and wheat futures. His trading in commodities was so large that he could move markets by himself — which occasionally got him in trouble with regulators and commodity exchanges.
He had no firm, no fund, no clients. He traded his own money.
When he made it, he kept it. When he lost it, he lost everything.
INVESTING STYLE & PHILOSOPHY
Livermore was a momentum trader and trend follower before those terms existed. He developed what he called the "pivotal point" theory — identifying key price levels where stocks would break out or break down.
He'd wait patiently for the setup, then bet big.
He also pioneered the concept of "probing" — taking a small position first, adding to it as the trend confirmed, and cutting quickly if it went against him. Modern traders call this "scaling in."
He was purely technical. He didn't care about fundamentals, earnings, or management.
He read the tape — the stream of prices and volume coming across the ticker. The tape told him everything he needed to know.
THE PLAYBOOK
Risk Approach
Maximum. Livermore used enormous leverage and concentrated positions.
He would put his entire net worth into a single trade if he believed in it. This is why he made and lost fortunes four times — the leverage that created his wealth also destroyed it.
He went bankrupt in 1915, rebuilt, went bankrupt again in the early 1920s, rebuilt again, made $100 million in 1929, and then lost it all through the 1930s. The pattern was always the same: massive wins followed by overconfidence and massive losses.
Money Habits
Terrible with money outside of trading. Livermore lived lavishly — mansions, yachts, a private railcar, expensive women.
He went through money as fast as he made it. He owned estates in Long Island and Palm Beach and maintained an expensive lifestyle even during losing periods.
His inability to live below his means accelerated every bankruptcy. If he'd saved during the good years, the bad years wouldn't have been fatal.
BIGGEST WIN
Shorting the 1929 crash. Livermore recognized the speculative excess of the late 1920s and built a massive short position.
When the market collapsed in October 1929, he made approximately $100 million — more than any other individual trader in history at that point. He reportedly had a team of 50 brokers executing his orders simultaneously.
BIGGEST MISTAKE
Not knowing when to stop. After the 1929 triumph, Livermore kept trading and kept leveraging.
He lost most of his fortune through the early 1930s on bad trades and extravagant spending. By 1934 he was bankrupt for the fourth time.
The market had taught him everything about making money and nothing about keeping it.
FINANCIAL PHILOSOPHY
Livermore believed the market was driven by human emotion — fear and greed — and that these emotions created predictable patterns. His job was to read those emotions through price action and position himself accordingly.
His most famous principles: "The market is never wrong — opinions often are." "It is not the thinking that makes big money, it's the sitting." He believed patience — waiting for the perfect setup — was the most profitable skill a trader could develop.
He also believed that the market would humble anyone who disrespected it. He was living proof of his own theory.
FAMILY & PERSONAL LIFE
Married three times. His personal life was chaotic.
His second wife Dorothy accidentally shot and killed their son Jesse Jr. in a domestic incident (the gun was not aimed at the child).
The family life was turbulent and marked by alcoholism, affairs, and tragedy.
Jesse Livermore died by suicide on November 28, 1940, at the Sherry-Netherland Hotel in Manhattan. He was 63 and deeply in debt.
He left a note that read, in part, "My life has been a failure."
EDUCATION
Dropped out of school at 14 to work at a bucket shop in Boston. No formal education beyond that.
Everything he learned about markets came from watching the ticker tape and keeping price records by hand. He was entirely self-taught.
BOOKS & RESOURCES
The fictionalized account of Livermore's career and is widely considered one of the greatest books about trading ever written. Every serious trader has read it. Livermore also wrote "How to Trade in Stocks" (1940), published shortly before his death, which codifies his trading rules
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QUOTES (6)
A man must believe in himself and his judgment if he expects to make a living at this game.
I know from experience that nobody can give me a tip or a series of tips that will make more money for me than my own judgment.
There is nothing new in Wall Street. There can't be because speculation is as old as the hills.
The average man doesn't wish to be told that it is a bull or bear market. What he desires is to be told specifically which particular stock to buy or sell.
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