Iconic Investor Insight of the week

For the week of July 5th

I’m continuing to have fun recalling quotes from investors that I’ve picked up over the years. Today’s quote comes from Jesse Livermore. Mr Livermore began trading at age 15 in 1892. He was an exceptional market wizard shorting the market in 1906, 1907, and again in 1929. He pioneered the use of technical analysis. He believed a stock needed to be “acting right” before he would buy it. His story is also a cautionary one as well because his excessive use of leverage bankrupted him on three different occasions. The book Reminiscences of a Stock Operator was inspired by Jesse’s life and is a popular read among Wall Street types.

“After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. I’ve known many [traders] who were right at exactly the right time, and began buying or selling stocks when prices were at the very level that should show the greatest profit. And their experience invariably matched mine; that is, they made no real money out of it. [Traders] who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make the big money.”

Jesse Livermore