Jesse Lauriston Livermore was a notable North American trader and one of the biggest names in the history of Wall Street who gained fame due to the great profits made mainly during the crisis of 1929. Livermore was born in 1877, in Shrewsbury, in the state of Massachusetts in the United States.
At the age of 14, he left home and managed to get a job at a brokerage in Boston earning a salary of just $ 5 dollars when he started investing in stocks.
Trading on a daily small trades strategy (scalping), before the age of 20, Jesse Livermore had already accumulated and lost his fortune several times. It was when he reformulated his strategy by identifying trends and operating in their favor. With the new way of trading, he again made a lot of money and became one of the wealthiest professionals on Wall Street.
Known as The Big Bear on Wall Street, the trader took his own life on November 28, 1940 after a series of factors and personal problems such as divorce, kidnapping, his ex-wife shooting his son, bankruptcy and expulsion from the Chicago Board of Trade.
His first trade was in 1892, at the age of 15, in a type of establishment that placed leveraged bets on stock prices. He won $ 3.12 on a $ 5 bet.
His first big win came in 1901 at the age of 24 when he bought stock in Northern Pacific Railway. He turned $10,000 into $500,000. In the Panic of 1907, Livermore’s huge short positions made him $1 million in a single day. In 1908 he broke after a long position in cotton. He recovered his capital years later. In 1915, he filed bankruptcy again.
His greatest triumph was in 1929. Livermore opened big short positions during the crisis, he noticed the change from the strong and long upward trend with his tools and technical analysis. He shorted several stocks and the strong bearish movement of the market made him profit approximately $ 100 million (approximately $ 1.5 billion at current values). But the big profits came followed by accusations of market manipulation and a series of death threats that forced him to hire private security guards.
In 2013, Richard Smitten wrote a book which detailed Jesse Lauriston Livermore’s 45 year trading career, heralding him as one of the greatest traders that has ever lived.