Jesse Livermore facts for kids
Quick facts for kids
Jesse Livermore
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| Born |
Jesse Lauriston Livermore
July 26, 1877 |
| Died | November 28, 1940 (aged 63) New York City, U.S.
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| Other names | Boy Plunger The Wolf of Wall Street The Great Bear of Wall Street |
| Occupation | Stock trader |
| Spouse(s) |
Nettie Jordan
(m. 1900; div. 1917)Dorothea "Dorothy" Wendt
(m. 1918; div. 1932)Harriet Metz Noble
(m. 1933) |
| Children | 2 |
Jesse Lauriston Livermore (born July 26, 1877 – died November 28, 1940) was a famous American stock trader. A stock trader buys and sells parts of companies, called stocks, hoping to make money. Jesse Livermore was known as a pioneer in day trading, which means buying and selling stocks very quickly, often within the same day.
He was so good at it that he became the main character in a popular book called Reminiscences of a Stock Operator. At one point, Jesse Livermore was one of the richest people in the world. However, he also lost his fortune several times.
Livermore traded stocks when it was hard to get quick information. He used a method called technical analysis. This means he studied past stock prices and patterns to guess what they would do next. His ideas, including how emotions affect trading, are still studied today.
Some of his trades are legendary. For example, he made money by betting that stock prices would fall right before the 1906 San Francisco earthquake. He also made a huge profit just before the Wall Street Crash of 1929. Some people think he was the greatest trader ever. Others see his story as a warning about taking big risks to get rich quickly.
Contents
Jesse Livermore's Early Life
Jesse Livermore was born in Shrewsbury, Massachusetts. His family was very poor. He learned to read and write when he was only three and a half years old.
When he was 14, his father wanted him to stop school. He wanted Jesse to help work on the family farm. But Jesse had other plans. With his mother's support, he ran away from home to find his own way.
Jesse Livermore's Trading Career
Starting Out in Boston
In 1891, at age 14, Jesse got his first job. He worked at a stockbrokerage firm called Paine Webber in Boston. His job was to write down stock prices on a big board. He earned $5 a week. He made his first trade by buying five shares of Burlington stock for $5.
In 1892, when he was 15, he started betting on stock prices. He used places called "bucket shops." These shops let people bet on stock prices without actually buying the stocks. He bet $5 on a railroad stock and won $3.12.
By the time he was 16, Jesse was earning about $200 a week. This was much more than his job at Paine Webber paid. He was nicknamed "The Boy Plunger" because he was so bold. He quit his job to trade full-time. He even brought $1,000 home to his mother. She thought he was gambling, but Jesse said he was "speculating," which meant he was making educated guesses.
Between ages 18 and 20, he made $10,000 in trading profits. This was a huge amount of money back then. But his winning streak caused problems. Most bucket shops in Boston eventually banned him. He tried using disguises and fake names, but it didn't work for long.
Moving to New York
In 1900, at age 23, Jesse moved to New York City. He arrived during a time when stock prices were rising quickly. He traded successfully, turning $10,000 into $50,000 in just five days.
In 1901, he thought stock prices would fall. He bet a lot of money that they would. But the stock prices didn't update fast enough for him to make good decisions. He lost all his money. He borrowed $2,000 and moved to St. Louis. There, he went back to betting at bucket shops where no one knew him.
His first really big win came in 1901. He bought stock in Northern Pacific Railway. He turned $10,000 into an amazing $500,000.
Big Wins and Losses
In 1906, Jesse was on vacation in Florida. He made a huge bet that a railroad stock, Union Pacific, would fall. He made this bet the day before the 1906 San Francisco earthquake. The earthquake caused stock prices to drop, and Jesse made $250,000.
Later, he tried to buy the same stock. But his friend, Edward Francis Hutton, convinced him to sell his shares too early. Jesse ended up losing $40,000.
During the Panic of 1907, Jesse made $1 million in a single day. He had bet that stock prices would fall, and they did. However, a very powerful banker named J. P. Morgan asked him to stop selling stocks. Morgan was helping to save the entire New York Stock Exchange from crashing. Jesse agreed and then made more money when the market bounced back. His total wealth grew to $3 million.
With his new wealth, he bought a fancy yacht and a private rail car. He also bought a large apartment in New York City. He joined exclusive clubs and lived a very luxurious life.
In 1908, he lost all his money again. He listened to someone who told him to buy cotton, but that person was secretly selling it. Jesse went bankrupt but managed to earn all his money back. In 1915, he went bankrupt one more time.
Later Career and Challenges
After World War I, Jesse secretly tried to control the entire cotton market. This means he bought so much cotton that he could control its price. President Woodrow Wilson found out and called Jesse to the White House. The President asked him to stop, and Jesse agreed to sell his cotton without making a profit. He did this to prevent cotton prices from rising too much. When asked why he did it, Jesse simply said, "To see if I could, Mr. President."
In 1924 and 1925, he made $10 million trading wheat and corn. He also caused a "short squeeze" on the stock of a company called Piggly Wiggly. This is a way of forcing others to buy stock at higher prices.
In early 1929, Jesse made huge bets that stock prices would fall. He used over 100 stockbrokers to keep his actions a secret. At first, he was losing $6 million on paper. But then came the Wall Street Crash of 1929. This was a huge stock market crash. Jesse made about $100 million from it. Newspapers called him "The Great Bear of Wall Street." Some people blamed him for the crash and even sent him death threats. He had to hire a bodyguard.
After 1929, Jesse faced personal challenges. His second divorce in 1932 and a lawsuit affected his mental health. Also, new rules were made for trading stocks in 1934 by the U.S. Securities and Exchange Commission. These rules changed how he could trade. He eventually lost his fortune again and filed for bankruptcy for the third time in 1934. He said he had $84,000 in assets but owed $2.5 million.
In 1937, he paid off a large tax bill of $800,000. In 1939, he started a business to advise people on trading. He sold a system based on his technical analysis methods.
Jesse Livermore's Personal Life
Jesse Livermore enjoyed reading a book called Extraordinary Popular Delusions and the Madness of Crowds. This book is about how people can sometimes act in strange ways when they are part of a large group. His friend, stock trader Bernard Baruch, also liked this book.
Jesse also loved fishing. In 1937, he caught a very large swordfish that weighed 486 pounds.
Marriages and Family
Jesse Livermore was married three times and had two children.
He married his first wife, Nettie Jordan, in October 1900. They had only known each other for a few weeks. Less than a year later, he lost all his money. He asked Nettie to sell her jewelry to help him get money to trade again. She refused, and their relationship was damaged. They divorced in 1917.
In December 1918, Jesse married Dorothea (Dorothy) Fox Wendt. She was a performer in a show called the Ziegfeld Follies. They had two sons, Jesse Livermore II and Paul. Jesse bought a very expensive house and let Dorothy spend a lot of money decorating it. In 1927, their home was robbed at gunpoint. Their marriage became difficult, and they divorced in 1932. Dorothy received $10 million in the divorce. She sold the expensive house for much less than it cost, which made Jesse very sad.
In March 1933, Jesse married Harriet Metz Noble. She was a singer and came from a wealthy family. Harriet was Jesse's fifth wife.
Jesse Livermore's Death
On November 28, 1940, Thanksgiving Day, Jesse Livermore took his own life. He was at The Sherry-Netherland hotel in Manhattan.
Images for kids
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Jesse Livermore, a famous stock trader.
See also
In Spanish: Jesse Livermore para niños
