Stock trading legend Jesse Livermore made $100 million (the equivalent of $1.5 billion today!) by daring to bet against the market during the Great Depression. But who was this audacious man, and what nuggets of wisdom can we mine from his experiences?
I’ll dive into the top 21 Jesse Livermore quotes in this post to provide deeper insight into his electrifying secrets. His insightful words shed light on trading psychology, risk management, market trends, and much more.
So whether you’re just dipping your toes into trading or navigating the stock market like a pro, Livermore’s wisdom is a treasure trove of practical lessons designed to help anyone become a billionaire.
1. “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 always was my sitting. Got that? My sitting tight!”
Jesse Livermore believed that patience was the golden ticket to his financial triumph. He was a master of the waiting game, holding onto trades with an iron grip and resisting the siren call of constant buying and selling.
His secret? He knew that his big wins didn’t come from a flurry of transactions but from calculated decisions and a steadfast refusal to be swayed by impulsive trading.
Livermore’s sage advice to fellow traders is simple – practice patience, make careful decisions, and curb the urge to gamble on the market. The real wisdom lies in knowing when to ‘sit tight.’ Wait for the right moment to dive into a trade or gracefully exit instead of chasing the elusive quick buck. Livermore himself was a master at identifying pivotal price points, the precursors of a market trend that could be turned into a profit powerhouse.
2. “To anticipate the market is to gamble. To be patient and react only when the market gives the signal is to speculate.”
Jesse Livermore equates market prediction to a high-stakes gamble fraught with risk and uncertainty. His sage advice? Hold your horses! Wait for the market to give you an unmistakable sign.
This, he insists, is not gambling but speculation – a calculated, strategic form of trading. He urges us to base our actions on solid market trends and indicators, not on hasty, knee-jerk reactions.
By keenly observing and decoding market patterns, traders can learn to trim down risks and pump up potential gains. They can steer clear of the pitfall of trying to outsmart the market. Mind you, even Livermore occasionally stumbled on this rule; he frittered away his fortune on a cotton trade, swayed by misguided opinions.
So, take a leaf out of Livermore’s book. Swap the dice-rolling for patient, informed speculation. Let the market guide your actions. And remember, even the best can slip up.
3. “Money is made by sitting, not trading.”
Jesse Livermore believed patience was the secret sauce to successful trading. His mantra? “Money is made by sitting, not trading.” This nugget of wisdom reminds us that the frenzied buying and selling of stocks isn’t the golden ticket to affluence. Instead, it’s the calm, calculated wait for the perfect opportunity that pays off.
That’s why Livermore always traded using high leverage like a seasoned pro. His legendary gamble during the 1907 panic is a prime example. He dared to bet against the market and walked away with a cool $1 million in a single day. Yes, it was a high-stakes game, but Livermore wasn’t one for small, insignificant trades. He bided his time, waiting for the perfect moment to strike.
So remember: trading isn’t about making a flurry of transactions. It’s about making informed, wise decisions. Think of it like a chess game, where every move is deliberate and calculated. This approach is the secret to boosting profits and slashing risks.
4. “Don’t take action with a trade until the market, itself, confirms your opinion. Being a little late in a trade is insurance that your opinion is correct. In other words, don’t be an impatient trader.”
Once again, Jesse Livermore reminds us of this golden nugget of wisdom – patience is the name of the game in trading. He urges us not to jump the gun or let our initial hunches dictate our moves. Instead, he advises us to step back, wait, and let the market validate our ideas. This waiting game, he asserts, is our safety net, our assurance that we’re on the right track.
For traders, this is a game-changer. It’s a call to resist the urge to make knee-jerk decisions. It’s an invitation to let the market be our guide and confirm our assumptions before diving in. This strategy is a shield against hasty and potentially costly trading blunders (something Jesse Livermore knows all about).
But it gets better! You can learn even more about Livermore’s unique risk management strategies via his riveting book “How To Trade In Stocks.”
5. “Wall Street never changes, the pockets change, the suckers change, the stocks change, but Wall Street never changes, because human nature never changes.”
Jesse Livermore argues that the market’s heartbeat remains unchanged regardless of the players, stocks, or circumstances. Why? Because human nature fuels the market’s pulse with its timeless emotions of greed and fear.
So what’s the takeaway for traders? It’s simple. Mastering the art of understanding human psychology is crucial for successfully riding the waves of market trends. Rather than being tossed around by fleeting factors, traders should anchor their strategies on the recurring market patterns and behaviors triggered by immutable human nature.
6. “The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.”
Jesse Livermore, a master of speculation, paints high-stakes investing as an exhilarating yet daunting arena. It’s not a game for the faint of heart or the underprepared. It demands more than just a lust for fast fortunes. Intelligence, mental skill, emotional equilibrium, and a healthy dose of patience are the keys to success. Without these, you’ll likely be on the fast track to financial disaster.
But fear not, aspiring traders! These are qualities that can be honed. It’s time to sharpen your mind, steady your emotions, and learn patience. Remember, this isn’t a sprint to immediate wealth. It’s a marathon of informed, calculated decisions leading to enduring success.
7. “There is time to go long, time to go short and time to go fishing.”
Jesse Livermore once shared a nugget of wisdom that perfectly captures the ebb and flow of trading. He said, “There is a time to go long, a time to go short, and a time to go fishing.”
“Going long” is trader jargon for buying an asset and banking on its value to skyrocket, while “going short” is where a trader borrows an asset, sells it off, and then plans to buy it back when the price dips. And “time to go fishing?” That’s Livermore’s poetic way of saying, “Sit back, relax, and wait for the right moment.”
Livermore’s words are a wake-up call to all traders. He’s telling us not to be trigger-happy with our trades but to be patient and strategic. His quote is a powerful reminder that timing is everything in trading. It’s not about rushing in or forcing trades but reading the market’s mood and acting accordingly.
8. “Without discipline, a clear strategy, and a concise plan, the speculator will fall into all the emotional pitfalls of the market – jump from one stock to another, hold a losing position too long, and cut out of a winner too soon, for no reason other than fear of losing profit.”
Jesse Livermore underscores the critical role of discipline, strategy, and detailed planning in stock market trading. He rings the alarm on the dangers of trading without a solid plan – it’s a surefire way to fall prey to emotional whims, leading to disastrous results. These could range from the panic-induced swapping of stocks, clinging desperately to a sinking stock, or prematurely selling a winning stock, all out of fear.
Livermore’s sage advice? Arm yourself with a systematic approach, make decisions based on solid data, and keep those emotions in check. This nugget of wisdom serves as a battle cry for traders to maintain ironclad discipline and unwavering commitment to their strategy. Why? Because that’s the real secret to long-term trading success.
9. “The stock market is never obvious. It is designed to fool most of the people, most of the time.”
Jesse Livermore explains that the stock market is as unpredictable as a summer storm. It’s a complex beast, not designed for the masses to tame or exploit. It’s always ready to trick investors with deceptive moves, leading them down paths that don’t always end in a pot of gold.
This quote reminds traders not to blindly follow the herd or make bets based on what seems like a trend. Instead, dig deep. Do your homework. Craft a strategy that’s as solid as a rock. And brace yourself for surprises. This approach can help you navigate the market’s labyrinth and maybe, just maybe, come out on top.
10. “Remember this: When you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap benefits from their mistakes.”
Jesse Livermore observed that those traders who are always on the move often mess up, leaving a golden opportunity for the savvy ones who bide their time.
His advice? Don’t leap into trades. Instead, sit back, watch the market like a hawk, wait for others to stumble, and then pounce. This strategy served him well in 1929 when he made his most famous bet against the market, netting him a cool $100 million. That’s a staggering $1.5 billion in today’s dollars!
This nugget of wisdom from Jesse Livermore underlines the power of strategic patience and deliberate action in trading. It’s a stark reminder to resist the lure of hasty decisions.
11. “A prudent speculator never argues with the tape. Markets are never wrong, opinions often are.”
Jesse Livermore insists that market trends, or ‘the tape’, are always spot-on. He warns us not to challenge them. He highlights that our personal hunches or forecasts are often off the mark. His advice? Don’t let your biases steer your trading ship. Instead, anchor your decisions on solid market trends and hard data.
This quote is a wake-up call for traders. It underscores the crucial role of impartiality and data-driven decision-making in the trading game. It urges traders to put their faith in the market’s movements. After all, these trends mirror the collective actions of all players in the market. It’s a stark reminder not to lean too heavily on personal opinions, which can be skewed or biased.
12. “Men who can both be right and sit tight are uncommon.”
Jesse Livermore once suggested that it’s a rare breed who can make the right calls and have the grit to stick with them. In the high-stakes trading world, simply being able to predict market trends is only half the game.
The real challenge? Keeping your cool when the market throws a curveball and holding your ground until your predictions pay off. This isn’t just about having a knack for numbers; it’s about mastering your emotions. It’s about understanding that patience isn’t just a virtue; it’s a strategy.
Legendary stock trader Jesse Livermore urges us to ditch the risky game of trying to time the market perfectly. His advice? “Never buy at the bottom.” This isn’t about pessimism, but pragmatism. Trying to find the lowest possible entry point can lead to a wild goose chase while golden opportunities slip through your fingers.
And what about selling? Livermore’s mantra is “always sell too soon.” This might sound counterintuitive, but let’s decode it. Waiting for the peak might seem smart, but you’re left holding the bag if the market plummets. Livermore’s wisdom nudges us to grab profits when they’re ripe for the picking instead of waiting for a jackpot that may never come.
14. “It is foolhardy to make a second trade, if your first trade shows you a loss. Never average losses. Let this thought be written indelibly upon your mind.”
Jesse Livermore delivers a hard-hitting piece of advice: don’t rush into a second trade if your first one tanked. Why? Because losses aren’t just bad luck – they’re red flags. They’re your trading strategy shouting, “Hey, something’s not working here!”
So, instead of frantically scrambling to make more trades to counterbalance your losses, hit the pause button. Take a step back. Reevaluate your strategy. This isn’t just about damage control – it’s a golden opportunity for growth and learning.
15. “There are times when you should be completely out of the market, for emotional as well as economic reasons.”
Jesse Livermore offers a nugget of wisdom, suggesting that trading decisions should not be purely driven by market fluctuations. For example, he emphasizes the role of emotional stability in making sound trading decisions.
When emotions run high, they can fog our judgment, leading to investment mishaps. Livermore has experienced this firsthand; throughout his life, he’s struggled with countless emotional hardships (divorces, bankruptcies, and loss) and allowed these crises to get in the way of making intelligent trading decisions.
So if you or the market are in a volatile mood, it may be wise to step back to avoid pitfalls. Essentially, Livermore nudges traders to keep a keen eye on their emotional health and the market’s pulse. This balanced approach can pave the way for more informed, less risky trading decisions.
16. “It isn’t as important to buy as cheap as possible as it is to buy at the right time.”
Jesse Livermore once proposed that the timing of a purchase is more crucial than the cost. In the world of trading, snagging the lowest price isn’t always the golden ticket. Instead, it’s about precisely timing your move and aligning your purchase with the market’s rhythm.
17. “Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market your game is to buy and hold until you believe that the bull market is near its end. To do this you must study general conditions and not tips or special factors affecting individual stocks.”
Famed stock wizard Jesse Livermore urges us to ditch the losing game of market timing. Trying to ride every crest and trough? Forget it! Instead, he champions the buy-and-hold strategy during a bull market when prices are on an uphill climb.
Hold on to your stocks until the market gives you a nudge, whispering, “Hey, we’re nearing the peak.” Livermore underscores the importance of being a market scholar, diving deep into the sea of overall market conditions.
Toss out those hot tips or the nitty-gritty details of individual stocks. Instead, focus on the long-haul and keep your eyes on the broader market horizon rather than short-term fluctuations.
18. “When everyone thinks alike, there isn’t much thinking taking place. Get out when you can, not when you have to.”
Jesse Livermore’s wisdom highlights the power of independent thinking and decisive action in trading. His quote suggests that creativity and critical thinking take a backseat when everyone is on the same page. This can lead to market saturation, squeezing the juice out of your profit opportunities.
The second half of his advice? Exit a position when you can, not when you have to. In other words, jump ship at the peak of profitability, not when you’re cornered into a loss. Livermore is essentially giving traders a wake-up call: Don’t follow the herd. Blaze your own trail. Make strategic decisions that strike when the iron is hot to maximize those profits.
19. “Experience has proved to me that real money made in speculating has been in commitments in a stock or commodity showing a profit right from the start.”
Jesse Livermore, the celebrated speculator, firmly believes in the power of immediate profitability. He suggests that investments that kick off with promising returns are more likely to keep the profit ball rolling.
So, what’s the takeaway for traders? Simple! Cherry-pick investments that flaunt early signs of profitability. This smart strategy can shield you from the risks tied to long-term speculation on stocks or commodities that are slow to show returns.
In a nutshell, Livermore’s golden advice is to dive into ventures that bear fruit right from the get-go, rather than playing the waiting game for future profits. This mindset is exactly how he was able to earn a whopping $1 million in just 24 hours.
20. “The average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think.”
Jesse Livermore, the early 20th-century trading maverick, hints that many folks crave a quick fix. The average investor wants to be spoon-fed stock picks, rather than flexing their own analytical muscles. But Livermore, a trailblazer in trend-following strategies, argues this is a flawed approach.
Why? Because it’s lazy. It’s a shortcut. And in the stock market, shortcuts often lead to dead ends. Instead, Livermore champions the idea of self-reliance. He urges traders to roll up their sleeves, dive into market trends, and make their own calls. Bull market? Bear market? You’ve got to figure that out yourself.
So, ditch the easy route. Embrace Livermore’s pioneering spirit. Analyze, strategize, and take control of your trading destiny.
21. “There is only one side to the stock market; and it is not the bull side or the bear side, but the right side.”
Jesse Livermore suggests that trading isn’t about riding the waves of bullish (upward) or bearish (downward) trends. It’s about making smart, well-informed decisions. Don’t let the market’s mood sway you. Instead, zero in on solid analysis and informed choices. The “right side” is all about making the correct calls, no matter what the stock market is doing.
So how can we implement this advice in our trading? Learn to sidestep biases and emotional trading. Focus on research, analysis, and clear-headed judgment. In essence, Livermore’s wisdom underscores the need for strategic, informed trading over impulsive, sentiment-driven decisions.
Conclusion: The Lesson Behind Jesse Livermore Quotes
With these insightful Jesse Livermore quotes, you’re one step closer to mastering the stock market and beating the hot shots at Wall Street. His timeless wisdom reminds us that the average stock trader can earn millions by being a prudent speculator and knowing when to buy rising stocks and sell falling stocks.
The key takeaway? Stay disciplined, pay attention to stock market trends, and only enter carefully calculated trades that promise big money. By absorbing these invaluable nuggets of wisdom, you’ll trade stocks with the precision of a master and amass unbelievable generational wealth.