New Livermore biography - 10 free review books for T2W members

0007

Senior member
2,376 663
Follow-up review

This is a follow-up to my initial impressions at post #40.

Having had time to read the book in full over the Christmas holiday I can now say that it turned out to be an even more interesting and worthwhile read than I already anticipated. Although comprising 42 chapters this biography basically covers three areas: (1) Livermore's personal life (2) Livermore's trading (3) other financially-related events.

To me as a trader, Livermore's personal life is of least interest – colourful and of a flawed nature, he is rightly portrayed as a philanderer who had a long-term problem with women: nothing unusual about that and probably fairly typical of many people today. And yet, in contrast he always repaid in full his financial debts. Probably the most interesting (as you might expect) is Livermore's trading personality – despite being one of the richest men in America three times over, he comes across as a great risk taker but also very shrewd assessor of the markets. Yet eventually he seemed to lose his prowess. Over the years he gradually became unable to cope and finally gave up in the most permanent of ways. The great attraction for us lesser mortal traders is the hope that we might learn something from him: well, don't over-trade for a start! (Unless of course, you enjoy going from rags to riches and back again). It appears that Livermore was often an inside trader – something not available to most of us (I assume) – and was not afraid to leverage it whenever the opportunity arose.

It's a few years since I read "Reminiscences" by Lefevre (quite an interesting guy in himself it appears) so with a hazy memory of that, some of the lessons I have drawn from this biography might be repetitious. Some uncanny and repetitive thoughts that occurred to me while reading were along the lines of: "I've done that", "that happened to me", "I felt like that" and so on. It's tempting to think that one has the same sort of trading DNA as the great trader himself but on reflection I decided that all human nature is pretty much the same under similar circumstances and that's where the commonality lies. A bit disappointing really, but there you go! All the usual lessons appear in this account: being patient, knowing when to go for the kill, not knowing when to cut a loss and believing you are right when the market is telling you the opposite. However, the most telling one for me was Livermore’s differentiation between what he expected a price was going to do and when it would do it, ie. its timing. It seems that Livermore sometimes had the problem of easily knowing the direction but was unable to pin down the timing – in my experience getting the two right simultaneously is one of the most difficult of trading problems, so it's reassuring to know that one of the world's greatest traders suffered similarly. General opinion is that Livermore offers us many lessons – this book certainly does reinforce that view.

The aspect of the book which surprised me most was my (3) – other contemporaneous financial events. There is interesting coverage of the 1906 and 1929 crashes and some famous names crop up in connection with these and other events. We learn that during the 1920/30s Livermore had a contact in the Bank of England from whom he received extremely valuable insider information via daily telephone calls – albeit at horrendously expensive charges but nevertheless very adequately compensated by correspondingly large profits. No name is mentioned for this contact but it would certainly make an interesting read should the facts ever come to light. The accounts of these financial difficulties resonate with our recent problems in 2008 and brings home the thought that in the financial world (as in many others also) human nature doesn't change and neither do the problems and their solutions. There is a super lesson on solving difficult problems with simple solutions: JP Morgan – called in to sort out 1929 banking crisis had to find a way of dealing with the problem of queues of people wanting all the money out while the bank hadn't physically got enough in hand even though plenty more was on the way – the banks couldn't be seen to run out of money because that would destroy confidence (Northern Rock anybody?). His simple solution: get the cashiers to count out the withdrawals three or four times instead of just the once, thereby slowing up the number of withdrawals but maintaining the confidence of being able to honour all withdrawals. Nice and simple.

This book is full of the sort of stuff any trader who is worth his salt would be interested in and it all makes for a great read. It's got to be essential reading for any wannabe trader unfamiliar with the life of Livermore (just so that they do know the best and the worst in this business) and I suspect almost anybody else with any kind of interest in the financial markets will find something of value.

Highly recommended.
 
Last edited:

Lord Flasheart

Legendary member
9,794 975
Review

If your interest is trading and the stock market then this book is a must have. Similarly if biography's or celebrity culture is your thing, then this guy did it all long before David Beckham and the likes came along. The research and attention to detail that has gone into the chronological timeline while making it smooth to read is incredible.The only negatives are that it can be a little repetitive and heavy going in some areas,but his life did follow a very repetitive pattern and its a lesson we can all learn from.

I love the way that the meetings, phone calls and those involved are portrayed. The words and the pictures give a real feel about who was who and what they were like.
It annoys the hell out of me when publishes group all the pictures together to save costs.If the picture of J. Pierpoint Morgan and others had been in the right place I would have felt like I was at the meeting!!

The similarity in the mistakes that the bankers and politicians made then and what happened in 2007 is uncanny. Don't they ever learn !!!! I could just see Jesse in 2007 thinking the cost of housing is 10 times earnings, 125% mortgages, buy to let,sub prime,etc,etc: I know," I'll sell the **** out of this" Sadly had he spoken to Gordon Brown I'm sure he would have been bigoted off.

The book portrays him as a likable honest kind of guy who always paid his debts. I'm not really sure that was the case. If you look at his family life he comes across as a very shallow person whose friends were his friends through his work and what he could give to them. Had he been around now,he would have been locked up for insider trading and manipulation etc. The book clearly takes the angle that it was others and circumstances that made him turn this way. I guess my head would be messed up with all that money and popularity. He and his family really were the original celebrity dynasty.

From a trading point of view there is nothing here that isnt in "Reminiscences", just the usual lessons we all read about but never follow. Most of the time he was a brilliant economist and trader and yet like all of us we are capable of losing our gains rapidly through ill discipline and emotion.

Recently there has been much said about celebrities,rich people and sports stars about how depressed and unhappy they can be in their lives during and after their careers. The timeline clearly shows his dramatic ups and down and his emotional need to get back what he had. Despite his success and wealth when it came to it he was on his own with little sympathy or help around.

It really is a great read and gives real feeling to Livermore thoughts,emotions and the times he lived in.
 
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Mr. Charts

Legendary member
7,370 1,194
This is a follow-up to my initial impressions at post #40.

Having had time to read the book in full over the Christmas holiday I can now say that it turned out to be an even more interesting and worthwhile read than I already anticipated. Although comprising 42 chapters this biography basically covers three areas: (1) Livermore's personal life (2) Livermore's trading (3) other financially-related events.

To me as a trader, Livermore's personal life is of least interest – colourful and of a flawed nature, he is rightly portrayed as a philanderer who had a long-term problem with women: nothing unusual about that and probably fairly typical of many people today. And yet, in contrast he always repaid in full his financial debts. Probably the most interesting (as you might expect) is Livermore's trading personality – despite being one of the richest men in America three times over, he comes across as a great risk taker but also very shrewd assessor of the markets. Yet eventually he seemed to lose his prowess. Over the years he gradually became unable to cope and finally gave up in the most permanent of ways. The great attraction for us lesser mortal traders is the hope that we might learn something from him: well, don't over-trade for a start! (Unless of course, you enjoy going from rags to riches and back again). It appears that Livermore was often an inside trader – something not available to most of us (I assume) – and was not afraid to leverage it whenever the opportunity arose.

It's a few years since I read "Reminiscences" by Lefevre (quite an interesting guy in himself it appears) so with a hazy memory of that, some of the lessons I have drawn from this biography might be repetitious. Some uncanny and repetitive thoughts that occurred to me while reading were along the lines of: "I've done that", "that happened to me", "I felt like that" and so on. It's tempting to think that one has the same sort of trading DNA as the great trader himself but on reflection I decided that all human nature is pretty much the same under similar circumstances and that's where the commonality lies. A bit disappointing really, but there you go! All the usual lessons appear in this account: being patient, knowing when to go for the kill, not knowing when to cut a loss and believing you are right when the market is telling you the opposite. However, the most telling one for me was Livermore’s differentiation between what he expected a price was going to do and when it would do it, ie. its timing. It seems that Livermore sometimes had the problem of easily knowing the direction but was unable to pin down the timing – in my experience getting the two right simultaneously is one of the most difficult of trading problems, so it's reassuring to know that one of the world's greatest traders suffered similarly. General opinion is that Livermore offers us many lessons – this book certainly does reinforce that view.

The aspect of the book which surprised me most was my (3) – other contemporaneous financial events. There is interesting coverage of the 1906 and 1929 crashes and some famous names crop up in connection with these and other events. We learn that during the 1920/30s Livermore had a contact in the Bank of England from whom he received extremely valuable insider information via daily telephone calls – albeit at horrendously expensive charges but nevertheless very adequately compensated by correspondingly large profits. No name is mentioned for this contact but it would certainly make an interesting read should the facts ever come to light. The accounts of these financial difficulties resonate with our recent problems in 2008 and brings home the thought that in the financial world (as in many others also) human nature doesn't change and neither do the problems and their solutions. There is a super lesson on solving difficult problems with simple solutions: JP Morgan – called in to sort out 1929 banking crisis had to find a way of dealing with the problem of queues of people wanting all the money out while the bank hadn't physically got enough in hand even though plenty more was on the way – the banks couldn't be seen to run out of money because that would destroy confidence (Northern Rock anybody?). His simple solution: get the cashiers to count out the withdrawals three or four times instead of just the once, thereby slowing up the number of withdrawals but maintaining the confidence of being able to honour all withdrawals. Nice and simple.

This book is full of the sort of stuff any trader who is worth his salt would be interested in and it all makes for a great read. It's got to be essential reading for any wannabe trader unfamiliar with the life of Livermore (just so that they do know the best and the worst in this business) and I suspect almost anybody else with any kind of interest in the financial markets will find something of value.

Highly recommended.

This is a brilliant review which is better than anything I could have written and since there is nothing I could add it's pointless posting a review myself.
Well done, 0007 !
Richard
 

tar

Legendary member
10,443 1,313
What would Jesse have made of this SNB situation,easy to read in hindsight, memories of 1992 and Soros

He would have been another Alpari or Fxcm !
 

Lord Flasheart

Legendary member
9,794 975
Thanks 0007 for your initial impressions. We've got a great new review book lined up later this month, so anyone who received the biography please make sure to post your review here to qualify for the next book.

Any news on this Sharky?
 
 
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