How serious was the great depression in the United States in the 1930s? Thousands of ordinary people have been laid off and starved to death, and the U.S. economy has stagnated. Even "stock maker" Livermore committed suicide because he failed to copy the bottom many times. However, Livermore's failure, even if there are reasons for the great times, but he himself is also inseparable from the relationship. So what can we learn from his failure?
The most important lesson we can learn from Livermore's bankruptcy is: don't be in a hurry to turn around after a failure.At the beginning of the great depression and the stock market crash, Livermore had begun to build stock positions. After the first round of stock market crash, Livermore also suffered serious losses. However, he did not close his position at this time. Instead, he reversed the trend and made a loss. After three times, Livermore lost all his assets.
In fact, after the first and second failures, if Livermore could suspend trading and make a little rest, he would not have suffered so much. But for him, the first and second failures in front of him made him lose too much money. He couldn't stand it. He wanted to turn losses into profits immediately. A smart and alert investor made mistakes repeatedly at such times and finally went bankrupt.
If we think about it carefully, we will find that such a state of mind is very common in gamblers. Gamblers lose several times, but they always want to win back the lost money immediately, so they bet more and more, and lose more and more money in a single gamble. And because they lose more and more, so they bet more and more.
As a result of this vicious circle, the ultimate loss is some, debt is heavy, and even the family is ruined. Therefore, after the loss of investors, we need to do a period of study and rest, do not rush to turn the loss. This kind of eagerness to turn the corner is the root of Livermore's failure, and also the fundamental reason why gamblers can never succeed.