Jesse Livermore: The Boy Plunger Who Made $100 Million in the 1929 Crash

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While fortunes evaporated in October 1929, Jesse Livermore walked away with roughly $100 million. This episode follows the man often credited with inventing day trading, from a poor Massachusetts farm, where he was born in 1877, to a Boston brokerage where he chalked up stock prices for $5 a week. Watching the numbers all day, he began to see patterns, and at 15 he tested them in the bucket shops, betting parlors that paid out on price moves. He won so steadily that the shops banned him, even when he showed up in disguise.

Wall Street was harder. In 1901 a heavily margined short position wiped him out because the ticker tape lagged behind the trading floor. He rebuilt, profited when the 1906 San Francisco earthquake hammered Union Pacific, and made a million dollars in a single day during the Panic of 1907. But the discipline that governed his trading never reached his private life. Bad tips, a cotton market betrayal, three bankruptcies, and two ruinous marriages trace the path from the great short of 1929 to his suicide in a Manhattan hotel in 1940.

• Livermore's first wager, $5 on the Chicago, Burlington and Quincy Railroad, earned him $3.12, and by 16 he was clearing $200 a week.
• During the Panic of 1907, J.P. Morgan personally asked Livermore to stop short selling because his trades were deepening the collapse Morgan was trying to halt.
• After he quietly cornered cotton, Woodrow Wilson's administration summoned him to the White House, where he explained that he did it to see if he could.
• To hide his bet against the market in 1929, he spread his orders across more than 100 brokers and sat through a paper loss of over $6 million that spring.
• By 1934 he was bankrupt for the third time, with $2.5 million in debts against $84,000 in assets.