I almost forgot about today.
I’d like to think I have many things in common with Jesse, such as our initials “JL” or the fact that we both got started when we were teenagers, but that’s as common as things get. JL’s trading journey is a perfect demonstration of how far one man is willing to go to achieve greatness in our profession. He has personified the very definition of fortitude in the face of extreme adversity. It’s not about how his life ended, but rather, it’s about how he lived as a professional trader that we seek to examine and emulate.
Think about it. Think about what he had to face:
- He went broke, after being married at 23, and had to ask his first wife to pawn off her jewelry. They divorced.
- His 2nd wife divorced him. The 3rd wife might have been a bit “off” since her last four husbands committed suicide.
- Lost both multi-million dollar fortunes (3MM and 100MM) after two early 1900′s crashes.
- Went bankrupt several times.
- Suffered severe clinical depression.
These things would surely have made the vast majority of men quit trading, but JL wasn’t an ordinary man, he was extra-ordinary and above the average trader.
If you’re quite unsure of trading or whether you can actually do it, think about the time, effort, and personal sacrifices and struggles JL had to make. This is why I ask my subs if they are “doing everything they can” to make trading a possibility. I personally believe that trading is a privilege that is earned through years of sweat and tears (and any other bodily fluids that would apply). If one simply decides to wake up one morning, open a brokerage account, and start pressing buttons, then that person has not earned that privilege and one thing is for certain – trading definitely isn’t a right.
Even more, there were no computers or the internet back then. There weren’t thousands of trading books available. There was no Stocktwits. We truly have to be grateful for the countless resources we have at our disposal in the 21st century (yet most people still don’t take advantage of them). For a man that had to scribble numbers on a board and chart stocks on paper, his feats cannot go unnoticed. We have the most advanced trading tools available to us and countless resources at our disposal, yet the question still remains for new traders: are you doing everything you possibly can to perform? If you quit trading, ask yourself: did you do everything you possibly could to give yourself the best chance of survival? If you didn’t, then you probably will never know your true trading potential.
It is true that the most knowledgeable, experienced, and disciplined executors survive. It is also true that this is a long, arduous process. “It’s a journey, stay the course” as I try to teach my subs. Each day contributes to a mosaic with all of the parts interwoven into the fabric of your own unique personal journey. I encourage everyone to carefully read upon JL if you haven’t done so already. Don’t just mindlessly flip page after page, but truly examine each word in any of the books written by him or on him.
I can probably speak for most traders and say that JL’s words of wisdom has helped all of us in one way or another. In fact, I can agree with him on just about everything he said as his own rules form the core of my own rules. Having started trading over 100 years ago, his rules still apply today and we have to thank him for that.
In closing, below are some of his quotes:
Averaging Buys/Sells: “When I’m bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I don’t buy long stocks on a scale down, I buy on a scale up.”
Discipline: “The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.”
Price Action: “The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you can familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements.”
Stock Picks/Following People: “The average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think.”
Cutting Losses: “A loss never bothers me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does damage to the pocketbook and to the soul.”
Timing: “It isn’t as important to buy as cheap as possible as it is to buy at the right time.”
Being Right: “There is only one side of the market and it is not the bull side or the bear side, but the right side.”
Stocks Not Acting Right: “If a stock doesn’t act right don’t touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit.”
Stock Tips: “I know from experience that nobody can give me a tip or series of tips that will make money for me than my own judgement.”
Not Taking It Personally: “Getting sore at the market doesn’t get you anywhere.”
Learning Curve: “It took me five years to learn to play the game intelligently enough to make big money when I was right.”
Self-Confidence: “A man must believe in himself and his judgement if he expects to make a living at this game.”
Hard Money: “People who look for easy money invariable pay for the privilege of proving conclusively that it cannot be found on this earth.”
Importance of a Plan: “My plan of trading was sound enough and won oftener that it lost. If I had stuck to it I’d have been right perhaps as often as seven out of ten times.”
Lesson Learned: “It takes a man a long time to learn all the lessons of all his mistakes.”
Waiting for Opportunities: “After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting.”
Intuition: “I knew something was wrong somewhere, but I couldn’t spot it exactly. But if something was coming and I didn’t know where from, I couldn’t be on my guard against it. That being the case I’d better be out of the market.”
More on Sitting: “The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages.”
Daily Personal Struggle: “A stock operator has to fight a lot of expensive enemies within himself.”
Pain is Good: “If I hadn’t made money some of the time I might have acquired market wisdom quicker.”
Blowing Up: “There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!”
Physically and Mentally Fit: “I couldn’t afford anything that kept me from feeling physically and mentally fit. Even now I am usually in bed by ten. As a young man I never kept late hours, because I could not do business properly on insufficient sleep.”
Accept Responsibility: “The customers, who were all eager to be shoved and forced into doing things so as to lay the blame for failure on others…”
Greed: “One of the most helpful things that anybody can learn is to give up trying to catch the last eighth – or the first. These two are the most expensive eighths in the world. They have cost stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent.”
Taking Breaks: “I can always give up trading to play, unless of course it is an exceptionally active market in which my commitments are rather heavy.”