Jesse Livermore on Credit Cycles

I played more carefully and did better for a while. As soon as I was in easy circumstances I began to live pretty well. I made friends and had a good time. I was not quite twenty-three, remember; all alone in New York with easy money in my pockets and the belief in my heart that I was beginning to understand the new machine. I was making allowances for the actual execution of my orders on the floor of the Exchange, and moving more cautiously. But I was still sticking to the tape that is, I was still ignoring general principles; and as long as I did that I could not spot the exact trouble with my game.

"For the commission and the record," he answered. "Do you work for money alone?" he asked me. "No." And he shook his head. "No, you don't. You wouldn't get enough fun out of it. You certainly do not work merely to add a few more dollars to your bank account and you are not in Wall Street because you like easy money. You get your fun some other way. Well, same here."

By rights the promoters ought to have got stuck with it, but in the wild bull market their hoggishness turned out to be rank conservatism. The public was buying anything that was adequately tipped. Investments were not wanted. The demand was for easy money; for the sure gambling profit. Gold was pouring into this country through the huge purchases of war material. They tell me that the promoters, while making their plans for bringing out Borneo stock, marked up the opening price three different times before their first transaction was officially recorded for the benefit of the public.

it. Take my word for it, Mrs. Livingston, and buy Borneo Tin!" He was very earnest about it and succeeded in so impressing her that she began to think she had found an excellent use for the five hundred dollars I had given her that afternoon. That money hadn't cost me anything and was outside of her allowance. In other words, it was easy money to lose if the luck went against her. But he had said she would surely win. It would be nice to make money on her own hook and tell me all about it afterwards.

In booms, which is when the public is in the market in the greatest numbers, there is never any need of subtlety, so there is no sense of wasting time discussing either manipulation or speculation during such times; it would be like trying to find the difference in raindrops that are falling synchronously on the same roof across the street. The sucker has always tried to get something for nothing, and the appeal in all booms is always frankly to the gambling instinct aroused by cupidity and spurred by a pervasive prosperity. People who look for easy money invariably pay for the privilege of proving conclusively that it cannot be found on this sordid earth. At. first, when I listened to the accounts of old-time deals and devices I used to think that people were more gullible in the 1860's and '70's than in the 1900's. But I was sure to read in the newspapers that very day or the next something about the latest Ponzi or the bust-up of some bucketing broker and about the millions of sucker money gone to join the silent majority of vanished savings.

He utilised the stock market of course. But I suspect it was because that was the quickest and easiest way to quick and easy money and he needed many millions, just as old Collis P. Huntington was always hard up because he always needed twenty or thirty millions more than the bankers were willing to lend him. Vision without money means heartaches; with money, it means achievement; and that means power; and that means money; and that means achievement; and so on, over and over and over.

manipulator; he was a consummate trader to begin with. The word "manipulation" has come to have an ugly sound, It needs an alias. I do not think there is anything so very mysterious or crooked about the process itself when it has for an object the selling of a stock in bulk, provided, of course, that such operations are not accompanied by misrepresentation. There is little question that a manipulator necessarily seeks his buyers among speculators. He turns to men who are looking for big returns on their capital and are therefore willing to run a greater than normal business risk. I can't have much sympathy for the man who, knowing this, nevertheless blames others for his own failure to make easy money. He is a devil of a clever fellow when he wins. But when he loses money the other fellow was a crook; a manipulator! In such moments and from such lips the word connotes the use of marked cards. But this is not so.

Now, this is pretty easy money for the broker, if he has a large following and of course this is precisely the kind of broker the insider seeks. A house with direct wires to branches and connections in various parts of the country can usually get a large following in a deal of that kind. Remember that in any event the broker is playing absolutely safe by reason of the put. If he can get his public to follow he will be able to dispose of his entire line at a big profit in addition to his regular commissions.