The Story of Money: The trader who made $100mn from the 1929 crash — only to lose it all
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Hey, listeners. Unhedged is taking a short break today, so we wanted to introduce you to one of our sister podcasts, The Story of Money. It's a weekly history show for finance geeks, or if you prefer, a weekly finance show for history geeks. It explores the ideas, personalities, and institutions that have shaped the history of money, and it's hosted by Jillian Tett and Robin Wigglesworth. The episode you're about to hear tells the extraordinary story of legendary trader Jesse Livermore, who made $100 million by shorting the Wall Street crash of 1929, only to lose his fortune just a few years later. Even better, this episode features me as a guest. Enjoy the show, and don't forget to follow The Story of Money wherever you're listening.
You can also watch on YouTube. He would walk into stockbrokers' offices and they'd think he was a naive kid when, in fact, he was an absolute shark and would clean the place out.
I mean, I found this great quote that apparently he gave to his kids. The only way to get a real education in life is to examine each and every one of your mistakes.
Yeah, and isn't that the truth on Wall Street in life? I know, I know.
It's the very same thing. I think what's so compelling about Jesse Livermore is that he does learn from his mistakes.
Most of the time, at least. Bad investors... What they do and what I've done when I've made mistakes is you think you lost because it was a coincidence. Livermore never does that. Yeah. The only thing that is winning is making money. And if you lose and lose money, it's because you were wrong, not because you were unlucky.
Yeah.
Today on the story of money. How do you make a hundred million bucks when marks are crashing and everyone else is losing their shirt and then somehow blow it all? Well, today we're going to be talking about one of history's most legendary traders, Jesse Livermore. He made a cool hundred million dollars in the great crash of 1929. And that's actually one and a half billion dollars in today's money. Or if you want to scale it relative to the size of the U.S. economy back then and now, around 30 billion dollars. One of the biggest trading halls in history. He was a larger than life character who went from Massachusetts farm boy to champagne soaked parties in New York. He even helped inspire F. Scott Fitzgerald's Jay Gatsby.
He's basically the patron saint of day traders everywhere. But tragically, just like Jay Gatsby, Livermore's rise was matched by a catastrophic fall. Now, Gillian is away today, sadly, so it's just me this week. I'm Robin Wigglesworth, and this is the story of money from the Financial Times.
To get into the story of Jesse Livermore, I am joined by a very special guest, Robert Armstrong, who, like Livermore, is a bit of a Renaissance man. You may know him as the FT's US financial commentator, or as the host of the Unhedged podcast, or as the writer of the Unhedged newsletter. For me, he'll always, always be the FT's best style columnist. And he also was a hedge fund analyst back in the day as well. So Rob, thanks so much for being here today.
It's a great pleasure to join the show. So, Rob, when did you first hear of Jesse Livermore? When I first started working on Wall Street, there was a kind of small handful of books that was pressed upon me as kind of the founding literature of the profession that every young man on the road to making money in speculation should read. And one of them was a book called Reminiscences of a Stock Operator, which was written by a journalist called Edwin Lefevre.
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