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Click here to join now.In 1929, just before the Great Depression hit, Jesse Livermore was hailed as a legend.While the rest of Wall Street was drowning in panic, Livermore had taken a large short position and walked away with over $100 million in profit.Newspapers called him “The Boy Plunger.” His wife, it’s said, was afraid to tell her friends how much money they had made. It felt indecent.But here’s the twist. Less than a decade later, Livermore was broke.And this was not his first fall. Nor would it be his last.Livermore made and lost multiple fortunes over his lifetime. His story, which is part genius and part tragedy, is captured in Reminiscences of a Stock Operator, a fictionalized account of his life written by Edwin Lefèvre.Though the main character goes by the name “Lawrence Livingston,” the narrative closely mirrors Livermore’s real-life journey through the highs and lows of early 20th-century Wall Street.Now, don’t be misled by the book’s title (“stock operator”). The wisdom it offers is timeless. I am not a trader, but I think every serious investor should read this book. It teaches you all the ways you can lose money in the markets, and that I believe is a greater lesson than that on making money.Livermore’s life might feel distant, but the emotional patterns he observed are as current as ever. Markets have changed. Human nature hasn’t. So what can we, as modern investors, learn from a man who rode the waves of Wall Street a hundred years ago? I think, plenty.What follows are some of the deeper investor lessons I’ve learned from the book. These are lessons that could (hopefully) spare you some of the pain Livermore had to endure to learn them.Let’s start right here.1. Sitting Still Is an Active StrategyIt never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!One of Livermore’s most famous and overlooked insights is the power of doing nothing.Most investors believe their edge lies in doing more. But Livermore learned the hard way that it’s not about spotting the opportunity. Many can do that. It’s about holding your investments when every part of you wants to act.We all notice that markets are noisy. But we rarely notice that our minds are even noisier. When stock prices fluctuate and doubt creeps in, the temptation to act, or to do something, becomes overwhelming.But Livermore reminds us through his experiences and mistakes that money is made not in motion, but in conviction.This is a hard truth for modern investors constantly refreshing apps and consuming hourly updates. The paradox is that in a world that moves faster than ever, your greatest advantage might be your ability to slow down…and sit still.2. Tips Are Toxic, Even When They WorkTips! How people want tips! They crave not only to get them but to give them. There is greed involved, and vanity. It is very amusing, at times, to watch really intelligent people fish for them. And the tip-giver need not hesitate about the quality, for the tip-seeker is not really after good tips, but after any tip. If it makes good, fine! If it doesn’t, better luck with the next.Tips are just that. Tips. Following blindly is setting you up for epic ruin. First of all you have no idea what position that tipper is in. He may not even hold the stock he is recommending. Even if he is, you have no idea when he will unload his lot. Suppose he is selling his stock to you. Then you would be forced to dump it to someone else for a higher price.Livermore had strong words for the culture of tips, and for good reason. He watched countless traders ruin themselves chasing them.A tip feels like a shortcut around the hard work of thinking, understanding, and taking responsibility. But tips are dangerous not just because they’re unreliable, but because they remove you from the decision-making seat. You act on someone else’s conviction, or worse, on someone else’s manipulation.Even worse, most tips don’t come with context. You don’t know the tipper’s time horizon, portfolio allocation, risk appetite, or motive. You don’t know if they’re buying or unloading. And even if the tip turns out to be right, you don’t know why it worked, which means you learn nothing.Livermore’s advice here is that you must trade only when your analysis leads you there, and that you must own each of your decisions.If you need to ask, “What should I buy?”, you’re not ready to buy anything.3. Human Nature is the Market’s Only ConstantThe game does not change and neither does human nature.Markets have evolved since Livermore’s days. Financial instruments have also become more complex. But human nature, the underlying software that drives markets, has stayed the same.Now, greed, fear, envy, hope, overconfidence, and herd behaviour aren’t bugs in the system. They are the system. And Livermore, through endless cycles of boom and bust, realised that the real game wasn’t predicting prices, but anticipating people.Even while every crash feels new and every bubble feels different, they’re not. Livermore saw the same behaviours repeated again and again, just with new actors and costumes.The lesson here is that if you want to be a better investor, don’t just study the markets. Study yourself, and others. Watch how people behave under pressure, during euphoria, or in denial. The investor who understands psychology has an edge that doesn’t fade with technology.4. Don’t Waste Lessons from Your LossesThere is nothing like losing all you have in the world for teaching you what not to do.Livermore knew loss intimately. He went bankrupt several times. Yet, to his credit, he mined his failures for insight. He believed that you learn little from winners, because when things go well, you assume you’re right. It’s losses that force introspection. Pain is a really powerful teacher, only if you care to listen.He went so far as to say:Being broke is a very efficient educational agency.But the catch here is that education is only useful if it’s applied. Many traders and investors lose money, only to repeat the same mistakes out of denial or ego.Livermore’s advice is clear: if you lose, lose consciously. Take the lessons. Change your approach. And above all, don’t let your losses go to waste.5. Respect the Market. It Owes You NothingOn the evening of November 28, 1940, Livermore ended his life with a self-inflicted gunshot wound.When the police arrived, they discovered a suicide note. The note was addressed to his wife, Harriet, whom he affectionately called “Nina.” In it, he wrote:My dear Nina: Can’t help it. Things have been bad with me. I am tired of fighting. Can’t carry on any longer. This is the only way out. I am unworthy of your love. I am a failure. I am truly sorry, but this is the only way out for me. Love LaurieAs much for its legacy of timeless lessons, Livermore’s life is also a cautionary tale. He was brilliant and much ahead of his time in reading stock prices and understanding crowd psychology. But he also overleveraged, overtraded, and underestimated his own fragilities. His final years were filled with financial and personal despair, which ultimately led him to take his life.It’s important to remember this… not to judge him, but to learn. The market doesn’t care how smart you are. It doesn’t owe you anything. And if you start to believe you’re invincible, it will find a way to remind you otherwise.Livermore’s final years were filled with turmoil. And that’s the part of the story we should pay attention to. It was sad, but it was real. There’s a thin line between confidence and arrogance, and the market punishes those who cross it.So, what should we really take away from all this? If I had to boil it down, I’d say this:Be humble,Be patient,Think for yourself,Accept that losses are part of the game, andDon’t let your ego write cheques your portfolio can’t cash.Ultimately, markets are not just mathematical, they are psychological, emotional, and human. And the better you understand those parts, the better you’ll do.You don’t have to trade like Livermore. In fact, you probably shouldn’t. But you should definitely learn from him. His wins and mistakes are instructive. And his reflections are timeless. Read them slowly. Let them sink in. And the next time the market tests your patience or your conviction, remember Livermore’s words:There is nothing new on Wall Street. There can’t be, because speculation is as old as the hills.The players change. The stories evolve. But the game, and its lessons, remain the same.Two Books. One Purpose. A Better Life. Buy Now at a Special Anniversary Discount. Until 30th July 2025“Discover the extraordinary within.”—Manish Chokhani, Director, Enam Holdings“This is a masterpiece.”—Morgan Housel, Author, Psychology of MoneyClick here to buy Boundless (₹1999 ₹1599)Click here to buy Sketchbook (₹1999 ₹1699)Click here to buy the combo (Boundless + Sketchbook) (₹3998 ₹2799)The post Investing Wisdom from the Rise and Fall of a Market Genius appeared first on Safal Niveshak.