📖Jesse Livermore
Business Moat Assessment
Identify sustainable competitive moats before investing.
Before investing, identify the moat — the sustainable competitive advantage that protects the business from competitors. No moat means no long-term edge.
🏠 Everyday Analogy
📖 Core Interpretation
Jesse Livermore emphasizes durable business quality over short-term noise. A strong model, real competitive edge, and disciplined capital allocation matter more than quarterly excitement.
💎 Key Insight：Moats protect earnings from competitive erosion.
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❓ Why It Matters
Without business-quality filters, investors drift toward stories rather than economics. Durable cash generation is what supports long-term valuation.
🎯 How to Practice
Use a checklist covering moat, management, unit economics, and capital allocation; track long-term cash generation instead of quarter-to-quarter noise.
⚠️ Common Pitfalls
Buying narratives instead of cash-generating economics
Overreacting to short-term operating noise
Ignoring management quality and capital allocation
📚 Case Studies
1
1907 Panic Bear Raid (1907)
Seeing repeated failure of rallies and persistent selling pressure, Livermore judged the line of least resistance to be downward and aggressively shorted stocks during the 1907 Panic.
✨ Outcome：Earned several million dollars, reinforcing his principle to follow the market’s dominant trend, not opinions.
2
Panic of 1907 Short Selling (1907)
Livermore recognized extreme speculation and shorted leading stocks into the 1907 panic, sizing positions aggressively but within his emotional tolerance.
✨ Outcome：Profited millions, reinforcing his belief that self-knowledge and emotional control are crucial to riding major market moves.
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