📖Jesse Livermore
Inversion Thinking
Invert problems to find insights forward thinking misses.
Instead of asking how to succeed, ask how to avoid failure. Inverting problems often reveals insights that forward thinking misses.
🏠 Everyday Analogy
📖 Core Interpretation
Jesse Livermore advocates a repeatable process: define criteria, execute consistently, and review decisions against evidence. Process quality drives outcome consistency.
💎 Key Insight：Avoiding failure is often more productive than pursuing success.
AI Deep Analysis
Get personalized insights and practical guidance through AI conversation
❓ Why It Matters
Without process, there is no reliable feedback loop. Structured execution and review improve decision quality over time.
🎯 How to Practice
Run a decision loop of research, thesis, execution, and post-mortem; document assumptions and update playbooks with evidence, not hindsight bias.
⚠️ Common Pitfalls
Having opinions without execution criteria
Reviewing outcomes but not decisions
Abandoning rules during volatility spikes
📚 Case Studies
1
Livermore Short Before Crash (1929)
Livermore shorted leading stocks as the 1929 bubble peaked. When some positions initially moved against him, he refused to add to losers, keeping risk capped.
✨ Outcome：Market crashed, his existing shorts paid off massively, validating not averaging down into a rising market.
2
Long-Term Capital Management (1998)
LTCM kept averaging down on converging bond trades that moved against them after Russia’s default, increasing leverage as prices fell.
✨ Outcome：Positions collapsed further, margin calls mounted, and the fund required a Fed-brokered bailout, illustrating the danger of averaging down.
See how masters handle real scenarios?
30 real investment dilemmas answered by legendary investors
Explore Scenarios →