Page 61 - Morgan Housel - The Psychology of Money_ Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

There are a million ways to get wealthy, and plenty of books on how to do
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so.

But there’s only one way to stay wealthy: some combination of frugality and
paranoia.

And that’s a topic we don’t discuss enough.

Let’s begin with a quick story about two investors, neither of whom knew
the other, but whose paths crossed in an interesting way almost a century
ago.

Jesse Livermore was the greatest stock market trader of his day. Born in
1877, he became a professional trader before most people knew you could

do such a thing. By age 30 he was worth the inflation-adjusted equivalent of
$100 million.

By 1929 Jesse Livermore was already one of the most well-known investors
in the world. The stock market crash that year that ushered in the Great
Depression cemented his legacy in history.

More than a third of the stock market’s value was wiped out in an October
1929 week whose days were later named Black Monday, Black Tuesday, and
Black Thursday.

Livermore’s wife Dorothy feared the worst when her husband returned home
on October 29th. Reports of Wall Street speculators committing suicide were
spreading across New York. She and her children greeted Jesse at the door in

tears, while her mother was so distraught she hid in another room,
screaming.

Jesse, according to biographer Tom Rubython, stood confused for a few
moments before realizing what was happening.