At a table in Manhattan's noisy Stork Club one night last week sat a tall, thin, aging man and his wife. A society photographer asked the couple whether they minded having their picture taken. "Not at all," said the thin man. "But it's the last picture you'll take, because tomorrow I'm going away for a long time."
For the rest of the evening Jesse Lauriston Livermore, most fabulous living U. S. stock trader, sat brooding at his table while his wife danced with friends. It was just three years short of half a century since he had made his first play in the market—a $3.12 profit on Burlington Railroad common. He was 15 then, a board boy in Boston's Paine, Webber & Co. They told him to stay out of the bucket shops or quit his job. He quit. A towheaded greenhorn from West Acton, Mass., son of a poor Yankee farmer, he began beating the bucket shops at their own game until they refused to take his business. With $2,500 in his pocket, 21 years behind him, he lit out for Wall Street.
Wall Street received its country cousin with open arms, and in no time at all relieved him of his bank roll. It was eight years before he caught on to the New York market. Even then, it took an act of God to give him his first big killing. He was vacationing at Atlantic City in the spring of 1906 when a hunch told him to sell Union Pacific short in the face of a roaring bull market. Two days later the San Francisco earthquake shook $250,000 into his lap.
Jesse Livermore had learned that big money could be made only on the big swings. Now he had enough capital to play it that way. Just before the tense Thursday in October of 1907 when J. P. Morgan & Co. and other banks poured $25,000,000 into the call-money market he took a short position. While older & wiser traders were wiped out, Jesse Livermore picked up a cool million or so and a reputation beyond price. Thirty years old, he was again dubbed the Boy Plunger—this time by Wall Street. He bought a steam yacht and sailed for Boston, where he spent $200,000 trying to save a brother-in-law from the chair for killing his wife.
Caring nothing about stocks themselves, only about quotations, Jesse Livermore had a theory: he would be right 60% of the time, wrong 40%, pyramid a fortune out of the 20% differential. In 1908 he discovered the cotton market, was wiped out. He could scarcely have chosen a more unfortunate time to go broke. For four years (1911-1914) the stockmarket couldn't make up its mind whether to go up or down. For Jesse Livermore that meant starvation. In 1915 he declared himself bankrupt for the first time.
Borrowing a new stake, Jesse returned to the stockmarket. For six weeks he watched World War I boost Bethlehem Steel upward until he knew that it was ripe. The day after he climbed aboard it had jumped 45 points. He was hot. Within two years he bulled and beared himself into a profit of some $5,000,000.