Greetings from Wroclaw, Poland, where I teach until I return to Italy this Wednesday. It’s one of my favorite European cities, with beautiful architecture, great food and wine (and beer and vodka), and few tourists.

Wroclaw Old Town Hall, SE corner of Old Town Square, Wroclaw, Poland. Credit: Sean Ring

While I’m here without Pam and Micah, I had time to catch up on some fabulous pieces my colleagues at Paradigm Press have written. On Friday, you got Dan Amoss’ piece on NVDA’s bubble. Today, you’ll get Enrique Abeyta’s take on Jesse Livermore.

My friend and colleague Enrique recently published the piece below in his daily e-letter, Paradigm Press’s Truth and Trends. It’s a peach of a piece about the life and philosophy of one of the greatest investors of all time, Jesse Livermore. I thought you ought to read it.

I’ll let Enrique tell you more about Livermore below. Enjoy!

In today's issue, we introduce you to the wisdom of one of the best investors of a much earlier generation: Wall Street legend Jesse Livermore.

Many of you may not have heard of Livermore, but he was a towering investment figure in the early twentieth century.

He was born into poverty in Massachusetts on July 26, 1877, and ran away from home at fourteen. He eventually got a job as a “board boy” posting stock quotes at the Boston branch of the venerable brokerage PaineWebber.

A funny story was that his first “bet” on a stock was not buying a stock. He placed an actual BET at a place that would take wagers on stock prices instead of buying and selling the actual stock.

He moved to New York a decade later (at 23) and quickly took advantage of the turn-of-the-century bull market for stocks.

Across the next four decades, he would have one of the most dramatic careers in Wall Street's history. He made himself one of the wealthiest investors on Wall Street multiple times but also filed for bankruptcy three times.

Finally, in November 1940, he took his own life by shooting himself with a Colt automatic pistol in the cloakroom of The Sherry-Netherland Hotel in Manhattan – one of his favorite spots.

We encourage you to read more about him, and below are a handful of great timeless quotes from him about investing…

“Don't trust your own opinion and back your judgment until the action of the market itself confirms your opinion."

This is one of the core tenets of our investing strategy. We seek confirmation from the market that it is interested in the stocks we invest in and trade.

Being right about a company's fundamentals but not having the stock confirm them is just WRONG.

“Never buy a stock because it has had a big decline from its previous highs.”

This is quite a simple rule, but many investors start looking for stocks by looking for the ones that are down the most. While those could be good stocks, we prefer to start by looking for the ones that are up the most and have pulled back.

“Big movements take time to develop.”

Another one of our favorites. There is a lot of money to be made in the stock market, money that can change your financial future.

Those kinds of returns, though, rarely happen in a day, a week, or a month. Sometimes, they take YEARS. Patience is your most crucial investment weapon.

“It is not good to be too curious about all the reasons behind price movements.”

This is one of his most potent quotes!

It is incredible how much time and energy investors waste trying to "explain" price movements instead of just developing a plan to handle or harness them.

Stop looking for the reason for the move and figure out how to make money off it!

“It is much easier to watch a few than many.”

Our regular readers know we often return to the SAME STOCKS in our trading.

It is too complicated (and pointless) to have an opinion on EVERY stock out there.

Figure out a group of stocks for which you understand the trading sentiment and fundamentals and determine how to profit from them consistently.

“The human side of every person is the greatest enemy of the average investor or speculator.”

We talk about this all the time. Your greatest challenge as a trader or investor is your human psychology.

[Seanie’s note: my silly move selling my portfolio on Powell’s October rate cut cost me 50% gains. I’m so mad at myself, but that’s the tuition I had to pay never to do that again!]

Figure out these biases and how to eliminate them from your process, and you will be more successful!