Last week, I wrote about one of Jesse Livermore’s triumphs. This week, however, it’s a tragedy I’m writing about.
On March 19 1934, Time Magazine reported Jesse Livermore’s final bankruptcy.
From the 1929 pinnacle of his career, when he shorted the market for a profit of $100 million, less than five years had passed.
A few months earlier, Jesse Livermore had gone missing and his wife had called in the police. A day after disappearing he had returned home, walking unsteadily. He had spent the night in a hotel and had awoken with a blank mind. Reading newspaper headlines about his disappearance brought him to his senses. His doctor’s verdict: “Amnesia nervous breakdown.”
It’s likely that during this period of his life, Livermore was suffering badly from the clinical depression he suffered from at various times.
He listed liabilities of $2,259,212.48, and assets of $184,900, mostly life insurance. (He also had large annuities bought to protect his family in the event of bankruptcy.)
Livermore’s financial plight also produced further evidence, adding to his reputation as a womanizer:
To Lucille Ballantine – a dancer – he had promised to pay $150 per month for five years for keeping him “cheered and amused” while he was getting his second divorce.
A former employee – Naida L. Krasnova – was suing him for breach of promise. (Claiming he had promised to marry her.)
Time commented: “Perhaps Jesse L. Livermore will come back as he has done three times before. That was what his lawyers had in mind last week when they declared: ‘Mr. Livermore has made three very large fortunes. … He has failed three times, on each occasion [he] has paid 100 cents on the dollar with interest, and hopes to do so again.’ ”
Sadly, on this occasion, the lawyers’ optimism was misplaced.