This week I went through the books about Buffett and Jesse Livermore, and all the notes I took, and finally I have a new view on these two predecessors in the trading world. The same road, but in the end different routes lead to the same goal.
Jesse Livermore is actually a very contradictory person. On the one hand, he wants to limit risks, and on the other hand, he wants to increase the rate of return on funds, which makes him unable to escape the "Curse of Sisyphus" in the end. What is the "Sisyphus Curse"? Presumably many people have not heard of it. Today I will give you some popular science: Sisyphus is a character in Greek mythology. He is the founder and king of Corinth. He even once kidnapped the god of death, so that there is no death in the world. In the end, Sisyphus offended the gods. In order to punish Sisyphus, the gods asked him to push a boulder up to the top of the mountain, but because the boulder was too heavy, it rolled down the mountain before reaching the top of the mountain, and all previous efforts were wasted. Just do it over and over again and without end--the gods think there is no more severe punishment than to perform such futile and hopeless labor. Sisyphus's life was slowly exhausted in such a futile and hopeless labor.
But one day, he felt very happy. He found that in the process of pushing the stone, he pushed through the most beautiful scenery in the world: through spring, summer, autumn and winter, wind, flowers, snow and moon, blue sky and white clouds, and electricity. Flash and thunder. The birds of the sky sang to him, the beasts of the earth danced for him, the breeze brought him the fragrance of flowers and plants, and the rain brought him the fragrance of the earth. Although Jesse Livermore finally chose to commit suicide to end his own life, he introduced the courage, wisdom and mind of a trader, and introduced the true meaning of life-endless struggle. Here, on behalf of myself, I express my deep admiration for such a great predecessor.
Reviewing Jesse Livermore's life and transactions is actually reviewing my own life and transactions. The biggest gain I got from reading this week is that although Jesse Livermore and Buffett have different paths, they are both in the end. Realize your own profit through the market, but Jesse Livermore speculates through the biggest trend movement, and then increases his position based on the pyramid principle, while Buffett invests by looking for the best company, based on this long-term holding. Jesse Livermore had ups and downs in his life and finally died in depression, while Buffett grew steadily throughout his life and lived a long and healthy life? Here I have to mention Buffett's teacher Graham. First of all, Graham has experienced the financial crisis, and he passed this crisis awareness to Buffett. Secondly, Graham was a senior executive of an insurance company and had a professional and comprehensive understanding of risk measurement and management. Because he was deeply influenced by actuarial thinking, Buffett was influenced by him in position management and risk control. It can be said that Buffett is standing on the body of a giant, and it is not surprising that he can achieve such success.
Jesse Livermore is not difficult to bear the consequences of putting all his eggs in one basket, but he does it repeatedly. As long as he fails once, he will lose everything. There are not many such people among us ordinary traders, but they are not as powerful as him, let alone the courage to end their lives without him. Buffett advocates concentrated investment, but he never puts all eggs in one basket. Jesse Livermore monopolizes the power alone, without his own independent risk control. Buffett recruits talents and advances and retreats with his partner Munger. Although Jessie Livermore lived a prosperous life, he couldn't find a true friend. In the end, he couldn't get out of the strange circle of loneliness. It is not difficult to understand that he committed suicide naturally. But Buffett has a partner like Munger who is both a teacher and a friend to discuss big plans, so the outcome is naturally different.
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