Jesse Livermore : What's so interesting

Time Magazine described Jesse Livermore as the most fabulous living U.S. stock trader.

His progress from office boy to Wall Street legend - his trading lessons - his triumphs and disasters - is probably the most fascinating of any of Wall Street's stories.

Even today, many stock and commodity traders owe Jesse Livermore a deep debt of gratitude for sharing his experiences in Reminiscences of a Stock Operator.

The techniques he made public have endured through many decades; his trading rules earned him millions of dollars, provided he stayed faithful to them.

Livermore also lost his entire fortune on more than one occasion, when he ignored his trading rules.

Reminiscences of a Stock Operator - Stock Trading Strategy

In a series of interviews with "Lawrence Livingstone" (a pseudonym for Jesse Livermore) the financial journalist Edwin Lef''vre got to the heart of the strategy and psychology of a master stock market trader. Lef''vre published his interviews in Reminiscences of a Stock Operator. Interviews with Livermore were highly prized because, as far as his market activities were concerned, Livermore was a secretive loner.
To give you a brief taste of where we will go, here are some comments from Jesse Livermore himself:

"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 man of inferior emotional balance, or for the get-rich-quick adventurer. They will die poor."

TEH : No one wants to admit that most of those in markets are speculators. I am a punter and a speculator. I may want to say I am a 'trader' but I am following Jesse Livermore in many ways. Yes, I read him since last year and found that we all 'traders' and 'speculators' alike should have his mentality. I am not sure if I am stupid(only few told me I am stupid), I am not mentally lazy as I do THINK most of the time, I hope I do have inferior complexity and I am not in get-rich-quick adventure.

"...the fruits of your success will be in direct ratio to the honesty and sincerity of your own effort in keeping your own records, doing your own thinking, and reaching your own conclusions."

"There is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again."

TEH : This is a VERY important pointer always in my mind. As history repeats, we should not repeat our mistakes!! I ahve done countless of mistakes, errors, huge blunders etc etc in my trading adveture so far. As markets going to repreat whatever happened before, TECHNICAL ANALYSIS becoming very logical. Hence, last year ... I took TA in more serious manner.
"There are times when money can be made investing and speculating in stocks, but money cannot consistently be made trading every day or every week during the year. Only the foolhardy will try it. It just is not in the cards and cannot be done."

TEH : Agreed. Over-trading is killing most of us, including me. Time to reflect on this issue.
"The point is not so much to buy as cheap as possible or go short at top price, but to buy or sell at the right time."

"I am tired of hearing the public and papers blame Wall Street for parting fools from their money... It's the successful business man who is the biggest sucker of the lot. He has made a fortune in his own line. How? By being on the job for years; by learning all there was to know about it; by taking reasonable chances; by utilizing his knowledge and experience to anticipate probabilities. He wants to increase that fortune at a faster rate and with less effort."

"It took me five years to learn to play the game intelligently enough to make big money when I was right."

TEH : Then, it should take me about 10-15 years to play the game intelligently enough to make it big. I am going to be in my fourth year by end of this year .... way to go. But, I am never stop, never quit ... and will never complain about the long journey.

"Speculation is far too exciting. Most people who speculate hound the brokerage offices... the ticker is always on their minds. They are so engrossed with the minor ups and downs, they miss the big movements."

TEH : So, dont worry about your one stock if it is up or down. It is because when you took the positions, there is no plans at all when to exit and why. As we are so engrossed with our ONE stock, we miss the whole picture of the markets. I am teaching my turtles to look OUTSIDE their stocks. Rather than asking if AMMB will go lower and should you sell your AMMB for a loss, look at overall the whole banking and financial banks all around the world. I did share a post about US, UK and HK listed banks, didnt I?
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I am re-reading Livermore's book - yes, trying to learn from these greats will take a long period of time. Many of things are easier said than done. But it could be done!!

I will like to share more of his 'style' of trading(with my turtles) --- and hopefully, successfully to be applied in our trades.

TEH