Comments on: Jesse Livermore is a bad role model for traders http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/ Beauty is in the eye of the shareholder Thu, 08 Jan 2009 20:24:35 +0000 http://wordpress.org/?v=2.6.1 By: Buy Signal Likely; Thoughts on Livermore • DummySpots.com http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-34330 Buy Signal Likely; Thoughts on Livermore • DummySpots.com Thu, 30 Aug 2007 01:38:44 +0000 http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-34330 [...] On another note, Ugly has a post from a few days back called Jesse Livermore is a bad role model for traders. Some interesting discussion in the comments (of course I had to put in my 2c) relating to trading, and more importantly, to depression. Clinically depressed and Bipolar people are often drawn to trading, and it destroys many of them unless they learn to use it as a tool (a mirror, as I’ve discussed before), and not a way to try to “succeed” when what they view as their “failure” is actually coming from the inside. [...] [...] On another note, Ugly has a post from a few days back called Jesse Livermore is a bad role model for traders. Some interesting discussion in the comments (of course I had to put in my 2c) relating to trading, and more importantly, to depression. Clinically depressed and Bipolar people are often drawn to trading, and it destroys many of them unless they learn to use it as a tool (a mirror, as I’ve discussed before), and not a way to try to “succeed” when what they view as their “failure” is actually coming from the inside. [...]

]]> By: 4 Trades Thursday :: Move the Markets :: Entries :: http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-34249 4 Trades Thursday :: Move the Markets :: Entries :: Thu, 23 Aug 2007 21:48:18 +0000 http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-34249 [...] After the recent Livermore smackdown at ugly’s blog, I thought I should re-read Reminiscences of a Stock Operator. So, I picked up a copy today, and will read it over the next couple days. Last time I read it was a long time ago, and I know a lot more about trading now than I did then. It will be interesting to see where my opinion on him ends up now. [...] [...] After the recent Livermore smackdown at ugly’s blog, I thought I should re-read Reminiscences of a Stock Operator. So, I picked up a copy today, and will read it over the next couple days. Last time I read it was a long time ago, and I know a lot more about trading now than I did then. It will be interesting to see where my opinion on him ends up now. [...]

]]> By: ken http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33433 ken Wed, 15 Aug 2007 23:38:24 +0000 http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33433 I don't think many traders would actually consider JL a role model in a strict sense, rather, they are impressed by his market wisdom as told in "Reminiscent of a stock operator." His wisdom and experience were undeniably brilliant, and I think he was respected for that, and only that. He did admit he had discipline problems, and also tended to risk too much, hence the title "the Boy Plunger" on Wall Street. Whether these personal issues were related to his physical illness was unknown. I doubt that any trader really wants to live and trade/risk exactly the way he did, hence your assumption that many consider him a role model may not be correct. Rather, people only "worship" his timeless market wisdom. I have never seen anybody quoting JL with regards to money management or risk taking; these are discipline-related matters, and people know they're not JL's strongest points. I don’t think many traders would actually consider JL a role model in a strict sense, rather, they are impressed by his market wisdom as told in “Reminiscent of a stock operator.”

His wisdom and experience were undeniably brilliant, and I think he was respected for that, and only that. He did admit he had discipline problems, and also tended to risk too much, hence the title “the Boy Plunger” on Wall Street. Whether these personal issues were related to his physical illness was unknown.

I doubt that any trader really wants to live and trade/risk exactly the way he did, hence your assumption that many consider him a role model may not be correct. Rather, people only “worship” his timeless market wisdom. I have never seen anybody quoting JL with regards to money management or risk taking; these are discipline-related matters, and people know they’re not JL’s strongest points.

]]> By: Joe http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33422 Joe Wed, 15 Aug 2007 19:05:15 +0000 http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33422 I once engaged in a heated debate with a friend of mine when I was compiling a list of the greatest "achievers" of all time. I put Bobby Fischer on this list of 200 or so that also included Albert Einstein, Thomas Edison, Alexander the Great, and Rocky Marciano. My friend's argument was that I shouldn't include Fischer because of his declarations against the US following 9/11. My argument then--as now--is that Fischer should be admired for his chess and nothing else. Mental illness has obviously gotten the better of him. I believe that Jesse Livermore should be considered one of the greatest traders of all time. (Arguing who the greatest is would be pointless.) I believe that Livermore broke his rules repeatedly only when he was suffering from depressive meltdowns. I think this is illustrated by the fact that his losses (as best I can tell) were generally slow and gradual and thus caused by a periodical, habitual lack of discipline. This is in contrast to someone like Brian Hunter, who obviously lost very quickly due to simply to poor risk management. Interesting topic... I once engaged in a heated debate with a friend of mine when I was compiling a list of the greatest “achievers” of all time. I put Bobby Fischer on this list of 200 or so that also included Albert Einstein, Thomas Edison, Alexander the Great, and Rocky Marciano. My friend’s argument was that I shouldn’t include Fischer because of his declarations against the US following 9/11. My argument then–as now–is that Fischer should be admired for his chess and nothing else. Mental illness has obviously gotten the better of him.

I believe that Jesse Livermore should be considered one of the greatest traders of all time. (Arguing who the greatest is would be pointless.) I believe that Livermore broke his rules repeatedly only when he was suffering from depressive meltdowns. I think this is illustrated by the fact that his losses (as best I can tell) were generally slow and gradual and thus caused by a periodical, habitual lack of discipline. This is in contrast to someone like Brian Hunter, who obviously lost very quickly due to simply to poor risk management.

Interesting topic…

]]> By: Yo http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33412 Yo Wed, 15 Aug 2007 16:58:01 +0000 http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33412 If you can point to someone that has displayed an admiration for ol' JL's money management skills and his mental makeup, you might have a case. The only admiration I have ever read about the guy concerns his tape reading and market timing skills. If you think there is no separating all other aspects of a person's life from their profession, then just where do you plan on finding this perfect person? As far as I know, there was only one person in history without any skeletons in their closet. He was not a daytrader. If you can point to someone that has displayed an admiration for ol’ JL’s money management skills and his mental makeup, you might have a case. The only admiration I have ever read about the guy concerns his tape reading and market timing skills.

If you think there is no separating all other aspects of a person’s life from their profession, then just where do you plan on finding this perfect person? As far as I know, there was only one person in history without any skeletons in their closet. He was not a daytrader.

]]> By: Will http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33408 Will Wed, 15 Aug 2007 14:31:32 +0000 http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33408 To be programmed from childhood to feel "not good enough" not matter what your accomplishments, to feel the criticism but discount the compliments, to spend a lifetime searching outside yourself for the validation that can only come from inside, to repeatedly get into relationships with users (like Dear Nina) who exploit your weaknesses for their own gain and only leave you feeling more helpless and more hopeless... if you could ask him, his biggest regret would probably be that he waited until 63 to put an end to it. Another failure, in his mind. It's a bitch of a curse to live with. Livermore's personal demons and repeated self-sabotage in no way detract from the value of his skill as a trader and the lessons to be learned from his experience. Using the same logic, would you declare that van Gogh should not be a role model for painters? That Oscar Wilde should not be role model for writers? Bela Lugosi for actors? Thomas Paine for radicals? They all died as penniless, and most as hopeless, as Livermore. Do only the ones who gain and keep their success during this lifetime have something to contribute, or can we learn from someone's brilliance and perhaps cut him a little slack for being a flawed human? To be programmed from childhood to feel “not good enough” not matter what your accomplishments, to feel the criticism but discount the compliments, to spend a lifetime searching outside yourself for the validation that can only come from inside, to repeatedly get into relationships with users (like Dear Nina) who exploit your weaknesses for their own gain and only leave you feeling more helpless and more hopeless… if you could ask him, his biggest regret would probably be that he waited until 63 to put an end to it. Another failure, in his mind. It’s a bitch of a curse to live with.

Livermore’s personal demons and repeated self-sabotage in no way detract from the value of his skill as a trader and the lessons to be learned from his experience.

Using the same logic, would you declare that van Gogh should not be a role model for painters? That Oscar Wilde should not be role model for writers? Bela Lugosi for actors? Thomas Paine for radicals? They all died as penniless, and most as hopeless, as Livermore. Do only the ones who gain and keep their success during this lifetime have something to contribute, or can we learn from someone’s brilliance and perhaps cut him a little slack for being a flawed human?

]]> By: Trading Goddess http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33399 Trading Goddess Wed, 15 Aug 2007 10:45:42 +0000 http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33399 Who is Jesse Livermore? Who is Jesse Livermore?

]]> By: Ugly http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33279 Ugly Tue, 14 Aug 2007 04:17:42 +0000 http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33279 it's interesting to talk about because actually a lot of great traders lost a lot of money at some point and then bounced back but to lose it all and then come back and then lose it again... and to end up with nothing. I just can't consider someone who lost so much money so many times and ended up with nothing a role model for a trader. I at least won't worship him like other traders do. Now what about Steve Cohen? Maybe he is a better role model. Look how well he continues to do with little risk. If he ends up losing it all, will I still think so? Probably not. People are better traders at different parts of their lives, but Jesse Livermore's lack of risk management disqualifies him as a role model for me. Perhaps I put too much emphasis on his suicide, but it is a very sad end. I feel really sorry for the guy. I wish he would've had treatment and lived a happy life. But in regards to the stock market, he lost. It beat him. It gave but it took back and more. it’s interesting to talk about because actually a lot of great traders lost a lot of money at some point and then bounced back
but to lose it all and then come back and then lose it again… and to end up with nothing. I just can’t consider someone who lost so much money so many times and ended up with nothing a role model for a trader. I at least won’t worship him like other traders do.
Now what about Steve Cohen? Maybe he is a better role model. Look how well he continues to do with little risk. If he ends up losing it all, will I still think so? Probably not.
People are better traders at different parts of their lives, but Jesse Livermore’s lack of risk management disqualifies him as a role model for me.
Perhaps I put too much emphasis on his suicide, but it is a very sad end. I feel really sorry for the guy. I wish he would’ve had treatment and lived a happy life. But in regards to the stock market, he lost. It beat him. It gave but it took back and more.

]]> By: Andrew http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33268 Andrew Tue, 14 Aug 2007 01:17:55 +0000 http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33268 I would LOVE to read that 5R book! I would pay a lot of money for it! But agreed, it probably wouldn't sell as well to the general public :) I would LOVE to read that 5R book! I would pay a lot of money for it!

But agreed, it probably wouldn’t sell as well to the general public :)

]]> By: chud http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33267 chud Tue, 14 Aug 2007 01:06:32 +0000 http://www.uglychart.com/2007/08/12/jesse-livermore-is-a-bad-role-model-for-traders/#comment-33267 Do you want to read a book about a guy that consistently turned out 5R weeks always keeping his stops in place; and used the power of compounding to amass a nice enough nestegg for himself that he and his family could live comfortably to the end of his healthy days? Ho hum. A lot of people would happily eat a bullet at 63 for the fame and fortune Livermore enjoyed at times in his life. Do you want to read a book about a guy that consistently turned out 5R weeks always keeping his stops in place; and used the power of compounding to amass a nice enough nestegg for himself that he and his family could live comfortably to the end of his healthy days? Ho hum.

A lot of people would happily eat a bullet at 63 for the fame and fortune Livermore enjoyed at times in his life.

]]>