📖Jesse Livermore
Value Discipline
Discipline in valuation determines investment success.
Never overpay for a security, no matter how exciting the story. The price you pay determines your return. Discipline in valuation is the foundation of investment success.
🏠 Everyday Analogy
📖 Core Interpretation
In Value Discipline, Jesse Livermore focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：The price paid is the most important variable.
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❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
1929 Market Crash Short (1929)
He built a large short position in leading stocks, patiently ignoring early rallies and public optimism before the October collapse.
✨ Outcome：Profited millions during the crash, showing that patience in a correctly timed position can outperform frequent trading and small gains.
2
Panic of 1907 Cornering Attempt (1907)
Livermore initially shorted the market during the Panic, then reversed to go long when J.P. Morgan stabilized banks, capturing the violent rebound.
✨ Outcome：Closed positions with millions in profit, cementing his reputation as a master of market turns.
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