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Jesse Livermore: The Bear Of Wall Street

Jesse Livermore: The Bear Of Wall Street via Charles R. Morris, The Wall Street Journal

In the 1920s, Jesse Livermore may have been the most famous bear on Wall Street. Because he had started young and more than once wagered his entire capital, he was known as the “Boy Plunger.” He was an early technical analyst, with complex theories about “pivot points” in markets. He made out very well in the long economic boom of the 1920s. By mid-1929 he had some $15 million in capital, and all of his indicators were screaming “sell!” Following his trading formulas, he began to probe for pivot points, using dozens of brokers to conceal his intentions. By September his probes had cost him $6 million. But he stuck to his strategy, and when “Black Monday” and “Black Tuesday” hit in late October, he had short positions worth $450 million.

Trading adroitly into and out of the collapse, he amassed a cash pile of more than $100 million, making him one of the richest men in the world. In “Jesse Livermore: Boy Plunger,” Tom Rubython recounts the life of this remarkable investor, whose market odyssey careened between episodes of near destitution and top-of-the-world gaudy excess.

Jesse Livermore was born in 1877 on a hard-scrabble farm about 40 miles from Boston. He was frail as a child but confident and was considered a math prodigy. When he was 14, he absconded from the farm to Boston. His first stop was at Paine Webber, a pioneer in retail stock brokerage. After demonstrating his math skills, Jesse became a board boy, posting trades and prices on big chalkboards. It was the first time he had seen a ticker tape.............

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Jesse Livermore...