jesse livermore the boy plunger

Jesse Livermore: What an Investor Can Learn

Jesse Livermore is considered one of the greatest traders in American history. Born in 1977 Massachusetts, Jesse traded his way from humble beginnings to become, at one point in history, one of the richest men in America. Jesse was known for wild swings in his wealth, gaining and losing entire fortunes multiple times throughout his life, until his death by suicide in 1940.

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Jesse Livermore is known for many quotes and principles of trading that stand true after nearly 100 years. One of Jesse’s principles of wealth had to do with what we preach here, picking the right side of the market and sitting tight.

 “After spending many years m 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 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 . I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped 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.”

Jesse ultimately lost his fortune when he stopped following his own advice and took a tip from another trader, then sat in the losing position for too long. He rode this bad position to bankruptcy. This would be his first of three bankruptcies, with the final one contributing to his suicide in 1940.

This book is full of relevant tropes about long term investing and holding through instability, rather than faltering and churning your own account. Highly recommended for the buy and hold investor looking for long term capital accumulation.

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