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Speaker 1: Pushkin too quick.

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Speaker 2: No, it's perfect push kit stop you got it?

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Speaker 1: Hi, Robert, Hello, chickib Jacob.

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Speaker 3: I want to talk about the big stock market crash

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Speaker 3: of nineteen twenty nine, The big one, the big one.

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Speaker 3: It's very much on our minds these days. And you know,

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Speaker 3: is it very much on your mind? It is very

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Speaker 3: much on my mind. Is the bubble sort of inflates?

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Speaker 1: Right, it's not going to be that bad. It's not

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Speaker 1: going to be.

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Speaker 3: Always think about a crash as like this single moment. Right,

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Speaker 3: it's a crash. It's like a car crash, like boom.

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Speaker 3: But in October of nineteen twenty nine, it was way

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Speaker 3: more painful than that. It was actually like six days

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Speaker 3: ease of dread and pain, gut wrenching fear.

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Speaker 1: Right.

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Speaker 3: It starts on Black Thursday, October twenty fourth. Stock prices

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Speaker 3: start to go down, down at some point around eleven percent. Okay,

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Speaker 3: that's bad, but like normal, dad, Yeah, it doesn't feel

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Speaker 3: good news. It's definitely news. On Friday, people buy the dip.

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Speaker 3: Banks sort of come in to back everyone up. Things

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Speaker 3: are looking okay, but it takes them all weekend to

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Speaker 3: go through all the stock orders on paper. It's paper

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Speaker 3: then right, people are going wild. Right, Monday morning comes.

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Speaker 3: Monday's are always hard. This one was black black Monday

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Speaker 3: down thirteen percent market.

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Speaker 1: Yes.

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Speaker 3: And then we get to the morning of Tuesday, October

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Speaker 3: twenty ninth, and everyone in New York seems to know

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Speaker 3: something bad is coming.

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Speaker 1: Tourists.

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Speaker 3: Tourists start to go down to Wall Street to see

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Speaker 3: like they heard, like something bad's gonna happen.

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Speaker 1: The crash is coming.

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Speaker 3: So they're in the streets. Police have set up barricades.

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Speaker 3: People are bringing tour buses down parade. But for they

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Speaker 3: are looking to lose at a car crash, right, And

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Speaker 3: there is this sickening feeling inside the investment firms that

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Speaker 3: they need to sell. They need to get out. Everybody

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Speaker 3: needs to get out.

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Speaker 1: That's a bad moment.

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Speaker 3: That is a bad moment. The most famous speculator of

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Speaker 3: the day was nowhere to be seen in Wall Street

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Speaker 3: or downtown. Jesse Livermore. On this morning of Tuesday, he

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Speaker 3: leaves at exactly seven to twenty from his mansion. He's

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Speaker 3: got a driver's driving into the city. He says, take

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Speaker 3: me uptown. Doesn't go to Wall Street. He goes to

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Speaker 3: his office on Fifth Avenue, and this office was amazing,

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Speaker 3: mahogany leather seats. They've got these giant chalkboards and people

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Speaker 3: are writing stock quotes on the chalkboards, like.

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Speaker 1: The Bloomberg terminal of its day is a kid writing

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Speaker 1: stock quotes.

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Speaker 3: He got forty stock tickers under the glass. You know

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Speaker 3: they're going along right. No one is allowed to talk

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Speaker 3: because he wants complete silence on this day because he

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Speaker 3: wants to sit and he wants to think about what

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Speaker 3: is happening in the stock market.

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Speaker 1: I love that. So like downtown people are screaming and

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Speaker 1: yelling and then just it's just in the silent office.

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Speaker 3: Well, Jesse Livermore at this point has been trading stocks

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Speaker 3: for like thirty five years. He started when he was

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Speaker 3: fourteen years old. Super famous. He's made millions, lost millions.

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Speaker 3: And he had this theory that you should not be

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Speaker 3: guided by emotion in the stock market, and on this

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Speaker 3: day the stock market was nothing but emotion. He just

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Speaker 3: wanted to sit and think about it. I'm Jacob Goldstein,

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Speaker 3: I'm Robert Smith, and this is Business History.

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Speaker 1: A show about the history of business. There you go.

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Speaker 3: Today we begin a series of stories about the great

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Speaker 3: minds of the stock market over the last one hundred years.

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Speaker 3: We're going to look at people who took the stock

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Speaker 3: market from wild West gambling to intellectual investing. We'll look

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Speaker 3: at the speculator today. Jesse Livermore. That's the wild West

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Speaker 3: gambling part YEP. The Great investor, Warren Buffett.

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Speaker 1: The Great Investor.

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Speaker 3: You love it when I say that, Warren Buffett.

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Speaker 1: Warren Buffett, and Jim Simon's the quant guy who brought

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Speaker 1: math to the games. So much big and so much money.

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Speaker 3: Now, you could look at this series and I don't

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Speaker 3: blame you as this sort of guide to getting rich. Right,

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Speaker 3: these people did it. Maybe you can do it too,

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Speaker 3: but I see it completely differently. Right, So, each of

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Speaker 3: these men discovered a flaw in the stock market. They

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Speaker 3: exploited that flaw, they made money, and by doing so,

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Speaker 3: they closed the flaw and the flaw didn't exist anymore.

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Speaker 3: So this is really a story as you look about

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Speaker 3: this history of investing of the stock market getting better,

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Speaker 3: more efficient.

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Speaker 1: Uh huh. Right, people find a flawed they get rich.

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Speaker 1: Other people see that person getting rich and as a result,

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Speaker 1: basically that flaw goes away.

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Speaker 3: Jesse Livermore, who we're going to talk about today, he

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Speaker 3: saw the flaw, he made the bets, he made fortunate

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Speaker 3: and fame. He became a legend on Wall Street, and

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Speaker 3: then he met a tragic end.

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Speaker 1: So, Robert, where are we starting the story of Jesse Livermore.

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Speaker 3: Let's start in a farm in rural Massachusetts. The year

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Speaker 3: is eighteen seventy seven, and Jesse Livermore is born to

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Speaker 3: a farming family at the time. You know, this is

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Speaker 3: not how you would start in a career in Wall Street.

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Speaker 3: But Jesse Livermore had this gift for math, for numbers.

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Speaker 3: He would later say that he could like feel numbers

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Speaker 3: in his soul, whatever that means. Right, But at the

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Speaker 3: age of fourteen, probably to escape going to the fields,

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Speaker 3: he goes to Boston instead, and he shows up at

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Speaker 3: the storefront of a stockbroker Payne Weber heard of it, yes,

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Speaker 3: to exist in our childhood, right right, right, So that

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Speaker 3: was the stock office at the time. And he walks

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Speaker 3: inside and he sees this scene and it's more like

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Speaker 3: a gentleman's club than anything.

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Speaker 1: Right.

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Speaker 3: There are chairs where people can sit and watch the

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Speaker 3: stocks move. And the way they watch the move is

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Speaker 3: there are these giants chalkboards, and there are these boys

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Speaker 3: the chalkboard boys who would write the quotes in the

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Speaker 3: little squares on the chalkboard, and the men would sit

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Speaker 3: there and drink and watch this, and there's the ticker

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Speaker 3: going off in the background with all the stock quotes,

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Speaker 3: and they update.

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Speaker 1: Edison had invented a better stock ticker. Right, that was

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Speaker 1: like one of his early things. Yeah, so this was

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Speaker 1: like a big thing, right. It was like going to

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Speaker 1: the horse races or something. Right, And so for years

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Speaker 1: Livermore is a chalkboard boy. And he says that he

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Speaker 1: starts to see patterns in the numbers. Right, He's doing

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Speaker 1: numbers all day long, and he could tell if a

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Speaker 1: stock is moving and it's going to keep moving or

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Speaker 1: whether it's plateaued. He has these premonitions. I tend to

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Speaker 1: be skeptical of that in general. Right, Like there's this

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Speaker 1: thing today called technical analysis where people talk about these

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Speaker 1: like patterns in the stock chart. Seems dubious to me.

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Speaker 1: But maybe Livermore knew what he was doing.

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Speaker 3: Well. I mean this is obviously before computers or even

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Speaker 3: ways that people were recording long term trends in stocks.

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Speaker 1: I guess the classic thing is if you're the first

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Speaker 1: one to see a pattern maybe you can make money

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Speaker 1: off it, and maybe the person who figures it out,

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Speaker 1: if the person wants to write them in chalk from

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Speaker 1: morning tonight and is a math genius.

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Speaker 3: Yeah, he's like a walking Bloomberg terminal.

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Speaker 1: Love that.

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Speaker 3: So he does this for a while and he decides

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Speaker 3: I can do this, I can make money. So he

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Speaker 3: pools money with one of the other chalkboard boys and

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Speaker 3: they go to something called a bucket shop. Yes, now,

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Speaker 3: a bucket shop is a really like sketchy stock trading parlor.

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Speaker 3: The name comes apparently from the UK, where there were

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Speaker 3: certain places that would collect the slop that came from bars,

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Speaker 3: put it in a bucket, warm beer that ran off

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Speaker 3: the bar, collected in a bucket, and then sell that.

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Speaker 1: Is that true? Don't tell me if it's not true.

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Speaker 1: Is it true? It's true? I want it to be.

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Speaker 3: You want a cheap beer, you don't care if it's

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Speaker 3: warm because you're British.

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Speaker 1: The backwash bar, the King's backwash and arms. You can

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Speaker 1: get a good chip there, a chip buddy. You know

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Speaker 1: a chip buddy.

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Speaker 3: I do know what a chip buddy is.

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Speaker 1: French fries, sandwich. I can't believe it.

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Speaker 3: So you know what it goes great with that a

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Speaker 3: bucket of warm slop.

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Speaker 1: Oh god, yes.

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Speaker 3: So these bucket shops morphed into these sketchy stock parlors,

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Speaker 3: And the thing about them is they are not actually

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Speaker 3: buying and selling stocks. At the bucket shops, they are

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Speaker 3: making bets on the stock prices, but without any of

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Speaker 3: the like buying and selling and that sort of thing.

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Speaker 3: So essentially, they make a bet that a stock price

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Speaker 3: is going to go up. Everyone watches the ticker. If

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Speaker 3: it goes up, you make money. If it goes down,

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Speaker 3: you lose money.

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Speaker 1: So the bucket shop is like a book taking bets

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Speaker 1: on the football game, and they just need to have

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Speaker 1: basically the same amount of money on both sides. And

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Speaker 1: presumably they take some vig or something.

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Speaker 3: Yeah, and you could even borrow money. You could do

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Speaker 3: this on margin. So essentially you could use a small

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Speaker 3: amount of money to make large bets. Yea stock goes down,

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Speaker 3: they take everything. Stock goes up, you can make a

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Speaker 3: lot of money.

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Speaker 1: And zero day options today are a little bit like this,

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Speaker 1: right there are a way to make what is sort

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Speaker 1: of essentially a leverage bet on what the stock is

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Speaker 1: going to do today, and you're not buying or selling

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Speaker 1: the stock.

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Speaker 3: It's it's pure speculation. Yeah, I guess that's I guess

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Speaker 3: that's right. So you know it has more to do

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Speaker 3: with luck really than anything else.

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Speaker 1: Or if you are a math genius who spent ten

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Speaker 1: years writ numbers out of chalkboard.

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Speaker 3: You have it in the fingers. Apparently Livermore was so

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Speaker 3: gifted to the bucket shops that he gets the highest honor,

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Speaker 3: which is to be banned from them.

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Speaker 1: Oh just like sports betting apps today, literally what sports

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Speaker 1: meta apps do too.

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Speaker 3: He's really good at they ban him. There are stories

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Speaker 3: of him putting on disguises no, and sneaking into the

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Speaker 3: shops with like a mustache or a little wig or something,

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Speaker 3: getting caught.

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Speaker 1: John Livermore, you don't know, man, I'm Jesse Jones.

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Speaker 3: So you make some money. He gets thro out of

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Speaker 3: these shops. At the age of twenty, he has enough

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Speaker 3: money to finally hit the big leagues. He goes to

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Speaker 3: Wall Street and he goes to the office of E. F.

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Speaker 1: Hutton. Also heard of the F. Hutton. This is not

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Speaker 1: the investment company of E. F. Hutton.

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Speaker 3: He goes to E. F. Hutton, the man himself.

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Speaker 1: Oh my dad took sat prep from Kaplan, from the

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Speaker 1: man in Brooklyn in the nineteen fifties. So he said, Kaplin,

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Speaker 1: what kind of boards you need to get into Princeton?

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Speaker 1: And Kaplan said the moon.

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Speaker 3: That's too good. Well, well let's imagine that. EF Hutton

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Speaker 3: said that. You know, Jesse Livermore has got his small

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Speaker 3: amount of money and E. F. Hutton's life give it

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Speaker 3: a try, kid, Okay, and Jesse Livermore boy plunger, they

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Speaker 3: had called him, and the plungers plunger. He plunges into stocks,

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Speaker 3: He goes to the stock mark, he buys some stuff,

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Speaker 3: He gets his ass absolutely kicked. Didn't see that content

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Speaker 3: to him because of this weird little thing.

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Speaker 1: Right.

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Speaker 3: He is used to betting on numbers. He bets on

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Speaker 3: a number. Second later the number goes up, the number

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Speaker 3: goes to top life.

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Speaker 1: This is his bucket seup life.

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Speaker 3: Yeah, but when you're actually trading stocks, you have to

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Speaker 3: make a bid on the stock. You see what the

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Speaker 3: price is and it's delayed a little bit, right, you

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Speaker 3: make a bid on the stock that needs to be

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Speaker 3: written down and handed to someone on the floor who

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Speaker 3: has to make that bid.

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Speaker 1: Right. This is the dude's yelling at each other era

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Speaker 1: of stock trading.

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Speaker 3: Yes, and so that takes time and you maybe can

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Speaker 3: get the bid you want, maybe you can't. All this

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Speaker 3: has to go through all these systems, right, great example

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Speaker 3: of this is the Panic of nineteen oh one.

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Speaker 1: One of the lesser known panics.

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Speaker 3: This one is like a railroad panic.

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Speaker 1: Right, we should say, I mean this word panic a

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Speaker 1: thing that happened about every ten years. You certainly in

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Speaker 1: the eighteen hundreds and into the nineteen hundreds was there

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Speaker 1: were these financial crises that they called panics. So the

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Speaker 1: panic of nineteen oh one is one of these.

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Speaker 3: Yeah, and it was a classic right. A bank had

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Speaker 3: lent a lot of money to some enterprise that went under.

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Speaker 3: The bank needed to recall them all the loans that

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Speaker 3: it made. It had no money in its faults. People

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Speaker 3: wanted to pull all the money out of the banks.

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Speaker 3: They had to shut down the banks. Classic panic. People

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Speaker 3: in the streets.

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Speaker 1: Right.

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Speaker 3: So, right before the Panic of nineteen oh one, Jesse Livermore,

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Speaker 3: he has one of his intuitions. He's like, I think

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Speaker 3: the stock market's going to go down. I think there's

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Speaker 3: problems here.

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Speaker 1: Right.

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Speaker 3: He wants to bet against us steel. Okay, classic stock right,

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Speaker 3: have the.

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Speaker 1: Biggest companies in America at that time, Carnegie Morgan.

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Speaker 3: So it's at like, let's say, one hundred dollars, right,

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Speaker 3: So he shorts the stock. He bets against it. He

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Speaker 3: thinks it's the price is going to go down, and

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Speaker 3: he's absolutely right. He bets against it. Price starts to

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Speaker 3: go down. He thinks, I did it, I did it,

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Speaker 3: I predicted the future.

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Speaker 1: I am rich. And then he sees the volume.

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Speaker 3: Thousands and thousands of shares are trading hands, and he

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Speaker 3: realizes that he's in line to trade. He has bet

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Speaker 3: against the stock, but his trade hasn't actually been put in,

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Speaker 3: as the stock is going down. By the time he

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Speaker 3: actually sells this stock, it's at eighty five dollars. This

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Speaker 3: is as low as he thought it was going to go.

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Speaker 3: And he's like, oh no, I don't have the price

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Speaker 3: I want. So he wants to start buying back. He's like,

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Speaker 3: it's gonna go back up. He starts to go buying back,

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Speaker 3: but again his order is standing in line. He has

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Speaker 3: to wait. He goes up, up and up until it's

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Speaker 3: over one hundred. Again, he loses on the way down.

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Speaker 3: He loses on the way up.

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Speaker 1: So I guess the limit order had not been invented yet.

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Speaker 1: Just just to be clear, today, it doesn't have to

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Speaker 1: happen to you because you can say, yes, I will sell,

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Speaker 1: but only at this price. And if it's not at

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Speaker 1: this price, I don't want to sell. It was hard

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Speaker 1: to handwrite that on a little slippery paper, too complicated

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Speaker 1: that the dude's yelling on the floor. So liberal tip

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Speaker 1: use living orders instead of market orders is not investing advice.

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Speaker 3: Liver War loses twenty five thousand dollars because of this right.

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Speaker 3: And this was an important lesson because he realized that

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Speaker 3: timing is everything right as it is and many things

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Speaker 3: in life. So he goes back to the bucket shops

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Speaker 3: and make some more money.

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Speaker 1: It comes back to Wall Street. It's a new wig.

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Speaker 3: He gets a new wig. I think he goes to

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Speaker 3: like Saint Louis or something. Well, they don't recognize him. Yeah, yeah, yeah,

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Speaker 3: So this time when he comes to Wallstree, he's going

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Speaker 3: to do it completely different. Okay, this is when he

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Speaker 3: sets up his own office, gets his own stock ticker,

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Speaker 3: and eventually sets up this whole system to get ahead

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Speaker 3: of what's on the ticker.

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Speaker 1: Right.

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Speaker 3: Oh, he has his own chalkboard boys, and they would

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Speaker 3: have wired headphones communicating directly with the floor of the

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Speaker 3: stock exchange so we didn't have to wait for the

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Speaker 3: piece of paper to come out. He could beat the

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Speaker 3: ticker by minutes. Wow, I know. And he has the

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Speaker 3: information ahead of time.

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Speaker 1: That's free money.

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Speaker 3: That is free money. And I mean he's not the

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Speaker 3: only person who does this, but yeah, this is something

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Speaker 3: that the big wigs were doing.

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Speaker 1: And this is a perennial finance story, right, I mean

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Speaker 1: you have Reuiter's was a dude named Reuter who was

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Speaker 1: using like the telegraph and carrier pigeons to deliver information.

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Speaker 1: And then all the way into the like twenty first century,

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Speaker 1: you had people like building their own private I think

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Speaker 1: it was fiber optic lines between Chicago and New York

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Speaker 1: to be like a millisecond faster and make money.

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Speaker 3: Like this is this story. This is this story. He's

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Speaker 3: got the system. Now, he's got a stash of money,

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Speaker 3: and he's about to enter the perfect period for him,

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Speaker 3: which is the nineteen tens and nineteen twenties. These wild

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Speaker 3: stock swings, right, and if you're someone who has money

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Speaker 3: and information and all of a sudden there's volatility, you

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Speaker 3: are set up to make a ton of money. Yeah.

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Speaker 1: I mean in general, traders love volatility, right, They love

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Speaker 1: a market that goes up and down a.

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Speaker 3: Lot, exactly because you can make big bets and you

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Speaker 3: can recover from bad bets.

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Speaker 1: Right.

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Speaker 3: This time is also essential for another reason, which is,

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Speaker 3: you know, this is the coming.

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Speaker 1: Into the Roaring twenties. Right.

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Speaker 3: We've talked about the Gilded Age and the nineteen tens

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Speaker 3: and nineteen ten twenties before in our Thomas Edison show.

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Speaker 3: People have this new technology of electricity and electric lights

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Speaker 3: and cars and refrigerators and washing machines. It's an age

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Speaker 3: of technological miracles.

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Speaker 1: Yeah, a mass consumption is beginning, right, But we haven't

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Speaker 1: talked about the finance side of this. Because people want

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Speaker 1: to make these big purchases, and all of a sudden

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Speaker 1: they're able to borrow money to do so. Banks are

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Speaker 1: willing to lend so that people can take part in

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Speaker 1: this amazing technological transformation. And at the same time, people

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Speaker 1: are looking at the stock market. Right, what was once.

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Speaker 3: This fringe activity for rich people in the late eighteen hundreds,

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Speaker 3: All of a sudden, regular people can buy stocks and

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Speaker 3: guess what they can borrow money to do that too wrong?

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Speaker 3: What could possibly go wrong? They would borrow money, buy

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Speaker 3: the stocks, make some more money, buy a refrigerator, and

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Speaker 3: then put more money into stocks and borrow more. So

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Speaker 3: this is the era where Jesse Livermore is primed, primed

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Speaker 3: to start to make his move to make his millions,

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Speaker 3: and he does it by betting against all those schmos.

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Speaker 1: I love dot Mark.

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Speaker 4: After the break, all.

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Speaker 1: Right, the ads are over, and Robert you teased us

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Speaker 1: before the break with Livermore betting against the American dream

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Speaker 1: of the nineteen twenties of Jesse Livermore essentially shorting the boom, right,

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Speaker 1: shorting the market. And I will just say for now,

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Speaker 1: I think shorts are vastly underrated. More on that later.

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Speaker 3: Yeah, and you should know that like short sell is

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Speaker 3: a time honor tradition. The very first short was in

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Speaker 3: like the sixteen hundreds for the very first on the

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Speaker 3: first stock.

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Speaker 1: Yeah, the first stock, the dutchy Cidia company. And like

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Speaker 1: a minute later, this guy's like, I've got an idea

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Speaker 1: I could make money if I think it's going to

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Speaker 1: go down.

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Speaker 3: And it's immensely logical. Right, stocks go up, stocks go down,

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Speaker 3: you can bet they'll go up. You can bet they

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Speaker 3: will go down. And yet psychologically, psychologically it feels bad

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Speaker 3: to know that someone is betting for prices to go

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Speaker 3: down for you know, bad things to happen, and the

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Speaker 3: rest of us because most people are long stocks, right,

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Speaker 3: they're betting they go up, and the rest of us

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Speaker 3: want it to go up.

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Speaker 1: Yeah, they're either long stocks or they're just not in

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Speaker 1: the market. Right. It's like there's a sort of vibe

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Speaker 1: of like, if you can't say something nice, don't say

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Speaker 1: it at all. But whatever, shortening is a thing, and

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Speaker 1: mechanically it's it's interesting, right You What you do is

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Speaker 1: you actually borrow a stock that you don't own, and

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Speaker 1: then you sell it and then later you buy it

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Speaker 1: back and pay back them alone when it's cheap. When

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Speaker 1: it's cheap, you hope, and if the price goes down,

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Speaker 1: you make money, and if the price goes up, you

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Speaker 1: lose money. So one of Jesse Livermore's first big, big,

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Speaker 1: big shorts was he bet against the railroad union Pacific.

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Speaker 1: You can't bet against America any more than that, right,

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Speaker 1: Like they're uniting America.

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Speaker 3: Everyone's piling to railroad stocks, and I don't know, he

393
00:19:34,400 --> 00:19:38,800
Speaker 3: gets a premonition and idea. Nobody really knows, but he

394
00:19:39,080 --> 00:19:42,119
Speaker 3: bets against the stock and what do you know, nineteen

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Speaker 3: oh six San Francisco earthquake. Huh, train station's destroyed, rails twisted.

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Speaker 3: It takes a while for the news to filter out,

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Speaker 3: but sure enough the stock goes down and eventually it plunges.

398
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Speaker 3: Jesse Livermore makes a quarter of a million dollars. Okay,

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Speaker 3: nineteen oh six, Right, he's short the market again in

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Speaker 3: nineteen oh seven.

401
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Speaker 1: I know what's gonna happen in the year two. It's

402
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Speaker 1: another panic, a big one. One of my favorite panics,

403
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Speaker 1: if I might eventually.

404
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Speaker 3: This came from some investors trying to cor to the

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Speaker 3: market in copper perfect and you know, they had borrowed

406
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Speaker 3: all this money to do so. They were going to

407
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Speaker 3: control the market, set the prices, make millions. They failed

408
00:20:24,359 --> 00:20:26,639
Speaker 3: to do so, they're out of business. The banks that

409
00:20:26,720 --> 00:20:29,560
Speaker 3: lent the money they're in trouble. People know this and

410
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Speaker 3: start to pull their money out. It's a classic bank run.

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Speaker 1: And remember at the time, the US didn't have deposit

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Speaker 1: insurance like we have today, the government that didn't stand

413
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Speaker 1: behind the banks, and there also was no central bank,

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Speaker 1: the Federal Reserve didn't exist yet, and in fact, part

415
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Speaker 1: of the reason the Fed was created was for moments

416
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Speaker 1: like this, right, these moments when even though the economy

417
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Speaker 1: is basically sound, everybody is trying to pull their money

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Speaker 1: out of the bank. Everybody wants to call in loans

419
00:20:55,320 --> 00:20:58,680
Speaker 1: and nobody wants to lend, right, And so you need

420
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Speaker 1: some lender of last resort, somebody to lend money to

421
00:21:01,680 --> 00:21:04,760
Speaker 1: people who are basically sound but just need money because

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Speaker 1: it's a panic.

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Speaker 3: Yeah, and the way its infected the stock market, right,

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Speaker 3: because the stock market technically wouldn't have that much connection

425
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Speaker 3: to copper in some of those happening.

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Speaker 1: With a bank.

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Speaker 3: Except at this time, not everyone was in the stock market,

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Speaker 3: but the few who were were doing this margin trick.

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Speaker 3: They were borrowing money. They're borrowing money from banks to

430
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Speaker 3: buy stocks, investment firms to buy stocks. And I didn't

431
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Speaker 3: believe this was possible. But companies would lend money to

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Speaker 3: people so that they could buy stock in their own company. Yeah,

433
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Speaker 3: they would issue stock, take that cash, lend it to

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Speaker 3: people who would then buy more of the stock of

435
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Speaker 3: the company.

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Speaker 1: Tell me they did it again after that seems bad, right,

437
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Speaker 1: So everyone's leveraged.

438
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Speaker 3: The panic comes and here is Jesse Livermore somehow short

439
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Speaker 3: the market.

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Speaker 1: He thinks it's going to go down.

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Speaker 3: Now, what happened in the panic? Is JP Morgan, very

442
00:22:00,359 --> 00:22:03,240
Speaker 3: rich and powerful banker at the time. He eventually gets

443
00:22:03,240 --> 00:22:06,280
Speaker 3: a bunch of bankers together and says, we're going to

444
00:22:06,359 --> 00:22:09,159
Speaker 3: get together the loans and guarantees and money to stabilize

445
00:22:09,200 --> 00:22:09,520
Speaker 3: the market.

446
00:22:09,600 --> 00:22:12,560
Speaker 1: Yeah, basically, because the US didn't have a central JP

447
00:22:12,720 --> 00:22:15,880
Speaker 1: Morgan was playing the role of the central bank.

448
00:22:15,920 --> 00:22:18,479
Speaker 3: There's another dude, Jesse Livermore, who has bet against the

449
00:22:18,480 --> 00:22:22,040
Speaker 3: market and is doing extraordinarily well during this panic. Right,

450
00:22:22,440 --> 00:22:25,960
Speaker 3: he is apparently up around a million dollars and he

451
00:22:26,040 --> 00:22:29,600
Speaker 3: hasn't even like covered his short bets yet. He just

452
00:22:29,720 --> 00:22:32,159
Speaker 3: expects the market to go down and down, and he

453
00:22:32,280 --> 00:22:36,960
Speaker 3: is driving it down. He wants this to go to

454
00:22:37,000 --> 00:22:39,480
Speaker 3: the bottom so that he can make his big score,

455
00:22:39,520 --> 00:22:41,959
Speaker 3: the biggest score of all time. Right, he's thirty one

456
00:22:42,080 --> 00:22:45,200
Speaker 3: years old. The boy Plunger is finally at the center

457
00:22:45,240 --> 00:22:49,320
Speaker 3: of the action and a messenger comes to him. A

458
00:22:49,400 --> 00:22:54,840
Speaker 3: messenger comes to him from JP Morgan, and JP Morgan says,

459
00:22:55,880 --> 00:22:59,000
Speaker 3: for the good of the country, we need you to

460
00:22:59,040 --> 00:23:02,760
Speaker 3: start buying again. We need you to close your shorts

461
00:23:02,880 --> 00:23:07,800
Speaker 3: and to stop pressuring the market. And he does it. Huh,

462
00:23:07,840 --> 00:23:10,000
Speaker 3: he does it. He buys, the stock market starts to

463
00:23:10,000 --> 00:23:13,040
Speaker 3: go up. So Jesse Livermore ends up making more money,

464
00:23:13,119 --> 00:23:15,400
Speaker 3: ends up making three million dollars, but more than that.

465
00:23:16,280 --> 00:23:20,320
Speaker 3: And you tell people about this. J. P. Morgan knows

466
00:23:20,359 --> 00:23:24,760
Speaker 3: his name. A great man came to him and asked

467
00:23:24,840 --> 00:23:28,080
Speaker 3: him to hold back. And this is a beautiful moment

468
00:23:28,119 --> 00:23:30,680
Speaker 3: for Jesse Livermore. He finally feels like he has made

469
00:23:30,720 --> 00:23:31,480
Speaker 3: it on Wall Street.

470
00:23:31,680 --> 00:23:31,880
Speaker 1: Huh.

471
00:23:32,600 --> 00:23:36,320
Speaker 3: At this point, Jesse Livermore is a famous invested right

472
00:23:36,400 --> 00:23:38,680
Speaker 3: at age of thirty one, He's all over the papers.

473
00:23:38,840 --> 00:23:42,600
Speaker 3: Eventually he talks to a reporter Edwin Lefevre. I don't

474
00:23:42,600 --> 00:23:44,719
Speaker 3: know how to quite say his name, but he has

475
00:23:44,760 --> 00:23:48,639
Speaker 3: this famous book called Reminiscences of a Stock Operator, and

476
00:23:48,680 --> 00:23:52,440
Speaker 3: it's essentially this fictionalized biography of Jesse Livermore as told

477
00:23:52,440 --> 00:23:54,600
Speaker 3: to the reporter. So Jesse Livermore gives him all of

478
00:23:54,640 --> 00:23:57,919
Speaker 3: these notes and Edwin sort of makes up this story,

479
00:23:57,960 --> 00:24:00,120
Speaker 3: but it's essentially everyone knows that this is the story

480
00:24:00,119 --> 00:24:04,840
Speaker 3: of Jesse Livermore, and this book is still to this

481
00:24:04,920 --> 00:24:07,679
Speaker 3: day famous on Wall Street. It is still a book

482
00:24:08,200 --> 00:24:10,639
Speaker 3: that people buy or give to you know, give to

483
00:24:10,680 --> 00:24:12,320
Speaker 3: you on the first day of your trading at a

484
00:24:12,359 --> 00:24:15,400
Speaker 3: firm because it has all of these like hard bitten

485
00:24:15,520 --> 00:24:17,840
Speaker 3: rules for stock trading, right.

486
00:24:17,920 --> 00:24:19,360
Speaker 1: Or what do you say it still is? You mean

487
00:24:19,440 --> 00:24:23,160
Speaker 1: it was twenty five years ago. I'm curious. I think

488
00:24:23,359 --> 00:24:25,000
Speaker 1: today they'd be like, what's a book?

489
00:24:25,320 --> 00:24:27,199
Speaker 3: Yeah? I think I looked it up. It is still

490
00:24:27,240 --> 00:24:30,840
Speaker 3: like not a bestseller, but like people still buy this book. Right,

491
00:24:31,160 --> 00:24:33,479
Speaker 3: and so his number one rule and the rules are

492
00:24:33,480 --> 00:24:33,840
Speaker 3: in the book.

493
00:24:33,920 --> 00:24:34,080
Speaker 1: Right.

494
00:24:34,240 --> 00:24:36,560
Speaker 3: Number one rule is don't take tips of any kind,

495
00:24:36,600 --> 00:24:39,480
Speaker 3: no matter where they come from. Huh, says the man

496
00:24:39,480 --> 00:24:41,720
Speaker 3: who often gives tips to the newspaper. But yes, but

497
00:24:41,800 --> 00:24:42,520
Speaker 3: don't take.

498
00:24:42,359 --> 00:24:45,040
Speaker 1: The tips, right, So he knows you shouldn't it right.

499
00:24:45,520 --> 00:24:48,520
Speaker 3: Don't worry about catching the top or the bottom of

500
00:24:48,560 --> 00:24:49,080
Speaker 3: the market.

501
00:24:49,560 --> 00:24:52,160
Speaker 1: Smart, hard, very smart to this day. Right.

502
00:24:52,600 --> 00:24:55,520
Speaker 3: Keep the number of stocks you track to a manageable number.

503
00:24:56,400 --> 00:24:58,560
Speaker 1: Disagree with that one. Love an index fund? They hadn't

504
00:24:58,560 --> 00:24:59,600
Speaker 1: been invented yet though.

505
00:24:59,840 --> 00:25:01,720
Speaker 3: Is this before index funds? He had to keep it

506
00:25:01,760 --> 00:25:04,160
Speaker 3: all in his head. Don't buy too many stocks, right,

507
00:25:04,760 --> 00:25:07,879
Speaker 3: take your losses quickly. And don't brood about them.

508
00:25:08,320 --> 00:25:11,800
Speaker 1: I mean amazing to say, so hard to do in life.

509
00:25:12,200 --> 00:25:13,080
Speaker 1: Just in investing.

510
00:25:13,160 --> 00:25:15,320
Speaker 3: He had a rule where if a stock was down

511
00:25:15,400 --> 00:25:17,760
Speaker 3: ten percent and he was betting that it would go up,

512
00:25:17,800 --> 00:25:20,160
Speaker 3: he'd just sell it and then not think about it again.

513
00:25:20,640 --> 00:25:22,640
Speaker 1: I mean, I'm still thinking about the lasagna I made

514
00:25:22,720 --> 00:25:25,160
Speaker 1: last night that definitely should have been four noodles wide,

515
00:25:25,200 --> 00:25:27,560
Speaker 1: but I only did three, so all the goog slipped

516
00:25:27,560 --> 00:25:28,120
Speaker 1: out on the scene.

517
00:25:28,160 --> 00:25:29,639
Speaker 3: It was down ten percent in volumes.

518
00:25:29,720 --> 00:25:31,840
Speaker 1: Yes, you should have you should have sold it, should

519
00:25:31,840 --> 00:25:33,040
Speaker 1: have should have just got rid of it.

520
00:25:33,359 --> 00:25:37,280
Speaker 3: So Jesse livermore super famous at this point, and this

521
00:25:37,359 --> 00:25:42,399
Speaker 3: actually gives him the final key to become the investor

522
00:25:42,440 --> 00:25:44,280
Speaker 3: who's going to become like just to go back over

523
00:25:44,320 --> 00:25:47,679
Speaker 3: his career, right, master of the numbers, of no emotion,

524
00:25:47,920 --> 00:25:49,280
Speaker 3: of just looking at the numbers.

525
00:25:49,400 --> 00:25:49,600
Speaker 1: Right.

526
00:25:50,160 --> 00:25:52,639
Speaker 3: Then he had the technology, you know, he had the

527
00:25:52,680 --> 00:25:55,840
Speaker 3: way to get information quick and make moves quickly. And

528
00:25:55,880 --> 00:26:00,600
Speaker 3: the third one is if you have the money and

529
00:26:00,640 --> 00:26:04,000
Speaker 3: you are rich and famous and people listen to you,

530
00:26:04,000 --> 00:26:06,359
Speaker 3: you can move markets yourself.

531
00:26:06,520 --> 00:26:06,680
Speaker 1: Hah.

532
00:26:07,240 --> 00:26:10,919
Speaker 3: You can start to use that fame to like nudge

533
00:26:10,960 --> 00:26:14,280
Speaker 3: things here and there, to make things happen.

534
00:26:14,320 --> 00:26:16,560
Speaker 1: Kind of foreshadowing the Buffet story that we're going to

535
00:26:16,640 --> 00:26:20,200
Speaker 1: get to later. Right, Like, in certain contexts, Buffett can

536
00:26:20,240 --> 00:26:23,400
Speaker 1: get a good deal because he's Buffett, Like you're saying,

537
00:26:23,400 --> 00:26:25,200
Speaker 1: this is Jesse Livermore at this point.

538
00:26:25,480 --> 00:26:28,720
Speaker 3: Yeah, And this is when the stock market is reacting

539
00:26:28,760 --> 00:26:31,680
Speaker 3: in such a way that people are sort of looking

540
00:26:31,760 --> 00:26:34,320
Speaker 3: at the second and third order things, not just like

541
00:26:34,640 --> 00:26:36,280
Speaker 3: is this a good company? Is it going to go up?

542
00:26:36,280 --> 00:26:39,160
Speaker 3: But like who's investing this way? Who's investing that way?

543
00:26:39,200 --> 00:26:41,480
Speaker 3: You know, is someone trying to corner this market? Maybe

544
00:26:41,480 --> 00:26:42,479
Speaker 3: I should get in on it?

545
00:26:42,600 --> 00:26:42,800
Speaker 1: Right?

546
00:26:43,119 --> 00:26:47,040
Speaker 3: Is somebody making the stock go up? They had these

547
00:26:47,080 --> 00:26:50,360
Speaker 3: things called syndicates, right, you know, the these trading clubs

548
00:26:50,520 --> 00:26:52,840
Speaker 3: where people would essentially decide they were going to make

549
00:26:52,840 --> 00:26:55,520
Speaker 3: a stock go up. They would all buy it, trade

550
00:26:55,560 --> 00:26:58,800
Speaker 3: it to each other, I know, not legal now, pump

551
00:26:58,880 --> 00:27:02,000
Speaker 3: the stock up, and then they would when the stock

552
00:27:02,040 --> 00:27:03,480
Speaker 3: price is up, they would sell it and make a

553
00:27:03,480 --> 00:27:07,320
Speaker 3: ton of money, which sounds bad, except the rumors would

554
00:27:07,359 --> 00:27:09,879
Speaker 3: start to go through the stock market. Oh so and

555
00:27:09,920 --> 00:27:11,760
Speaker 3: so is starting a club. They're going to make the

556
00:27:11,760 --> 00:27:14,199
Speaker 3: stock price go up, and people would pile into it

557
00:27:14,440 --> 00:27:15,399
Speaker 3: knowing it was fake.

558
00:27:15,880 --> 00:27:18,320
Speaker 1: Yeah, okay, right, so everybody is just gambling. They're just

559
00:27:18,359 --> 00:27:22,600
Speaker 1: all kind of spinning the roulette wheel. And it was legal, right. Importantly,

560
00:27:23,160 --> 00:27:25,720
Speaker 1: the sort of modern regime of market regulation that we

561
00:27:25,760 --> 00:27:27,280
Speaker 1: live in now didn't exist.

562
00:27:27,480 --> 00:27:31,600
Speaker 3: Yeah, and Livermore, he's basically living the super rich guy

563
00:27:31,640 --> 00:27:35,000
Speaker 3: life at this point. He's got the shirts of Egyptian cotton.

564
00:27:35,320 --> 00:27:38,800
Speaker 3: He has this chain that he always wears. It has

565
00:27:38,880 --> 00:27:41,720
Speaker 3: a little gold pencil on one side and a little

566
00:27:41,720 --> 00:27:44,320
Speaker 3: pocket knife on the other, which I don't know, maybe

567
00:27:44,359 --> 00:27:46,800
Speaker 3: is to carve the pencil or maybe shive the guy

568
00:27:46,920 --> 00:27:49,359
Speaker 3: on the other end of the deal. Yeah, exactly. If

569
00:27:49,400 --> 00:27:51,880
Speaker 3: you were trying to corner the cotton market, people were

570
00:27:51,920 --> 00:27:54,840
Speaker 3: going along with you. He apparently put lifts in his shoes.

571
00:27:54,880 --> 00:27:56,600
Speaker 3: He was already a tall guy, but this made him

572
00:27:56,640 --> 00:27:57,600
Speaker 3: six feet tall.

573
00:27:58,280 --> 00:28:00,560
Speaker 1: That's tall. If lifts six feet tall.

574
00:28:00,400 --> 00:28:04,240
Speaker 3: He's well for the time. Right, he's married, but he's

575
00:28:04,320 --> 00:28:08,200
Speaker 3: dating famous show girls on the side. Right, it's all

576
00:28:08,240 --> 00:28:10,560
Speaker 3: in the papers. People want to be Jesse Livermore. And

577
00:28:10,560 --> 00:28:13,520
Speaker 3: in the nineteen twenties, there is an easy way to

578
00:28:13,520 --> 00:28:16,439
Speaker 3: do it. All you have to do is bet on

579
00:28:16,520 --> 00:28:22,000
Speaker 3: the hot technology of the time, a technology that would

580
00:28:22,119 --> 00:28:24,480
Speaker 3: transform the country a miracle.

581
00:28:25,000 --> 00:28:30,159
Speaker 1: Everyone wanted to be part of the magic, which was

582
00:28:31,280 --> 00:28:38,320
Speaker 1: Radio Radio Corporation of America RCI. Ladies and gentlemen, it's

583
00:28:38,360 --> 00:28:38,920
Speaker 1: the radio.

584
00:28:39,480 --> 00:28:40,520
Speaker 3: I don't know why you have to do that. They

585
00:28:40,520 --> 00:28:41,240
Speaker 3: didn't have headphones.

586
00:28:41,440 --> 00:28:43,360
Speaker 1: You love the radio. I should just say, as a

587
00:28:43,400 --> 00:28:46,960
Speaker 1: personal manner, you love radio more than anyone I know.

588
00:28:47,640 --> 00:28:51,360
Speaker 1: Under the age of eighty, I still listen to AM radio.

589
00:28:52,040 --> 00:28:53,640
Speaker 1: That's how much I love radio.

590
00:28:54,040 --> 00:28:57,920
Speaker 3: And at the time, like you could see that, people

591
00:28:58,040 --> 00:29:00,440
Speaker 3: thought like, oh, this could be everything, Like this is

592
00:29:00,440 --> 00:29:03,800
Speaker 3: how we will learn and communicate, and like all of

593
00:29:03,800 --> 00:29:06,720
Speaker 3: our entertainment right would be on the radio. They could

594
00:29:06,960 --> 00:29:10,640
Speaker 3: see that other things would come right. But I think

595
00:29:10,640 --> 00:29:14,200
Speaker 3: the important thing was that it was so accessible to

596
00:29:14,240 --> 00:29:16,040
Speaker 3: be a part of it. Like at this point, the

597
00:29:16,040 --> 00:29:18,640
Speaker 3: stock market was easy. Right at the beginning of the twenties,

598
00:29:19,280 --> 00:29:23,520
Speaker 3: RCA stock is one dollar right nineteen twenty nine, one

599
00:29:23,600 --> 00:29:26,840
Speaker 3: hundred and fourteen dollars a share, and there were stock

600
00:29:26,880 --> 00:29:29,440
Speaker 3: splits in there, so like you were making a ton

601
00:29:29,680 --> 00:29:32,920
Speaker 3: of money. It didn't seem like anything could happen. It's

602
00:29:32,920 --> 00:29:33,880
Speaker 3: the tech stock.

603
00:29:33,640 --> 00:29:36,800
Speaker 1: Of its day, It's the Nvidia of its day or whatever.

604
00:29:36,960 --> 00:29:41,200
Speaker 3: Exactly, and at this point, like more and more money

605
00:29:41,240 --> 00:29:44,360
Speaker 3: is coming into the market. There are stories of investment

606
00:29:44,400 --> 00:29:47,760
Speaker 3: firms saying, like, you know, where are we going to

607
00:29:47,840 --> 00:29:51,680
Speaker 3: get more investors. One head of investment firm like looking

608
00:29:51,680 --> 00:29:54,400
Speaker 3: out on the streets of the city and saying, they're

609
00:29:54,440 --> 00:29:57,720
Speaker 3: all out there, they can all be investors. And apparently

610
00:29:57,720 --> 00:30:00,840
Speaker 3: at the time there are sort of stock touts, you know,

611
00:30:00,880 --> 00:30:03,920
Speaker 3: who would stop people coming out of bars and restaurants

612
00:30:03,960 --> 00:30:05,760
Speaker 3: and be like, you know, you want to buy some

613
00:30:05,800 --> 00:30:08,880
Speaker 3: stock in Radio Corporation of America.

614
00:30:08,920 --> 00:30:11,000
Speaker 1: First of all, always say no if someone asked you that.

615
00:30:11,120 --> 00:30:14,160
Speaker 1: But if you said yes, what would happen?

616
00:30:14,920 --> 00:30:18,640
Speaker 3: I think they would drag you down to some investment

617
00:30:18,680 --> 00:30:20,920
Speaker 3: firm and they would get your money. And remember they're

618
00:30:20,960 --> 00:30:24,160
Speaker 3: going to lend you the money to buy more stock.

619
00:30:24,640 --> 00:30:27,840
Speaker 3: And the stock goes up. You feel rich, they feel rich,

620
00:30:28,040 --> 00:30:31,760
Speaker 3: everybody feels rich. And at this time we now have

621
00:30:32,200 --> 00:30:35,160
Speaker 3: the Central Bank, the Federal Reserve is in place, so

622
00:30:35,240 --> 00:30:37,960
Speaker 3: the Panics have sort of died down a little bit.

623
00:30:38,240 --> 00:30:41,440
Speaker 3: Stocks are going up. People are pouring in and they're

624
00:30:41,440 --> 00:30:43,880
Speaker 3: doing these tricks that they call painting the tape, which

625
00:30:44,080 --> 00:30:46,800
Speaker 3: just ways in which you can get the numbers to

626
00:30:46,880 --> 00:30:50,080
Speaker 3: go up inside. Investors can do this because at the time,

627
00:30:50,520 --> 00:30:52,240
Speaker 3: there are not a lot of rules in the market.

628
00:30:52,760 --> 00:30:56,440
Speaker 3: Because the rules were set up for rich people. They

629
00:30:56,440 --> 00:30:59,800
Speaker 3: didn't really conceive of the fact that someone with a

630
00:30:59,840 --> 00:31:02,400
Speaker 3: real job would put their entire life savings.

631
00:31:02,520 --> 00:31:05,960
Speaker 1: Yeah, and in general, the economy was much less regulated.

632
00:31:06,080 --> 00:31:09,360
Speaker 1: Finance was less regulated. Right, there's still no insurance for banks.

633
00:31:09,400 --> 00:31:12,200
Speaker 1: The idea is like people are going to do whatever

634
00:31:12,200 --> 00:31:13,360
Speaker 1: they're going to do. Good luck.

635
00:31:13,800 --> 00:31:16,640
Speaker 3: So Jesse Livermore looks out on this and he has

636
00:31:16,680 --> 00:31:20,280
Speaker 3: one of his intuitions and it's not the craziest intuition

637
00:31:20,320 --> 00:31:23,240
Speaker 3: in the world, which is, you know, maybe the stock

638
00:31:23,280 --> 00:31:26,720
Speaker 3: market's too high. I think I'm going to bet against it.

639
00:31:27,440 --> 00:31:30,840
Speaker 3: And he had this technique, not advising this. I don't

640
00:31:30,840 --> 00:31:34,280
Speaker 3: know if it works, but at the time there were

641
00:31:34,400 --> 00:31:38,040
Speaker 3: sort of big stocks and smaller stocks, stocks that had

642
00:31:38,120 --> 00:31:41,080
Speaker 3: huge volume, and stocks that people barely traded in. And

643
00:31:41,120 --> 00:31:43,080
Speaker 3: he looked at the big stocks, the ones that it

644
00:31:43,120 --> 00:31:46,080
Speaker 3: was hard to manipulate the markets, maybe even the RCAs right,

645
00:31:46,480 --> 00:31:48,600
Speaker 3: and he found that they had sort of hit a plateau,

646
00:31:49,680 --> 00:31:52,240
Speaker 3: but a lot of the smaller stocks were continuing to

647
00:31:52,240 --> 00:31:53,680
Speaker 3: bid up in price.

648
00:31:54,080 --> 00:31:57,880
Speaker 1: The smaller stock is the easier it is to manipulate

649
00:31:57,920 --> 00:32:00,320
Speaker 1: the price, right, Like you couldn't get twelve to your

650
00:32:00,360 --> 00:32:02,480
Speaker 1: buddies and move the price of RCA because there was

651
00:32:02,520 --> 00:32:04,920
Speaker 1: too much money in it. But some little company nobody'd

652
00:32:04,960 --> 00:32:06,160
Speaker 1: ever heard of yesterday. Sure.

653
00:32:06,280 --> 00:32:10,160
Speaker 3: Yeah, So in nineteen twenty nine, remember everyone's watching each other,

654
00:32:10,800 --> 00:32:14,800
Speaker 3: he begins a seat plan right, apparently has hundreds of

655
00:32:14,800 --> 00:32:18,880
Speaker 3: people working for him, starting to short various stocks. He

656
00:32:18,920 --> 00:32:22,720
Speaker 3: doesn't want anyone to know that Jesse Livermore hates the market.

657
00:32:22,760 --> 00:32:24,920
Speaker 3: He wants someone to think Jesse Livermore is all in right,

658
00:32:25,280 --> 00:32:27,480
Speaker 3: and so he makes these bets that the market's going

659
00:32:27,520 --> 00:32:30,440
Speaker 3: to go down, huh in secret, in secret, huh.

660
00:32:30,800 --> 00:32:31,400
Speaker 1: And then.

661
00:32:32,720 --> 00:32:37,760
Speaker 3: Black Thursday, Black Monday, Black Tuesday. Right, he's eleven percent down,

662
00:32:37,800 --> 00:32:40,880
Speaker 3: thirteen percent down. There's a book that I love called

663
00:32:41,040 --> 00:32:44,440
Speaker 3: Devil Take the Hindmost by Edward Chancellor.

664
00:32:45,000 --> 00:32:46,760
Speaker 1: Have you read this? I have not. I don't know.

665
00:32:46,800 --> 00:32:47,360
Speaker 1: It really good.

666
00:32:47,360 --> 00:32:50,600
Speaker 3: It's a history of speculation goes for hundreds of years.

667
00:32:50,880 --> 00:32:53,160
Speaker 1: The name Devil Take the Most. It's like the thing

668
00:32:53,200 --> 00:32:56,520
Speaker 1: of like if a bear is chasing you in another guy,

669
00:32:56,560 --> 00:32:58,320
Speaker 1: you don't have to be faster than the bear. You

670
00:32:58,440 --> 00:33:00,360
Speaker 1: just have to be faster than the other guy. It's

671
00:33:00,400 --> 00:33:03,720
Speaker 1: that basically, right, Yeah, it's the speculator's credo, right, I

672
00:33:03,840 --> 00:33:05,719
Speaker 1: just got to get out before the other schmuck.

673
00:33:06,040 --> 00:33:09,600
Speaker 3: He has this great description of black Tuesday, when the

674
00:33:09,600 --> 00:33:13,400
Speaker 3: stock market crashes. I love this quote. On the floor,

675
00:33:13,640 --> 00:33:16,880
Speaker 3: a broker grabbed a messenger by his hair. Another fled

676
00:33:16,920 --> 00:33:22,640
Speaker 3: the floor, screaming like a madman. Jackets were torn, collars dislodged.

677
00:33:22,960 --> 00:33:26,280
Speaker 3: Clerks in their frenzy lashed out against each other. And

678
00:33:26,320 --> 00:33:30,760
Speaker 3: then then the technology starts to fail. The Transatlantic cable broke,

679
00:33:31,240 --> 00:33:35,320
Speaker 3: the ticker stopped running, the telephone lines became clogged, and

680
00:33:35,360 --> 00:33:39,240
Speaker 3: apparently at the time, Western Union hired taxi cabs to

681
00:33:39,320 --> 00:33:42,400
Speaker 3: send messages across New York. At one point on Wall

682
00:33:42,440 --> 00:33:45,920
Speaker 3: Street and step on it, and there is Jesse Livermore.

683
00:33:46,160 --> 00:33:49,680
Speaker 3: He's sitting in silence on Fifth Avenue, or he's trying

684
00:33:49,720 --> 00:33:54,640
Speaker 3: to sit in silence because the phone keeps ringing and

685
00:33:54,840 --> 00:33:57,680
Speaker 3: people are starting to blame him for the crash, getting

686
00:33:57,720 --> 00:33:59,640
Speaker 3: death threats. People are like, is this you? Are you

687
00:33:59,760 --> 00:34:02,360
Speaker 3: doing this? He denies causing the panic to The New

688
00:34:02,440 --> 00:34:05,560
Speaker 3: York Times, and a lot of people don't believe him, right,

689
00:34:05,600 --> 00:34:08,840
Speaker 3: because he's pulled off this before, I made millions of dollars, right,

690
00:34:09,440 --> 00:34:13,160
Speaker 3: They think he has some control over the market. But

691
00:34:13,239 --> 00:34:16,279
Speaker 3: the truth is scarier. The truth is that finally no

692
00:34:16,319 --> 00:34:19,920
Speaker 3: one has control over the market. When the stock market

693
00:34:19,960 --> 00:34:22,960
Speaker 3: was smaller, you would hear these stories of big investors

694
00:34:23,000 --> 00:34:27,200
Speaker 3: coming in moving the market right, cornering the cotton trade.

695
00:34:27,160 --> 00:34:30,080
Speaker 1: Or like nineteen oh seven JP Morgan getting everybody together

696
00:34:30,160 --> 00:34:31,040
Speaker 1: to stop the panic.

697
00:34:31,680 --> 00:34:35,040
Speaker 3: But in nineteen twenty nine, because of their efforts, the

698
00:34:35,080 --> 00:34:39,120
Speaker 3: stock market is now so big that no individual can

699
00:34:39,280 --> 00:34:42,800
Speaker 3: do anything about it. And some bankers did try in

700
00:34:43,239 --> 00:34:46,520
Speaker 3: the few days before this Black Tuesday to pour money

701
00:34:46,560 --> 00:34:48,640
Speaker 3: into the market, and it was like a bottomless pit.

702
00:34:48,840 --> 00:34:52,120
Speaker 3: It just kept going down, and so by the end

703
00:34:52,840 --> 00:34:58,760
Speaker 3: of Black Tuesday, people are just ruined, absolutely ruined. Jesse

704
00:34:58,840 --> 00:35:02,440
Speaker 3: Livermore on Fifth Avenue gets in his rolls Royce and

705
00:35:02,560 --> 00:35:04,839
Speaker 3: goes back to Long Island to his mansion. The first

706
00:35:04,840 --> 00:35:07,239
Speaker 3: thing he notices is that his family isn't there. His

707
00:35:07,280 --> 00:35:11,319
Speaker 3: wife and his two kids are gone, nowhere to be seen.

708
00:35:12,160 --> 00:35:15,680
Speaker 3: He notices the paintings have been taken off the walls,

709
00:35:16,480 --> 00:35:18,880
Speaker 3: the Persian rug rolled up and gone.

710
00:35:19,080 --> 00:35:22,000
Speaker 1: Right. He's like, where is everybody where's all our stuff?

711
00:35:22,200 --> 00:35:23,680
Speaker 1: He goes up to the safe.

712
00:35:24,000 --> 00:35:28,680
Speaker 3: She's got right opens the safe. His wife's jewelry is gone.

713
00:35:29,000 --> 00:35:33,000
Speaker 3: It's expensive collection. He's panicked and he's, you know, thinking,

714
00:35:33,040 --> 00:35:34,280
Speaker 3: I don't know you have they been taken?

715
00:35:34,440 --> 00:35:34,640
Speaker 1: You know?

716
00:35:35,120 --> 00:35:37,640
Speaker 3: Did they flee? Like like, what has happened to my family?

717
00:35:37,680 --> 00:35:42,880
Speaker 3: And he runs downstairs sees some servants. He's like, what happened?

718
00:35:42,920 --> 00:35:47,080
Speaker 3: What happened to the family, And they say, oh, go

719
00:35:47,120 --> 00:35:50,439
Speaker 3: look in the chauffeur's house. All right, So trumps down

720
00:35:50,440 --> 00:35:52,800
Speaker 3: to the chauffeur's house and there they are his wife

721
00:35:52,800 --> 00:35:56,120
Speaker 3: and two kids, like in one room with the paintings

722
00:35:56,600 --> 00:35:59,880
Speaker 3: and the Persian rugs and the jewels, and his wife's

723
00:35:59,920 --> 00:36:03,520
Speaker 3: like I heard on the radio. I heard on the

724
00:36:03,600 --> 00:36:08,680
Speaker 3: radio that everyone is broke, everyone has lost their money.

725
00:36:08,760 --> 00:36:10,840
Speaker 3: And I wanted to make sure we had all the

726
00:36:10,880 --> 00:36:14,120
Speaker 3: stuff and protect it and if we need to like

727
00:36:15,120 --> 00:36:18,000
Speaker 3: hawk these jewels, like we can do it to survive.

728
00:36:18,560 --> 00:36:22,799
Speaker 3: And Jesse Livermore is like, oh no, no, no, no, no,

729
00:36:22,960 --> 00:36:25,240
Speaker 3: you don't need to hawk your jewels. I just had

730
00:36:25,520 --> 00:36:28,440
Speaker 3: the best day I have ever had in the stock market.

731
00:36:28,880 --> 00:36:33,879
Speaker 3: We're gonna be fine. How much did he make. He

732
00:36:33,920 --> 00:36:39,960
Speaker 3: made profit and equity one hundred million dollars. Wow, that's

733
00:36:39,960 --> 00:36:44,040
Speaker 3: more than one point eight billion dollars in today's money.

734
00:36:44,080 --> 00:36:45,080
Speaker 1: That's extraordinary.

735
00:36:45,400 --> 00:36:48,640
Speaker 3: It's extraordinary in one day. And it's even more extraordinary

736
00:36:48,800 --> 00:36:52,440
Speaker 3: because who can you even brag to everyone you know

737
00:36:53,239 --> 00:36:58,719
Speaker 3: is bankrupt, the country is devastated, and you just made

738
00:36:58,760 --> 00:37:00,279
Speaker 3: one point eight billion dollars.

739
00:37:01,239 --> 00:37:24,200
Speaker 1: We'll be back in just a minute. It's the end

740
00:37:24,200 --> 00:37:26,600
Speaker 1: of the ads, Robert, Let's do the end of the show.

741
00:37:27,160 --> 00:37:30,480
Speaker 3: So after Jesse Livermore pulls off what people would call

742
00:37:30,520 --> 00:37:34,919
Speaker 3: the greatest trade ever, we don't know much about how

743
00:37:34,960 --> 00:37:38,720
Speaker 3: he celebrated, because the man who basically had a reporter

744
00:37:38,800 --> 00:37:41,120
Speaker 3: or write a fictional autobiography of him, all of a

745
00:37:41,160 --> 00:37:42,200
Speaker 3: sudden isn't really.

746
00:37:42,040 --> 00:37:45,560
Speaker 1: Talking to the press. Good move, Yes, we do know that.

747
00:37:45,600 --> 00:37:49,040
Speaker 3: In nineteen thirty one, he hired the entire Barnum and

748
00:37:49,080 --> 00:37:52,400
Speaker 3: Bailey circus to perform on his lawn for his son's

749
00:37:52,440 --> 00:37:53,200
Speaker 3: eighth birthday.

750
00:37:53,360 --> 00:37:56,279
Speaker 1: Bad move, nineteen thirty one. Depression is setting in. Don't

751
00:37:56,320 --> 00:37:59,200
Speaker 1: hire the literal circus to perform on your literal front lawn.

752
00:37:59,600 --> 00:38:04,279
Speaker 3: It seems it seems like a bad look, right, But

753
00:38:04,800 --> 00:38:07,719
Speaker 3: as I read the rest of his story. This may

754
00:38:07,760 --> 00:38:11,200
Speaker 3: have been the best moment that he had, you know,

755
00:38:11,320 --> 00:38:13,479
Speaker 3: celebrating his on his birthday. There's like a fire breather

756
00:38:13,560 --> 00:38:19,279
Speaker 3: on his lawn. Elephants, right, trapeze artists. Because everything that

757
00:38:19,320 --> 00:38:21,759
Speaker 3: comes after this, I don't know. It just feels like

758
00:38:23,200 --> 00:38:27,480
Speaker 3: it is a letdown after his huge success and like

759
00:38:27,640 --> 00:38:31,759
Speaker 3: some literal bad bets. Right, we know he's still making

760
00:38:31,800 --> 00:38:35,560
Speaker 3: bets on the stock market, amazingly enough, right after getting

761
00:38:35,560 --> 00:38:36,520
Speaker 3: all that money.

762
00:38:36,640 --> 00:38:38,360
Speaker 1: Like, why would you stop at that point?

763
00:38:38,600 --> 00:38:41,520
Speaker 3: Well, you know, it's funny. In the book nineteen twenty nine,

764
00:38:41,600 --> 00:38:44,320
Speaker 3: the new book by Andrew Ross Sorkin, Jesse Livermore is

765
00:38:44,320 --> 00:38:47,920
Speaker 3: complaining about some bad bets and he was forced to

766
00:38:47,960 --> 00:38:51,319
Speaker 3: ask the financierarm reading from the book now nineteen twenty nine,

767
00:38:51,520 --> 00:38:53,920
Speaker 3: is forced to ask the financier Arthur A. Robertson for

768
00:38:53,960 --> 00:38:57,200
Speaker 3: a loan of five thousand dollars, and Robertson says, do

769
00:38:57,320 --> 00:39:00,040
Speaker 3: men of your kind put away ten million dollars where

770
00:39:00,040 --> 00:39:03,280
Speaker 3: nobody can ever touch it. Jesse Livermore says, young man,

771
00:39:03,400 --> 00:39:05,279
Speaker 3: what's the use of having ten million if you can't

772
00:39:05,320 --> 00:39:12,160
Speaker 3: have big money? Like he's an addict and he loves them,

773
00:39:12,719 --> 00:39:15,440
Speaker 3: even though he could retire obviously for the rest of

774
00:39:15,440 --> 00:39:18,440
Speaker 3: his life. When he appears in the newspaper, Jesse Livermore

775
00:39:18,680 --> 00:39:22,080
Speaker 3: is dating more showgirls, He's fighting with his wife, his

776
00:39:22,120 --> 00:39:25,200
Speaker 3: wife is drinking more. His kids he barely saw them

777
00:39:25,200 --> 00:39:28,400
Speaker 3: and send them way to private school. He ends up

778
00:39:28,400 --> 00:39:32,879
Speaker 3: getting a divorce, and there's this really sad story about

779
00:39:32,920 --> 00:39:36,080
Speaker 3: the divorce. He goes to Nevada to get like an

780
00:39:36,120 --> 00:39:39,120
Speaker 3: easy divorce, right, stands with his wife in front of

781
00:39:39,160 --> 00:39:43,120
Speaker 3: the judge, and Jesse Livermore is like, take anything you want,

782
00:39:43,560 --> 00:39:47,080
Speaker 3: take it all, Like, just take anything you want. The

783
00:39:47,120 --> 00:39:51,000
Speaker 3: divorce is final, and his wife turns to her lover

784
00:39:51,239 --> 00:39:55,640
Speaker 3: in the courtroom and has the same judge marry them

785
00:39:56,120 --> 00:39:58,200
Speaker 3: right there minutes after the divorce.

786
00:39:58,239 --> 00:40:00,240
Speaker 1: Does is it actually make you sad to hear that story?

787
00:40:00,320 --> 00:40:02,320
Speaker 1: I'll admit I find it funny? Does that make me

788
00:40:02,360 --> 00:40:06,080
Speaker 1: a horrible human being? I'm like, listen, you spent more

789
00:40:06,120 --> 00:40:08,120
Speaker 1: time with Jesse Livermore than I did. Maybe that's why

790
00:40:08,440 --> 00:40:11,479
Speaker 1: I grew fond of him, right, And I also saw

791
00:40:11,520 --> 00:40:15,919
Speaker 1: this weird thing, right that you can have so much

792
00:40:15,960 --> 00:40:19,840
Speaker 1: success and still like ruin your life, fall into absolute

793
00:40:19,880 --> 00:40:22,839
Speaker 1: depression like the country itself, right, and then there's all

794
00:40:22,880 --> 00:40:26,160
Speaker 1: this anger at Jesse Livermore for what they felt was

795
00:40:26,239 --> 00:40:29,640
Speaker 1: like a trick or a manipulation of the market. And

796
00:40:29,719 --> 00:40:32,879
Speaker 1: you know, it's like in the Boom Times, it's all

797
00:40:33,040 --> 00:40:35,400
Speaker 1: Jay Gatsby and everyone wants the gold chains with the

798
00:40:35,480 --> 00:40:38,680
Speaker 1: little pencil and the little carving knife on the other side.

799
00:40:39,360 --> 00:40:42,560
Speaker 1: But after the crash, everybody's like, oh, we got to

800
00:40:42,560 --> 00:40:45,480
Speaker 1: have congressional hearings. We have to have regulations, we have

801
00:40:45,560 --> 00:40:48,040
Speaker 1: to punish the bankers, we have to punish the investors,

802
00:40:48,680 --> 00:40:52,560
Speaker 1: and especially the short right, especially like not only was

803
00:40:52,600 --> 00:40:55,480
Speaker 1: this guy, some Wall Street guy who never contributed anything,

804
00:40:55,880 --> 00:40:57,959
Speaker 1: he bet against everybody.

805
00:40:58,400 --> 00:41:01,680
Speaker 3: And so of course, of course there are congress people

806
00:41:01,680 --> 00:41:04,640
Speaker 3: who are like, we need to ban short selling. This

807
00:41:04,680 --> 00:41:07,360
Speaker 3: wouldn't happen if people weren't betting that the stock market

808
00:41:07,360 --> 00:41:10,920
Speaker 3: goes down, which, if you know anything about economics, is

809
00:41:10,960 --> 00:41:11,880
Speaker 3: a terrible idea.

810
00:41:12,360 --> 00:41:15,640
Speaker 1: Oh yeah, I mean I love shorts, right, Like you know,

811
00:41:15,680 --> 00:41:18,479
Speaker 1: I mean there is this bigger question that's really interesting here, right,

812
00:41:18,520 --> 00:41:22,640
Speaker 1: and that is what's the stock market for? Yeah?

813
00:41:22,920 --> 00:41:23,799
Speaker 3: To get rich? Right?

814
00:41:23,840 --> 00:41:27,000
Speaker 1: Well, yes, yes, I mean that it is useful that

815
00:41:27,719 --> 00:41:30,359
Speaker 1: ordinary people can get a piece of big companies. That

816
00:41:30,400 --> 00:41:34,160
Speaker 1: actually is a good thing. But that doesn't mean that

817
00:41:34,200 --> 00:41:37,520
Speaker 1: it's good for the stock market to always go up, right, Like,

818
00:41:38,560 --> 00:41:43,319
Speaker 1: you want stock prices to reflect reality, right, And I

819
00:41:43,400 --> 00:41:46,279
Speaker 1: know this may seem naive people like, oh so, dom,

820
00:41:46,320 --> 00:41:48,720
Speaker 1: are you really that dumb? I think in the long run,

821
00:41:48,960 --> 00:41:50,399
Speaker 1: they're better than anything else.

822
00:41:50,480 --> 00:41:50,640
Speaker 3: Right.

823
00:41:50,920 --> 00:41:53,280
Speaker 1: You want the price of a company's stock to reflect

824
00:41:53,320 --> 00:41:56,320
Speaker 1: the you know, net present value of all that company's

825
00:41:56,320 --> 00:41:59,480
Speaker 1: profits forever. You actually do want that because that means

826
00:41:59,719 --> 00:42:02,319
Speaker 1: that the better companies will get more investment money and

827
00:42:02,360 --> 00:42:06,160
Speaker 1: the worst companies will get less investment money. And shorts

828
00:42:06,440 --> 00:42:08,880
Speaker 1: play a really important role in this, right, because the

829
00:42:08,920 --> 00:42:11,759
Speaker 1: companies incentive are all on the side of talking about

830
00:42:11,760 --> 00:42:14,279
Speaker 1: how they are. The investors who are long who are

831
00:42:14,280 --> 00:42:17,000
Speaker 1: buying stock, have the same incentive to talk about how

832
00:42:17,000 --> 00:42:19,719
Speaker 1: great they are. The short is the only person in

833
00:42:19,760 --> 00:42:23,080
Speaker 1: the system who has a financial incentive to just look

834
00:42:23,120 --> 00:42:25,480
Speaker 1: at a company and say, like, I think it's too

835
00:42:25,480 --> 00:42:28,600
Speaker 1: expensive or in some cases, I think it's a fraud. Right,

836
00:42:29,000 --> 00:42:31,800
Speaker 1: And like, you want people to be able to profit

837
00:42:31,880 --> 00:42:34,440
Speaker 1: by seeing that a company is too expensive. It makes

838
00:42:34,680 --> 00:42:37,080
Speaker 1: the market work better, It makes the economy work better,

839
00:42:37,120 --> 00:42:39,560
Speaker 1: and it makes me. It drives me up the wall

840
00:42:40,440 --> 00:42:41,440
Speaker 1: where people don't get that.

841
00:42:41,480 --> 00:42:44,160
Speaker 3: Frankly, we talk about the wisdom of crowds, but the

842
00:42:44,239 --> 00:42:46,920
Speaker 3: key to that is that people have to have different

843
00:42:47,000 --> 00:42:49,040
Speaker 3: opinions about what's going to happen, and they have to

844
00:42:49,120 --> 00:42:53,879
Speaker 3: be able to risk their own money on a bet,

845
00:42:54,000 --> 00:42:56,880
Speaker 3: essentially in order to show you how serious they are

846
00:42:56,880 --> 00:42:57,239
Speaker 3: about it.

847
00:42:57,360 --> 00:42:58,880
Speaker 1: Yes, like, what if I told you there was a

848
00:42:58,880 --> 00:43:02,680
Speaker 1: way that people could be financially incentivized to go root

849
00:43:02,760 --> 00:43:07,080
Speaker 1: out companies that are lying about themselves. Great, let's do that. Okay,

850
00:43:07,120 --> 00:43:08,640
Speaker 1: it's shorting now.

851
00:43:08,680 --> 00:43:11,879
Speaker 3: Clearly after the crash, some rules need to be put

852
00:43:11,880 --> 00:43:15,879
Speaker 3: in place, not banning short selling, but you know there

853
00:43:15,880 --> 00:43:18,439
Speaker 3: are little rules like, oh, I don't know. Companies should

854
00:43:18,520 --> 00:43:21,960
Speaker 3: have to report regularly about how they're doing and how

855
00:43:22,040 --> 00:43:24,600
Speaker 3: much money they have. You shouldn't be able to have

856
00:43:24,840 --> 00:43:27,840
Speaker 3: insider trades that inflate the price of a stock, you know,

857
00:43:27,960 --> 00:43:30,160
Speaker 3: painting the stock as they called it. You shouldn't be

858
00:43:30,160 --> 00:43:31,839
Speaker 3: able to do that. And if you're going to try

859
00:43:31,880 --> 00:43:34,120
Speaker 3: to corner the market or take over a company, you

860
00:43:34,120 --> 00:43:36,360
Speaker 3: should have to declare when you have a certain amount

861
00:43:36,400 --> 00:43:39,320
Speaker 3: of stock in that company. These are all good things transparency.

862
00:43:39,480 --> 00:43:42,720
Speaker 3: And there's lots of arguments about investment banks and banks

863
00:43:42,760 --> 00:43:44,839
Speaker 3: and what their rules and reserves and all this stuff

864
00:43:44,880 --> 00:43:49,680
Speaker 3: should be. But clearly we are in an age of

865
00:43:49,719 --> 00:43:53,319
Speaker 3: sobriety and of regulation, and it's just a matter of

866
00:43:53,320 --> 00:43:56,000
Speaker 3: how much regulation there is going to be People like

867
00:43:56,080 --> 00:43:59,200
Speaker 3: Jesse Livermore this day of like, I'm going to feel

868
00:43:59,320 --> 00:44:01,440
Speaker 3: the numbers. I can do anything I want.

869
00:44:02,239 --> 00:44:04,879
Speaker 1: I can secretly have a bunch of people go make

870
00:44:04,920 --> 00:44:07,840
Speaker 1: shorts without saying I'm the one doing it. Yeah, that

871
00:44:08,040 --> 00:44:10,359
Speaker 1: is going to disappear. And to be clear of these

872
00:44:10,440 --> 00:44:12,960
Speaker 1: rules that are coming into place in the kind of

873
00:44:13,000 --> 00:44:15,400
Speaker 1: mid thirties, right just as Jesse Livermore is sort of

874
00:44:15,440 --> 00:44:18,919
Speaker 1: going down, These are creating the market regime we still

875
00:44:18,920 --> 00:44:21,880
Speaker 1: live in, right, Like the SEC the security is an

876
00:44:21,880 --> 00:44:24,480
Speaker 1: exchange commission. This is created at this time, like the

877
00:44:24,520 --> 00:44:28,880
Speaker 1: modern market is born. Just at the end of Livermore's career.

878
00:44:28,680 --> 00:44:31,120
Speaker 3: And there really isn't a place for Jesse Livermore anymore.

879
00:44:31,600 --> 00:44:36,200
Speaker 3: He declares bankruptcy. What happened to the hundred million dollars?

880
00:44:36,320 --> 00:44:38,440
Speaker 3: I have no idea. I don't know if he had

881
00:44:38,480 --> 00:44:41,000
Speaker 3: any idea. He made bets. They were bad bets. He

882
00:44:41,040 --> 00:44:45,400
Speaker 3: had the divorce, bankruptcy, so many mistresses, right, he just

883
00:44:46,440 --> 00:44:51,680
Speaker 3: lost the money. And then years after the crash November

884
00:44:51,680 --> 00:44:55,720
Speaker 3: twenty seventh, nineteen forty, Jesse Livermore still at an office.

885
00:44:55,760 --> 00:44:57,960
Speaker 3: He was still trading. He still wanted to like have

886
00:44:58,000 --> 00:45:00,759
Speaker 3: another big score. And he goes to the bar at

887
00:45:00,800 --> 00:45:03,720
Speaker 3: the Sherry Netherlander Hotel where he had lived for a while,

888
00:45:04,160 --> 00:45:05,799
Speaker 3: and they put a Manhattan in front of him. He

889
00:45:05,800 --> 00:45:08,560
Speaker 3: didn't even have to ask. He was your regular Manhattan.

890
00:45:08,800 --> 00:45:13,960
Speaker 3: And he's scribbling in a notebook. People recall this and

891
00:45:14,120 --> 00:45:17,920
Speaker 3: they give him another Manhattan drinks it keeps scribbling the notebook,

892
00:45:18,120 --> 00:45:20,319
Speaker 3: and then he excuses himself and he goes to the

893
00:45:20,320 --> 00:45:25,200
Speaker 3: cloakroom there at the hotel and he shoots himself with

894
00:45:25,440 --> 00:45:28,280
Speaker 3: one of his pistols he had in his immense collection

895
00:45:28,320 --> 00:45:30,560
Speaker 3: of firearms that he had when he was rich. He

896
00:45:30,640 --> 00:45:33,520
Speaker 3: was cremated the next day. Apparently only a few people

897
00:45:33,520 --> 00:45:35,840
Speaker 3: showed up for his funeral. A newspaper looked into the

898
00:45:35,840 --> 00:45:40,640
Speaker 3: probate records and the final tally on his big chalkboard

899
00:45:40,680 --> 00:45:44,399
Speaker 3: ten thousand dollars in assets, three hundred and sixty one

900
00:45:44,520 --> 00:45:48,719
Speaker 3: thousand dollars in liabilities, he died underwater.

901
00:45:48,800 --> 00:45:49,440
Speaker 1: Died underwater.

902
00:45:50,360 --> 00:45:52,560
Speaker 3: It reminds me of a saying he used to have,

903
00:45:52,640 --> 00:45:55,280
Speaker 3: and remember he would pass out these sayings like stock

904
00:45:55,320 --> 00:45:58,520
Speaker 3: tips right. He said, there's nothing like losing all you

905
00:45:58,600 --> 00:46:01,480
Speaker 3: have in the world for teaching you what not to do.

906
00:46:01,840 --> 00:46:04,920
Speaker 1: Robert, what's the next show in your Great Investors series?

907
00:46:06,200 --> 00:46:09,840
Speaker 3: Nineteen thirty, the year after the Great Stock market Crash?

908
00:46:10,280 --> 00:46:13,200
Speaker 3: A young man is born, almost the baby if you will.

909
00:46:14,000 --> 00:46:15,080
Speaker 1: Keep going, keep going.

910
00:46:15,480 --> 00:46:19,160
Speaker 3: At the infant a baby in arms. And that baby's

911
00:46:19,200 --> 00:46:23,839
Speaker 3: name Warren Buffett. What's his middle name? I wanted to say,

912
00:46:23,840 --> 00:46:24,239
Speaker 3: Warren G.

913
00:46:24,360 --> 00:46:32,839
Speaker 1: Buffett, Warren G. Buffett, Warren Buffett middle name Edward one,

914
00:46:33,040 --> 00:46:37,840
Speaker 1: Edward Buffett, Baby Buffett. You can reach us via email

915
00:46:38,080 --> 00:46:42,520
Speaker 1: at Business History, at Pushkin dot fm FML like the radio,

916
00:46:44,120 --> 00:46:46,960
Speaker 1: my Twitter, it will always be Twitter to me. Handle

917
00:46:47,200 --> 00:46:50,279
Speaker 1: is just Jacob Goldstein or at Jacob Goldstein. As we

918
00:46:50,320 --> 00:46:52,360
Speaker 1: used to say, how do people reach you? Robert Smith,

919
00:46:52,640 --> 00:46:56,959
Speaker 1: I'm on X. I'm at Radio Smith Radius smith Man

920
00:46:56,960 --> 00:47:00,000
Speaker 1: loves the Radio. Our producer is Gabriel Hunter Chang, our

921
00:47:00,040 --> 00:47:03,680
Speaker 1: engineer is Sarah Bruguier, and our showrunner is Ryan Dilly.

922
00:47:03,800 --> 00:47:06,080
Speaker 1: I'm Jacob Goldstein. And I'm Robert Smith. We'll be back

923
00:47:06,120 --> 00:47:09,520
Speaker 1: next week with another episode of Business History, a show

924
00:47:09,520 --> 00:47:17,680
Speaker 1: about the history wait for it, of business Robert Smith.

925
00:47:17,760 --> 00:47:20,840
Speaker 1: As you know, there is nowhere in Pushkin's office to

926
00:47:21,880 --> 00:47:24,680
Speaker 1: make a video to make a video podcast, which is unfortunate.

927
00:47:24,880 --> 00:47:27,480
Speaker 1: We tried and it was described as two gray men

928
00:47:27,520 --> 00:47:31,359
Speaker 1: in a gray box, and reasonably so fortunately for us.

929
00:47:31,360 --> 00:47:35,200
Speaker 1: In an amazing coincidence, literally down the hall from Pushkin's office,

930
00:47:35,480 --> 00:47:38,200
Speaker 1: there is the showroom of a company called Buzzy Space.

931
00:47:39,400 --> 00:47:41,480
Speaker 1: This is a company is where we're sitting right now,

932
00:47:41,840 --> 00:47:44,400
Speaker 1: and what they do is they design furniture and acoustic

933
00:47:44,480 --> 00:47:48,400
Speaker 1: solutions that make I'm reading here workplace is more comfortable,

934
00:47:48,520 --> 00:47:52,399
Speaker 1: more creative, and more fun. I would even say cozy.

935
00:47:52,280 --> 00:47:57,760
Speaker 1: Their furniture is like sort of curved and interesting colors,

936
00:47:57,840 --> 00:48:01,040
Speaker 1: and I guess keeps things quiet. Yes, honestly, I wish

937
00:48:01,200 --> 00:48:04,520
Speaker 1: our office was this showroom. You can find more at

938
00:48:04,640 --> 00:48:09,440
Speaker 1: Buzzy dot Space. That's Buzzi dot Space.