When the Greatest Stock Speculator Met the Greatest Gambler
The story of Jesse Livermore's conversation with Edward Bradley.
Born in 1859, Edward Bradley was a fascinating individual. He had been a steel mill roller at fourteen, then a cowboy, a gold miner, a scout, and even a friend of Wyatt Earp. He also raised racehorses and ultimately won the Kentucky Derby four times. But he was mostly known as the most successful gambler in America.
In 1898, Edward Bradley opened Bradley’s Beach Club. It was a private dining and gambling club in Palm Beach, Florida. It was wildly successful.
Gambling was illegal in Florida, but Bradley structured the operation as a private club, and town authorities looked the other way. The house edge wasn't just mathematical. It was structural. Bradley controlled who walked through his door long before he ever spun a wheel.
This Florida based private Club had a few rules. You had to live outside Florida. Why? He didn’t want locals losing money. It would draw scrutiny. Rich snowbirds only. You had to wear evening dress. No press. No locals. No photographs of the interior, ever.
The turning point came when he decided to let women gamble. The venture went from prosperous to legendary. Historians would later call the Beach Club "America's Monte Carlo." It ran from 1898 to 1945, nearly fifty years of illegal gambling in plain sight.
The richest in America were members of the beach club.
Vanderbilts, Goulds, Belmonts, Astors, Whitneys, Wideners all carried membership cards and sat at the roulette wheel between tea dances and wheelchair rides down Royal Poinciana Way. Joseph P. Kennedy, father of a future president, was a regular after buying his Palm Beach home in 1933. William K. Vanderbilt II lost $850,000 ($15 million in today’s dollars) in a single sitting at chemin de fer and laughed about it. Automotive magnate John Studebaker dropped $200,000 at roulette in one night.
Jesse Livermore, the greatest speculator ever, was also a notable member. During the 1920’s and 1930’s, Livermore visited the Club every winter and he and Bradley became good friends. Bradley had ticker tapes set up in every major room in the club for Livermore.
In, Jesse Livermore – World’s Greatest Stock Trader, author Richard Smitten retells this wonderful exchange between the speculator Jesse Livermore and the gambler Ed Bradley:
One evening at Bradley’s Beach Club in Palm Beach, Jesse Livermore was sitting with Ed Bradley for dinner, just the two of them. After dessert Bradley asked him, “J.L., what makes a good stock speculator?”
“Ed, that’s a funny question. What makes a good gambler? Maybe similar traits?”
“I think maybe they’re a little different, J.L.”
“Well, for a stock speculator it’s an aptitude for the game, a stomach for the ride, and the ability to see what is happening without emotion. The ability to make observations that others don’t and a good memory to remember facts correctly, particularly mathematical facts.
“Finally, Ed, and most important, is experience. To learn from your experiences is paramount. And you need them all. A speculator could have good powers of observation and memory, but not the experience. Or a trader could have experience, but poor memory or poor observational ability, or no mathematical aptitude. A successful trader needs all these characteristics, but the key one, the essential one for sustained success—I believe is experience.”
“And the stomach for it,” Bradley added.
“Yes, it’s not everybody’s calling. Not everybody could or should be a speculator.”
“Or a gambler, like me. But can you be a little more specific J.L.?”
“I’ll make it quick. Only speculate if you can make it a full-time job. Don’t take tips of any kind, no matter where they come from. Don’t worry about catching the tops or bottoms, that’s fool’s play. Keep the number of stocks you own to a controllable number. It’s hard to herd cats, and it’s hard to track a lot of securities. Take your losses quickly and don’t brood about them. Try to learn from them, but mistakes are as inevitable as death. And only make a big move, a real big plunge, when the majority of factors are in your favor.”
“Kinda like holding a royal flush?” Ed Bradley smiled.
“In the market you very rarely get a sure thing. The market always keeps you on the edge.”
“Gambling too, J.L.”
“That’s why every once in a while, you must go into cash, take a break, take a vacation. Don’t try to play the market all the time. It can’t be done, too tough on the emotions. And finally, and I know you’ll like this one Ed, keep some cash in reserve. Like you, Ed, you probably have a hundred grand on you right now.”
“Eighty.” Bradley smiled.
“I have made some of my biggest moves and biggest profits because I had some cash sitting in reserve.” Livermore smiled back. “Now it’s your turn Ed. What makes a good gambler?”
“Pretty much what you just said, J.L.”
“There must be something else.”
“Well, J.L., you know I’m a good Catholic and I never discuss religion, but the fear and love of God was put in me by my mother from when I could talk till I was about twelve or thirteen and I hit the road. So a good gambler always wants God on his side. Second, you live in a nice gentlemanly world up there on Wall Street. At least no one is beating you up or trying to shoot you, which, sad to say, often happens in the life of a gambler. I believe a man must know the manly art of self-defense, not to be a bully but so he doesn’t ever have to have any fear of another person.”
“The men on Wall Street do all their maiming and killing mentally and financially,” Livermore added.
“Yeah and through lying, stealing and cheating, which I will not abide.” Bradley sipped his drink and continued, “Finally, like the market, you gotta do and love the math. So while others are talking, and talking, and talking, like they always do, you can be thinking and thinking and thinking, figuring the percentages and the probabilities. This will ensure a fella of financial success—like you, J.L.”
“Ed, flattery will get you everywhere with me.” Livermore raised his old-fashioned and Bradley raised his glass of soda water. They smiled and clinked glasses, the Great Bear of Wall Street and America’s most successful gambler.
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