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Jesse Livermore – Part 1

Jesse Livermore was born in 1877 in Shrewsbury, Massachusetts. He gained fame for his historic trading during the stock crashes of the early 1900s. Follow our posts on the crazy life of this famous trader on the Earn2Trade blog.

 

Livermore’s unique style of trading earned him two nicknames. The first is The Great Bear of Wall Street. The second is the Boy Plunger. They actually have similar meanings. Livermore’s talent for profiting in declining markets is why he was called The Great Bear. The Boy Plunger moniker came about because of his young entry into trading, combined with his love of “plunging” profits out of bucket shops and markets.

 

Livermore was born to a family of farmers. His father wanted him to become a farmer as well, but Jesse wanted no such thing. Instead he left at the age of fourteen and went to Boston to work, equipped only with his mother’s approval and $5 she gave him. He worked as what was known as a “board boy”. This was a job displaying up-to-date stock quotes on a large chalkboard, so customers could view them. Paine Webber, the bank that employed him, paid a modest sounding $5 per week. It gave him more than money, though. He would quickly grow familiar with the trends he saw in stocks. Young Jesse recorded the details constantly in his journal and then would guess at how the stocks would move next. This refined his understanding and kept his skills sharp.

 

It was not long before Jesse had a friend convince him to put some money down on his insights. He went to a “bucket shop” – a place where you could bet on the stock market without actually purchasing stocks. He wagered a week’s pay — $5. This first bet was correct and he profited $3.12 from it. Making 3 days’ wages so easily was a compelling reason to continue. This is just what Jesse did. Only 15 years old, he had already earned $1000, which is over $25,000 in today’s dollars. He was earning more from his bets than his job at the bank. At 16 he left the bank entirely to focus on his market wagers.

 

He did so well at the bucket shops that he was banned from them. He would then use disguises such as a beard to continue betting, but that eventually failed as well. Unphased, Jesse decided to take his fortune and move to New York in 1899. At this point he had amassed $10,000. Quite a large sum for anyone, and certainly enough to begin trading at a higher level.

 

Everything had been going well for Jesse. Clearly he was a prodigy and ahead of his time. The second article will take him through many ups and downs. Check back soon!

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