In the history of financial transactions, Livermore is known to everyone, and he is a rare speculative genius. In 1907, 30-year-old Livermore made his first $3 million in his life by shorting out during the market crash. Big banker JP Morgan begged him personally not to sell short any more. In 1921, during the period of economic recession and stock market downturn, he entered the market to go long; in 1929, he accurately shorted before the big crash, earning 100 million US dollars, reaching the peak. It was definitely a huge sum of money at the time. The heights Livermore reached in that era are definitely comparable to Buffett and Soros today. Even then President Roosevelt invited him to the White House as a guest and asked him to close his cotton position to relieve the national emergency.
But it was such a great trader who shot himself at the age of 63, leaving an eight-page suicide note.
"There's nothing you can do. It's gotten really bad. I'm tired of fighting. There's no way I can hold any more. It's the only way out. I don't deserve your love. I'm a loser. I'm really sorry, but to me It's the only way out."
This can't help but make us wonder why the once wealthy trader ended up in this end.
In addition to Livermore, let us look at the ending of the first generation of traders in China:
According to statistics, imprisonment, escape, and loss accounted for 53%. Missing and embarrassing situations accounted for 30%, and those who changed careers and succeeded accounted for only 13%.
Then why the traders who used to be all-powerful and sitting on mountains of gold and silver did not continue to have more wealth, but instead all ended up with unsatisfactory results. What are the reasons why these people committed suicide and went bankrupt, and what can we do as later generations so as not to repeat the same mistakes.
The summary has the following points:
1: Malicious manipulation of the market
I don’t need to say more about this. The example of manipulating stock prices is just around the corner. Zhao Wei was banned from entering the securities market for five years by the China Securities Regulatory Commission for manipulating stock prices. Go to jail. Therefore, looking at home and abroad, maliciously manipulating the market and harvesting money obtained from retail investors by improper means are morally and legally unacceptable to the world, and will definitely be punished by law.
solution:
In fact, from my point of view, there are dealers in every market, and there is no market without dealers, but there are dealers with the ability to control the market. As long as the banker does not violate the laws of the country and does not do anything against his conscience on the moral level, I think it will be fine. For example, in the Wells Fargo scandal, Buffett was the largest shareholder of Wells Fargo. However, after the bank's problems broke out, Buffett did not cover up and connive because of the sharp drop in the stock price and the sharp shrinkage of his net worth. Instead, he firmly assumed responsibility and helped solve the problem. He criticized the way the bank management handled the scandal, and his attitude continued until the end of the whole incident, promoting the clean-up and rectification of the US banking industry. This is the attitude that an excellent market investor should have.
2: Private life is chaotic
As the saying goes, there is a knife on the head of color. Any trader who blindly indulges in pornography, gambling and drugs will end badly. Among the first generation of traders in China, all bigwigs who like to associate with pornography, gambling and drugs are all exceptions. Speculator King Livermore also belongs to this type. He has been a romantic life, experienced many marriages, and kept mistresses. Excessive indulgence leads to an unbalanced trading life. Many transactions are caused by women who fail to implement their own trading principles, which eventually lead to depression, mania, and suicide.
solution:
We must control our desires. Just imagine, if you can't control your desires, have no bottom line principles, and can't help tempting people at all, then how can you implement your own trading principles and bottom line in transactions? Other people's gossip, the slightest sign of trouble may affect you The original plan, even if you have the best trading strategy, I am afraid you will not be able to implement it to the end. Blindly immersed in pornography, gambling and drugs, the energy of the whole person is consumed, and there is no time and energy to focus on the game. As the saying goes, trading is like being a human being. Only by controlling your desires, staying away from pornography, gambling and drugs, and having a balanced life and rest, can you become a good trader.
3: Defy the market
Some traders made some money, or they thought that they were the king of the market after making a few dozen times by luck. They had the illusion that they could punch Soros and step on Buffett, and felt that the k-lines on the disk seemed to be drawn by themselves Same. This kind of thinking can often make people self-righteous, use their own subjective ideas to speculate on how the market will go next, and it is easy to put all of themselves after a few fluke successes, ignorantly thinking that the market will follow their own ideas.
solution:
Cultivate mindfulness and give back to society. We can often find that the success of a trader is directly proportional to his personal cultivation. In a large number of market battles, the profit and loss of a single transaction has long been underestimated, and the overall success or failure is more important. Not pleased, not to have compassion. All the bosses of some large enterprises at home and abroad are very enthusiastic about charity, doing good deeds and accumulating virtue by helping others, and giving back to the society. Soros was very ruthless financially, defeated the Bank of England, shorted the Thai baht and led to the Asian financial crisis, and even tested Hong Kong. But behind an ambitious financier, he is also a philanthropist. Before Bill Gates and Buffett started donating, Soros’ donation amount ranked first for many years, and the Bank of England itself had problems and bubbles. Soros only It's just letting it go from slowly dying to accelerating the speed of pushing to rebuilding the entire system.
We do financial transactions to make money, but the ultimate goal is never just to make money. From the nature of some markets, every penny we earn is money lost by others. It is just a process of wealth conversion and has no practical significance in promoting social progress. If you have accumulated enough wealth, I think it is a good way to give back to the society. If you don't want to become like Livermore or China's first generation of traders. You must be righteous, mindful, and treat yourself and the financial market with an objective attitude. After accumulating a certain amount of wealth, use a grateful heart to give back to the society and benefit others. Only by not forgetting the original intention can we be persistent.
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