Godfrey,
I think it is interesting to discuss Livermore because the lessons to be learned are many. But many times i read about how he died a pauper and it is indeed a distortion of the facts. He certainly was broke, and depressed and of course suicidal. He was a real mess. But I have read quite a bit about him over the years, and he actually had substantial assets(millions) in trusts that he couldn't get to, and owned numerous properties. but his "stake" was depleted and he owed more than that stake and had lost virutally everything he had gotten from his maneuverings in the 29 crash.
I am not here to defend anything but hope that a few will read this and realize some of the facts tossed about on Livermore are indeed badly distorted. I figure that he began with almost nothing in 1900 and easily generated a net of in excess of 10 million by his death. All from trading. And he had thrown away more than that amount in a lavish lifestyle(if you want to call it that. The guy was basically a scumball with no morals except toward his debtors).
There are KEY take aways.
His trading and money management rules are hard to improve upon so I won't attempt to do it. But he would then blow it badly, by not following the rules.
I have simplified his lesson to one thing after 25+ years: I wake up in the am and ask myself, is the intermediate trend up or down or sideways? Then I ask myself am I positioned in that direction or not. If not, WHAT THE HELL AM I UP TO; AM I SICK LIKE LIVERMORE, OR WHAT??
The first step is to have confidence that I know what the intermediate trend is, over 90% of the time. Then, I know in my heart if I am not with it, then I am positioned as if I am gambler, an addict, a rank amateur.
Anyway, knowing about Livermore has helped me. Its very important to do what he said and not what he did
AI
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