Jesse Livermore looms both large and tragic among the oracles of finance. He was a pioneer of day trading who grew into a fearless speculator and cycled between immense wealth and utter destitution.

His biography portrays him as much a gambler as an investor. On big bets he often put in every penny, so that he would either win big or lose it all. But his triumphs are the stuff of legend.

Livermore famously shorted the market in 1929, anticipating the Great Crash, and later scooped up cheap stocks, amassing a staggering $100 million. That is nearly $1.5 billion in today’s dollars, and it made him one of the world's richest individuals.

He also shorted Union Pacific railroad stock just before the San Francisco earthquake sent its price plummeting. He had no knowledge of the earthquake and said he didn't know why he was shorting the stock that day. He just felt compelled to.

Despite such moments of unparalleled brilliance, Livermore's journey ended in tragedy: by suicide and broke.

As someone who worked in the market from age 15, he knew every breed of gambler, speculator, and investor. That taught him that the desire for action often undid one's fortunes:

The Wall Street fool thinks he must trade all the time. No one can always have adequate reasons for buying or selling stocks daily.
— Jesse Livermore

Livermore believed the market often punishes activity rather than inactivity. The compulsion to constantly "do something" stems from boredom, anxiety, or a misguided belief that one can create an opportunity. But Livermore said the market doesn't offer compelling trades every hour, or even every day.

Livermore's most poignant realization was deeply personal given his own fate.

“A stock operator has to fight a lot of expensive enemies within himself.”
— Jesse Livermore

For a fascinating deep dive into the mind of this legendary speculator, Edwin Lefèvre's "Reminiscences of a Stock Operator" is indispensable. While Lefèvre published it as fiction, it is known to be Livermore's biography.

The book was a favourite of Marty Zweig, who considered Livermore an inspiration. You can get it for next to nothing as a Kindle book.

(Use the money you save to buy some Berkshire Hathaway.)

Visit www.mydailyoracle.com for more posts on Franklin, Buffett, and other oracles of finance. And watch your inbox for the next post.

Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Please consult a qualified financial advisor before making any investment decisions. Links on this page may be affiliate links, meaning your purchases help support this newsletter. Quotes may be edited slightly for clarity. Images represent our best effort. Copyright © 2025 mydailyoracle.com. All rights reserved.