Life and times of
JESSE LIVERMORE
WORLD'S GREATEST TRADER

by RICHARD SMITTEN


"Secrets of Livermore's life, techniques, and principles never before revealed-more of today's top traders use Livermore trading principles than any other method. A Wall Street legend who lived a Greek tragedy life"


In 1923, seven men who had made it to the top of the financial success pyramid met together at the Edgewater Hotel in Chicago. Collectively, they controlled more wealth than the entire Untied States Treasury, and for years the media had held them up as examples of success.

Who were they? Charles Schwab, president of the world's largest steel company; Arthur Cutten, the greatest wheat speculator of his day; Richard Whitney, president of the New York Stock Exchange; Albert Fall, a member of the President's Cabinet; Jesse Livermore, the greatest bear on Wall Street; Leon Fraser, president of the International Bank of Settlement; and Ivan Kruegger, the head of the world's largest monopoly.

What happened to them? Schwab and Cutten both died broke; Whitney spent years of his life in Sing Sing penitentiary; Fall also spent years in prison, but was released so he could die at home; and the others- Livermore, Fraser, and Kruegger, committed suicide.

--Donald McCullogh, Waking From The American Dream

 SELLING SHORT
 

"The three steps of a short sale are defined:

  • As a sale of stock you don't own, in anticipation of a drop in price.
  • Stock is borrowed from your broker for delivery to the purchaser.
  • Later, stock is purchased in the open market and returned to the broker to complete the transaction.

In other words, the stock is sold first then bought later, at hopefully a lower price. This is the reverse of a normal buy-first, sell-later transaction."

Louis Smitten-Speculator
 
  CONTENTS

CHAPTER 1-1929-Livermore lives up to reputation as: "The Great Bear of Wall Street"

CHAPTER 2-The Back story-Running away from home--Banned in Boston Bucket Shops

CHAPTER 3-Gets a stake-Feels the San Francisco Earthquake rumble in New York

CHAPTER 4-Calls the Crash of 1907-J.P. Morgan asks a favor to save the stock exchange

CHAPTER 5-Lives it up in Palm Beach-Falls under the thrall of the Cotton King-goes bust

CHAPTER 6-World War I-gets back on his feet-falls in love

CHAPTER 7-Marries beautiful showgirl-builds his mansion--perfects his market theory

CHAPTER 8-Leads some stock pools-builds his fortune-slips past several major scandals

CHAPTER 9-Stick up at the Livermore mansion-"Boston Billy" robs from the rich

CHAPTER 10-The dark clouds gather as things get too good-The Crash of 1929

CHAPTER 11-Livermore evolves market timing secrets when to hold 'em when to fold 'em

CHAPTER 12-The Livermore "Money management" rules are born

CHAPTER 13-Livermore loses love of his life-divorce-desolation-despair--his luck sours

CHAPTER 14-The Ziegfield Follies girl, Dorothy, shoots Jesse Livermore Jr., their son

CHAPTER 15-The grim reaper raises his ugly head-death knocks on the door, three times

CHAPTER 16-Addendum: Trading Manual--Livermore laws and trading secrets revealed

  JESSE LIVERMORE--WORLD'S GREATEST STOCK TRADER

  CHAPTER ONE


Chaos is come again" Othello-Shakespeare

October-1929

"Early on the morning of Tuesday October 29th the canyons of Wall Street were thronged with thousands of excited thrill-seekers who had come to witness the anticipated carnage. Policemen on horseback and detectives in uniform attempted to keep the mob clear of the entrance to the New York Stock Exchange, but it was no use; every time they succeed in opening a pathway, the jostling crowd immediately closed ranks again.

Inside, on the floor of the exchange, one could actually feel the tension and fear in the air as the hands of the clock crawled toward 10:00 and the opening gong. Less than a week earlier on Black Thursday, the stock market had suffered the most disastrous decline in its history, and the staggering plunge of prices on the following Monday afternoon had only increased the prevailing sense of panic.

In broker's rooms across the country, investors visited nervously and coughed and shifted their feet as they stood and stared in hypnotic fascination at the silent stock ticker, the mechanical courier that would soon deliver, with cold indifference, a verdict of survival or-more likely-utter ruin."

The Crash of 29 -William Klingaman

On that same morning of October 29th, at exactly seven-twenty, not seven-nineteen, or seven twenty-one, Jesse Livermore stood at the massive entrance to his twenty-nine room mansion in Sand's Point, Long Island, waiting to see the "flying maiden" hood ornament on his black Rolls Royce. The chauffeur knew the drill, he had to be entering the driveway at precisely seven twenty. Jesse Livermore was a precise man.

The light gray mist-fog wafted in from Long Island Sound. It accentuated the cold air, the change of seasons; it added an ominous, chilling feel to the air. The car rolled down the long circular drive at precisely seven twenty and stopped in front of him. He nodded silently at the chauffeur, opened his own door and slipped into the back seat. The newspapers were folded under his arm. He placed them on the leather seats as he did every morning: The New York Times, The London Times, The Wall Street Journal. He glanced at the headlines again; they were basically all the same-"Stock Markets Plummet Throughout The World."

As the car made its way down the driveway, he clicked on his reading lamp and pulled the side-window curtains closed. He wanted to study the newspapers in dark silence. There were no surprises in these newspapers for Jesse Livermore. In fact, he had been waiting for these very headlines for almost a year now. He had planned carefully for this day, and he had been patient.
When the car crossed into Manhattan the driver did not drop the window between them. He used the microphone. "Mr. Livermore, we've passed into Manhattan. You asked me to tell you."
Livermore pushed open the thick black window curtain and let the light of the risen sun stream into the darkness of the back of the limo. He thought about telling the driver to drive down to Wall Street so he could see, could feel, the atmosphere in the Wall Street canyons.

But that might somehow affect the way he played it from here on out, effect his emotions, his objectivity. Was this the bottom, was it just a pause in a steep decline, would confidence in the market return, and stop the free-fall? Should he cover his short positions. His fortune would rest on the answers to these questions, and he had long-ago realized that it was what people did in the stock market that counted--not what they said they were going to do.

Some people might want to see the human chaos, despair, feel the desperate financial pandemonium that occurred when the fear-devil rose up and conquered the greed-god that had appeared up-to-then so strong and indestructible, and had prospered and ruled for many years now.

But not Livermore, he wanted to stay untouched by these human reactions. He would be able to see everything clearly, soon enough. He would listen to the quiet clicking verdict of the ticker tapes in his offices when the market opened for trading.

He slid the black curtain back across the window, and began to study the newspapers again in the darkness. He spoke without looking up. "No, Harry, we'll go straight to the office."
Livermore exited his car on 730 Fifth Avenue, the Hecksher Building. He stepped into the private express elevator that stopped on the 18th floor, the penthouse floor. Livermore demanded a straight-shot to his office. He choose not to speak with anyone, if he could avoid it.

Before the automated traffic light system had been installed, a New York City policeman would sit in a booth and man the lights. When the Livermore limousine approached, the policeman would make sure the light was green for "Jesse Livermore" so he would have no interruptions on his journey from King's Point, Long Island to New York.

Once a week , Harry the chauffeur, would re-trace the route stopping at each traffic light booth where he would pass out a cash gratuity to the policeman in charge, for his kind consideration in making sure the "financier" always had a green light when he passed their booth. Jesse Livermore was a precise man.

Jesse Livermore entered his office. There was no name on the door. He opened the door with his key and entered the small waiting room, an ante-room where Harry Edgar Dache' normally sat during office hours. It was difficult getting past Harry who was six foot six, two hundred and seventy five pounds, and considered by the press to be "pug-ugly" and not very friendly.

The office was empty. Livermore was always first to the office. He opened the second door with a "special key" kept in a safe in the office. Only he and Harry had the safe combination. Even the cleaning people were supervised by Harry when they were cleaning the Livermore offices. These offices were considered to be the most palatial offices in New York City, with hand-carved arches, custom bookshelves, the walls paneled in beautiful mahogany and carved oak. He had first seen the paneling in the library of an old English manor house. He had paid to have the paneling dismantled and shipped to New York, where it was reassembled into his offices.

The offices consisted of an anteroom, and once past the anteroom there was the trading room with a green chalk board and walkway for the "board men" that covered the length of the entire wall, next was a conference room, and finally Livermore's huge office. The chalk board was visible from all the rooms.

He usually had six employees, board men, plus Harry. The primary job of his employees was to post stock quotes on the green chalk boards that stretched the length of the office area. Harry Edgar Dache' oversaw all activities in the office, and did whatever else he was asked. The "board men" were sworn to secrecy and paid well. The rule in the offices was: "no talking during market hours". Livermore wanted no distractions while the market was open. The quotes had to be posted immediately, and accurately-millions were riding.

There were several ticker tape machines in each room. He was never out of arm's reach of a stock ticker. The snaking tape was like the blood that poured through his veins. It was life itself. There were ticker tapes in the main rooms of all his homes, Lake Placid, Long Island, the Manhattan apartment, the suite of rooms in the Breakers Hotel in Palm Beach--even on his three hundred foot yacht.

He was being blamed for this calamitous crash, personally blamed for initiating the decline, the precipitous free-fall, which now seemed to have no bottom. He believed that business, in his case the stock market, was like a war. In a war you got killed if you made a mistake, in the business Jesse Livermore was in-when you made a mistake you could go broke very fast, you could get killed, financially, in a heartbeat.

He was a serious man and today he set about to do some serious business. He was impeccably dressed, as he was everyday, in a hand made suit from Saville Row in London. His shirts were the latest style made of the finest Egyptian cotton, monogrammed on the cuff. His suit hung perfectly from his slim frame. His blond hair was combed back, parted on the left side, his silk tie subtly striped to blend in with his suit. He used pince-nez glasses which were perched on his nose. He wore a vest with a gold chain that spanned the pockets. On one end of the chain was a thin gold pencil, on the other end hung a small golden pen-knife. He often fidgeted with the pen or the knife, spinning one or the other, while he was talking.

He read the numerous New York Times articles that he had saved from the recent editions, all the papers were blaming him for the crash. He was the most famous bear on Wall Street, a man who was as likely to sell short as to buy long. He didn't care, he knew that stocks went down as often as they went up, only when they declined they did it twice as fast as when they went up, and that's what was going on today.

He had a line out at the present time of over a million shares, well over a hundred million dollars. It had been placed months ago, slowly, secretly, and silently, using over two hundred stockbrokers, so nobody could tell what he was doing. He was short the market, he had sold stock that he would later supply, at a much lower price. He was living up to his reputation as the "Great Bear of Wall Street".

Today, he was like a lone wolf stalking the arctic tundra, looking for prey. And looking out for predators that might kill him. There were plenty of Wall Street players he knew who could do just that-end his financial life with one deadly hammering blow.

He picked up New York Times article he had saved and read the headline. He was careful not to gloat, there was no one who knew better than Livermore how fast things could change in the stock market:

NEW YORK TIMES-October 20, 1929

STOCKS DRIVEN DOWN IN WAVE OF SELLING

In the two hours in which trading was limited on the New York Stock Exchange active issues passed through one of the wildest breaks in history. Final quotations revealed net losses ranging from 5 to 20 points and the aggregate depreciation in open market values was estimated at $1,000,000,000 (one billion) or more

The total turnover was 3,488,100 shares which represented the second heaviest volume for a Saturday since the Stock Exchange was established. During the first half hour trading was at a rate of more than 8,500,000 shares for a full five-hour day. The stock market community did not know until an hour and twenty-three minutes after the 12 o'clock closing gong what the final prices were, so late was the overburdened ticker.

PIVOTAL STOCKS HIT

One of the stories which gained wide circulation wherever stock market tickers clicked yesterday was that Jesse L. Livermore, formerly one of the country's biggest speculators, is the leader of the bear clique that has been hammering away at the market for weeks, and that the particular weakness which developed in high priced and pivotal stocks was to be attributed, in part at least, to his activities.

Arthur W. Cutten of Chicago, the recognized leader of the bull party, watched the ticker from his hotel in Atlantic City yesterday and told close friends that nothing has developed to change his opinion about the market - that good stocks would eventually sell higher.

Reports of a struggle between Livermore and Cutten for stock market supremacy, which have circulated widely in Wall Street for the last three or four days, were discredited. Livermore is presumed to be heavily short of leading stocks and Cutten heavily long of the same group of issues. The ascendency of Livermore to the position he once held as the country's leading market operator on the Bear side, after several years of eclipse, is one of the most interesting developments in the market.

The short selling which it was generally agreed was the principal factor in today's decline, served to induce further liquidation of stocks and the cumulative effect was reflected in a demoralized market in certain issues. It was plain that the market was receiving no organized support. Stocks which ordinarily have powerful backing were allowed to shift for themselves.
With stocks driving higher during the last few months following each downward reaction, the situation was ready made for Livermore. The Street stories are that he went short of a large line of issues such as:- United States Steel, Montgomery Ward, Simmons Co., General Electric, American and Foreign Power and half a dozen other of the markets pivotal issues. He then started his familiar hammering tactics under which the market first faltered, then broke.

Cutten, the Fishers, Durant and others of the group known in Wall Street as the "Big Ten" were large holders of these particular stocks and have seen their plans and pools wrecked by what were natural economic developments, coupled with much shrewd short selling.

One of the tales started and circulated in the financial district yesterday, was that Livermore had the backing in a bear campaign of Walter P. Chrysler, who was said to be piqued because he suspected that the Chicago-Detroit group had hammered at Chrysler motors in the market, driving it down below 55 from its high of 135 this year.

The outstanding Bear leader appears to be Livermore, who has regained a tremendous fortune through adroit short selling, and who, temporarily at least, is regarded as being exactly "right" on this market. Cutten, who started as a grain trader, has amassed an estimated 100 million or more, in the stock market during the last three years of bull markets. Cutten is the leader of the bull faction and is temporarily at least regarded as "wrong" on the market.

Mr. Cutten was in New York and watched the market from the office of the head of the stock exchange. His expressed opinion to friends is that much of the selling had been hysterical, and that he believes good stocks should be held for higher prices. He has not changed his formerly stated position about the long distance outlook. Neither has he made any statement about the market for publication. Naturally they have nothing to say about their market positions at the moment or what they have been doing in recent days."

(In the same Times article)

"LIVERMORE IN BEAR DRIVE--WALL STREET
HEARS OF "COMEBACK" BUT DISCREDITS
TALK OF WAR WITH CUTTEN

Jesse L. Livermore who has been in eclipse, so far as stock market operations are concerned, for several years, has made a smashing comeback, if Wall Street reports are true. The comeback of Mr. Livermore as one of the foremost market players is another Wall Street wonder. As a boy he was a board marker in Boston brokerage houses where he developed such skill at tape reading that, despite limited capital he was barred from every bucket shop in New York and Boston. This gave him the nickname that has stuck to him through later years of the "Boy Plunger".

Coming to New York and playing the markets skillfully after long series of ups and downs he struck an extended winning streak and made a fortune of many millions. It is reported that in the current bull market he decided that stocks were too high and guessed wrong. The continued advances of such issues as General Motors, Steel, General Electric and others is said to have taken back a large part of his fortune. He was short of them all and covered time and time again. It was reported in the financial district that he was down to his large irrevocable annuities, of which he has several for himself and his family, acquired during years of earlier prosperity.

Arthur Cutten, Livermore's rival, might be mistaken for a country store keeper. He cares nothing for conventions, appearances or customs. Shy, quiet and un-assuming, he has many times sat back in the corner of a Pullman smoking room and heard casual travelers discuss his stock market feats without disclosing his identity. When not attending to his businesses, he is a gentleman farmer on his estate near Chicago.

On the other hand, Livermore is the fastidious, well dressed man of the city. Slight and blond, and he wears his dark clothes well, rides in Rolls-Royce cars, maintains a retinue of servants, half a dozen places of residence and probably the most luxurious offices in New York located atop the Hecksher Building.

Temperamentally, the two are entirely unlike. Cutten is calm, slow of speech and not at all impetuous. Livermore is quick, nervous and excitable, given to superstitions, but willing to bet his last nickel if he thinks he is right. Livermore has been down not once, but half a dozen times. Cutten at least in the last years, has typified the bull market.

The markets of the next month or so are likely to prove wildly exciting affairs, because of the direct pull and haul against each other of a wide variety of economic factors, all of them powerful. It is now pretty certain that when stocks go up, Mr. Cutten will be there helping them along. It is equally certain that when they decline, Mr. Livermore will be in the market hammering away. There is however no personal battle between them"

END OF TIMES ARTICLE
"Humph-it's never personal!" was uttered from Livermore's lips as he finished the article and placed it down on his desk. He and Cutten had often been trading adversaries for years now, since they had been young men buying and selling commodities in the Chicago Grain Pits.

The phone rang and Livermore signaled to his assistant, Harry Edgar Dache', who had just arrived, that he would answer.

"Hello."

"This Jesse Livermore?"

"Speaking."

"You bastard, you goddamn bastard, Livermore. This is your doing and you are going to pay. I'm broke thanks to you, no I'm more than broke. I owe my broker thousands of dollars of margin money, but I still got my goddamn gun. I'm headed down there to blow your goddamn brains out. Next time you answer your door I'll be standing there and the next thing you know you'll be walking through the gates of hell-which is where you deserve to be. You miserable son-of-a-bitch."

Livermore slammed the phone down. It was these articles, picked up by every paper in the United States, blaming him for the "crash". It wasn't him. He wasn't that powerful, no man was, not even the men from the great House Of Morgan. But that wouldn't stop the public from thinking he triggered the crash and was driving it down by selling, selling, selling. He needed a plan. He had called the Times and given them an interview. But it had not worked-people were still blaming him, calling him, threatening him. He re-read the interview he had given to the Times.

NEW YORK TIMES-October 22, 1929

LIVERMORE NOT IN BEAR POOL
Says it is Foolish to Think that any One Man can Sway Market

Jesse L. Livermore, who has been widely reported in Wall Street to have been heavily short of the market on the present break, and to be the leader of a bear pool, denied yesterday any connection with such a pool.

Mr. Livermore's statement, issued from his offices at 730 Fifth Avenue, follows:

"In connection with the various reports, which have been industriously spread during the last few days through the newspapers and various brokerage houses, to the effect that a large bear pool has been formed, headed by myself and financed by various well known capitalists; I wish to state that there is no truth whatever in any such rumors as far as I'm concerned, and I know of no such combination having been formed by others.

What little business I do in the stock market has only been as an individual and will continue to be done on such a basis.

It is very foolish to think that any individual or combination of individuals could artificially bring about a decline in the stock market in a country so large and so prosperous as the United States. What has happened during the last few weeks is the inevitable result of a long period of continuous, rank manipulation of many stock issues causing their prices to rise many times above their actual worth, based on real earnings and yield returns.

The men who are responsible for bringing about these fictitious prices are the same men who are directly responsible for what is happening in the stock market today. It is unfortunate for the general public when such a condition arises that real sound investment issues have to suffer along with the readjustment of issues of least merit.

If anyone will take the trouble to analyze the selling prices of different stocks as for instance, United States Steel, which is selling around eight to ten times its current earnings, many other issues must look, and have looked for a long time, as selling at ridiculously high prices.

The Federal Reserve Board through its various warnings and many expressions from very high banking authorities could not stop the market from going up, so it must be plain and seem utterly ridiculous for any sane person to presume that one lone individual could have any material effect on the course of the prices of securities."

END OF TIMES ARTICLE
"Fools." he mumbled. "Fools, to think I could have brought an entire market to its knees. Impossible!"
Perhaps Livermore was part of the trigger mechanism, but it was a pregnant situation. Wild speculation always eventually brings the market to its knees. He had been trading for 35 years, since he was fourteen years old; millions of dollars had been made and lost by Livermore. It was 1929, and he was at the height of his power.

Livermore pondered the situation carefully. The threatening phone calls had shaken him. He was well aware of the deep psychological wounds that a loss in financial fortune could cause. He had been through them himself, many times in his career. He would have to make another statement, and quickly-his family was also in jeopardy. They had been threatened before.

These thoughts went through his head as he waited quietly by the ticker tape which sat on top of his massive desk. The mahogany desk was clean except for the brass based stock ticker, a single pad of paper, a pencil, one mahogany "in" and one mahogany "out" box.

The office was staffed now. Six men up on the boards wearing alpaca jackets so they wouldn't smear the chalk symbols. They each wore earphones and had a mouthpiece. They were connected directly to the floor of the New York Stock Exchange. Each had a domain of stocks or commodities to administer. The ticker began to click, and spit out its white snake skin made of a strip of paper with perforated scales, the symbols of most of the companies in the United States. These stock-symbols represented much of the wealth of the country.

For Livermore it was like reading the newspaper. He knew all the symbols by heart, and he had an exceptional mathematical brain that could remember all the quotes, like a good bridge player can remember all the cards that have been played. To be doubly sure, he watched his board men, under Harry's supervision, as they begin to move, filling the length of the chalkboard with trades. Today he concentrated on the "Livermore stock holdings"-as they occurred. Livermore could look up at the board and instantly calculate to the dollar where his overall portfolio-account stood. There was silence in the office; only the sound of the chalk sticks on the boards. There was always silence when the market was open in the Livermore trading room. There was no need for idle chatter when the market was open, and all the board men knew it.

Today his total profits plus his equity were pushing 100 million dollars. He showed no expression. The main office phone rang again. He motioned for Harry not to answer the call. He did not want to be bothered by another threatening call now that the market was open. The calls broke his concentration, he had nothing to say to anyone, and he didn't want to hear from anyone. With the market open he was like a wolf on the prowl. He could only concentrate on what he was doing. Every 1 percent move, up or down in his portfolio, meant he made or lost a million dollars.

The slightest loss of attention could cost him millions of dollars. It was exactly the way he loved it-every fiber of his being was alive-nothing else existed but the tape. The tape would tell him everything if he was smart enough to read it, find the hidden clues, and listen to it. He was fighting the two great emotions of the stock market-fear and greed- and he had a huge bet on the table.

That night he went home to King's Point and found his wife and two sons, Paul and Jesse Jr. gone. The paintings were off the wall, some of the Persian rugs were gone, the silver was gone. He went up to the safe on the second floor where Dorothea kept her jewels- a fabulous collection mostly from Harry Winston, and Van Cleef and Arpels-all gone.

He went into the kitchen and found the four cooks and the two butlers working, preparing dinner for the family.

"Where are Mrs. Livermore and the boys?" he asked.

"They have moved into the chauffeur's apartments sir," the main butler answered. "We have all heard about the great crash. We are very sorry, Mr. Livermore."

Livermore stared at them for a few seconds, expressionless, and walked to the apartments above the car stables. There were two chauffeurs, one for Dorothy, or "Mousie" as he called her, and one for "J.L." as he liked to be called. The car stables were attached to the great stone mansion. He walked into the living room of the apartment, stepping over the rolled up carpets and around the priceless works of art and antique furniture. Dorothea sat in the living room on the couch with the two boys. They were fully dressed in their best clothes.

"Mousie, what the hell is happening here. What are you doing?"

"We heard, I'm very sorry, J.L." She said.

"What are you talking about?"

"We heard that everybody has gone broke in the crash. It been on the radio all day. Men jumping out of windows, shooting themselves in their offices, disappearing. Some of my girlfriends called... I'm so sorry, J.L."

He looked at her for long seconds. She was beautiful sitting there with the two handsome boys, one on each side, her jewelry in a special leather case, next to her.

She was his opposite, effusive, full of life, funny, instinctive- a social animal-at her best in the middle of people. She would blurt out whatever was on her mind. She was a great natural comedian, and the best part was she didn't do it on purpose. In fact, she was often bemused by why people were laughing.

He looked down at the jewelry case. He had gone to her several times in his worst moments, his worst defeats in the market. He had taken that case to Harry Winston more than once, when he was broke, and needed a stake. The jewels, worth close to four million, were always good for a million in cash from Harry, a stake to start up again. When he went back to retrieve the jewels, after he was on his feet, he always took care of Harry with a wad of cash.

"Mousie, you and the boys come for dinner, bring the jewelry case."

"Oh god, J.L. you need them again?"

"No. Today was the best day I ever had in the market. I closed out half my holdings. We're going to be fine, and no, I won't be needing those jewels. Now, you and the boys come along."

He turned and walked out. A smile on his face, what a day. She never failed to do it-to surprise him-to make him smile. They were having personal problems, mostly he was having personal problems-other women. He hoped they would make it. He knew if they divorced he would miss her, miss her very much. His smile disappeared and his eyes misted as he thought of their love. He shook his head to get rid of those thoughts. He wouldn't let those thoughts settle in his mind. He would enjoy her and the boys, while they were still with him. Who knew what the future held.

The threatening phone calls stayed with him, more came in as the days passed. He needed to ward off these threats. He called up the New York Times, a newspaper that was always ready to quote the secretive Jesse Livermore. The headline read:

NEW YORK TIMES-November 13, 1929

"LIVERMORE NOW A BULL
Announces That Stocks Are Too Far Down and Some Are Sound Bargains

Jesse L. Livermore, who for many weeks past has been enlisted on the bear side of the market and is credited with having sold-short more stocks in this plummeting market then any other single individual, announced to the New York Times last night his conviction that the leading stocks had been driven down too far. Although Mr. Livermore made no statement as to his own positions his statement left the presumption that he has covered his shorts and again is on the buying side of the market

"Leading stocks with good dividend records and a certain future are on the bargain counter right now." declared Mr. Livermore. "Many of them have been driven down too far. People throughout the country had become panic stricken and have thrown their sound securities over without regard to values. To my mind this situation should go no further. There is no reason why first-class securities should be ruthlessly thrown into the market in such fashion as we have seen in the last few trading days.

"We have seen within the last few days large blocks of these securities thrown on the open market by sellers, many of whom had no other reason than they had been gripped by fear."

END OF TIMES ARTICLE
But the calls kept coming:

"Livermore, you goddam liar-I know how smart you are. You say you are on the positive side of the market while you beat the prices down into oblivion. I'm coming for you. I hope you never get another good night's sleep, you miserable bastard."

And coming:

"You rotten son-of-a bitch-what do I have to lose? I lost everything in the market-thanks to you, and your bastard friends. You think you can crush the little man, destroy me and my family with your illegal operation. You are a dead man, you just don't know it. My family suffered, now your family is going to suffer you miserable son-of-a-bitch."

And coming: "I lost my house today Mr. Livermore what do you think about that? My goddam house that I spent 23 years paying off. They evicted me today-I'm out on the street like a bum, with my wife and four kids. You did it asshole, and you're going to pay for it."
Non-stop the threats poured in over the phone, in letters, even telegrams were hand delivered with threats.

On December 21, 1929 Jesse Livermore hired his old friend Frank Gorman, an ex-Nassau County policeman. Gorman and Livermore were old friends. Livermore had used him several times in the past. The last time he used him was when his life was first threatened by "Boston Billy", after the jewel robbery.

Gorman moved into the mansion on King's Point in Long Island. He accompanied the boys to school, and was Dorothea's shadow.
Livermore walked to the window in his penthouse office and pulled open the drapes. He overlooked the metropolis that was New York City in 1929. As the ticker tape idly slid between his fingers, carrying an endless river of quotations, all negative, like casualty lists from a battlefield, he looked out the window.

He wondered how his life had come to this point. And he wondered why he wasn't happier these days, the days of his greatest financial success.

END CHAPTER
 

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