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Jesse Livermore – Part 2

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2 minute read

Jesse Livermore was ready to challenge himself in New York. This is the time in his life when his wild side started to show. He had the heart of a gambler and the mind of a statistician. The former gave him great passion and occasionally caused big trouble.


In the first year in New York, he met a woman and quickly got into a serious relationship. Her name was Nettie Jordan, and they married within weeks of meeting.


When his trading had some terrible reverses soon after this, he lost everything he had. This was the first bump in the road for Livermore, and it was a big one. He asked his new wife to pawn the large amount of jewelry he had bought for her. Nettie refused, which put them at odds. After only a few months together, they separated (though did not divorce until later).


From here Jesse travelled to St. Louis and went back to his bread and butter: betting at the bucket shops. They soon identified him and would not take his bets. He had a person place his bets for him, and soon he had another small fortune of $5000.


This money let him return to New York to try again. At age 24 he would turn this stake into $50,000 during the bull market of 1901. Again Livermore lost it all trading cotton.


At this point he was trying to trade conservatively because he didn’t want to lose his stake again. As an example, he claimed to only profit $2000 when he could have made $20,000. By 28 he had $100,000 to his name. Despite his success he still didn’t feel comfortable in his strategy because of the ups and downs.


Oddly enough, a trip to Palm Beach really helped him at this point. He had a hunch, unlike any other in his life, and he followed it. It was a strong feeling that it would be good to short Union Pacific stock. This was an odd idea to have because their stock was rising strongly. After this Union Pacific was heavily affected by a significant earthquake in San Francisco. This caused the stock to drop substantially, and Livermore made $250,000. He could have made even more than this, but was sticking to his cautious ways to bank his gains. Despite the caution, this was a truly huge sum for the time, and would set him up for the next stage of his life.


Come check back soon to hear more about Livermore’s journey. The next step for him is the Panic of 1907. New York almost fell apart and Jesse was there to position himself properly at every moment.

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