Tuesday, May 31, 2011

Monday, May 30, 2011

Jesse Livermore

Jesse Livermore
Stock Operator Extraordinaire

Born in 1877 and died in 1940, Jesse Livermore is the greatest trader / speculator who ever lived.  At his peak in 1929, Jesse Livermore was worth more than $100 millions.  He would have been richer than Bill Gates in today's money.  An unseen feat for a self-taugh / self-made stock and commodities trader who ONLY TRADED HIS OWN MONEY, not Other People Money like today investment's superstars.  With Bernard Baruch, he was one of the original trend followers.

Loner, individualist, suffering from severe episodes of depression, probably bipolar disorders who eventually took his life, Jesse Livermore made and lost four colossal fortunes during his lifetime.  Make two of his fortunes during stock market crashes periods, in 1907 and 1929, short-selling stocks.  Which earned him $3 millions in 1907 and $100 millions in 1929.  While everyone was losing their shirt, the astute Jesse Livermore was on top of the world!

Unlike Warren Buffett, Livermore was living the life.  At his peak, he owned a series of mansions in several countries, each fully staffed with servants, a fleet of limousines and Rolls Royce cars (my favorites), yatchs, and regularly threw lavish parties.

Now, here are some investment wisdoms from Jesse Livermore.  
- Emotional control (crucial and vital for any trader and gambler)
- Knowledge of economics and fondamentals
- Trade with the trends (Buy in a bull market and short in a bear market)
- Don't trade when there is no clear opportunities.
- Patience.  Let your profits run.
- Trade the leading stocks in each sector.
- Don't average down a losing position.
- Add to winning positions.
And in my view, the most important...
- Experience.  Learn from your mistakes.

"Wall Street never changes, the pockets change, the suckers change, the stocks change, but Wall Street never changes, because human nature never changes."  - Jesse Livermore

"Successful traders always follow the line of least resistance. Follow the trend. The trend is your friend." - Jesse Livermore

"It never was my thinking that made the big money for me. It always was my sitting." - Jesse Livermore

Friday, May 27, 2011

Titanic Thompson

Titanic Thompson

Titanic Thompson is another well-rounded gambler who bet titanic sums of money on everything.
Born Alvin Clarence Thomas in 1892, nicknamed "Titanic" for the size of his bet or because he sinks everybody, not sure.  He make his living by the road, traveling the country with his golf clubs, a .45 revolver, and a suitcase full of cash.  Winning and losing millions of dollars (an estimated 10 millions dollars) playing cards, golf, dice, horses, pool, horseshoes, and any kind of "proposition bets" you could think of.  He married five underage women and killed five men in self-defense.  What a crazy life!

Hustler, cheater, liar, card shark, con man, dice manipulator as long as he could get the edge.  Titanic Thompson is known as one of the best proposition bettors who ever lived, some said he was "golf's greatest hustler", and many think he is the Greatest Gambler of All-Time. 

Thompson was a self-taught ambidextrous golfer blessed with extraordinary eyesight, hand-eye coordination, and athletic abilities.  He was good enough to turn pro but it didn't sound interesting since the top pro golfers of the era only make $30 000 a year.  And Titanic Thompson could make that much in one week hustling rich country club players.   

The high-roller who out-smarted the smartest, died penniless at age 82, on May 19, 1974, from a stroke in a retirement house.  Hustling till the end, social security checks of other residents were found in his room. 

The man became a legend.  Fictional gambler Sky Masterson from Damon Ruyon's Broadway play and movie "Guys and Dolls" was modeled on him.