📖Jesse Livermore
Integrity Above All
Integrity is the most valuable asset.
Reputation takes a lifetime to build and moments to destroy. In investing and in life, integrity is the most valuable asset you can possess.
🏠 Everyday Analogy
📖 Core Interpretation
Jesse Livermore sees markets as cyclical rather than linear. Understanding cycle position improves risk-taking decisions more than trying to call exact tops and bottoms.
💎 Key Insight：Reputation, once lost, is nearly impossible to rebuild.
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❓ Why It Matters
Ignoring cycles repeats the same mistakes: excessive optimism at peaks and excessive pessimism near troughs. Context matters for position sizing.
🎯 How to Practice
Monitor credit, valuation, earnings, and sentiment signals; reduce aggressiveness in euphoric phases and preserve flexibility in fearful phases.
⚠️ Common Pitfalls
Treating short rebounds as full cycle turns
Extrapolating peak conditions indefinitely
Becoming maximally defensive near valuation troughs
📚 Case Studies
1
1907 Panic Short Positions (1907)
Sensing market weakness, Livermore built substantial short positions before the 1907 Panic. As forced liquidation accelerated, prices plunged far beyond typical corrections.
✨ Outcome：He let his winning shorts run during the panic, exiting only after a climactic selloff, earning millions and cementing his reputation.
2
Pre‑Crash Speculative Peak (1929)
Seeing speculative frenzy and weakening tape, Livermore sold short into the 1929 peak rather than argue that prices were irrationally high.
✨ Outcome：Gained a vast fortune during the crash by aligning with the market’s downward move, proving that ignoring the market’s message is costly.
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