How I Made Two Million in the

by Nicolas Darvas

Book Overview

2011 reprint of 1960 edition. Full facsimile of the original edition, not reproduced with Optical Recognition Software. Hungarian by birth, Nicolas Darvas trained as an economist at the University of... This description may be from another edition of this product.

• Format: Paperback
• Language: English
• ISBN: 0818403969
• ISBN13: 9780818403965
• Release Date: February 2001
• Publisher: Lyle Stuart
• Length: 197 Pages
• Weight: 0.58 lbs.
• Dimensions: 0.6" x 6.0" x 8.1"

Customer Reviews

Great read

Very relatable book even in todays time. I find many of his trials and errors are super comparable in today's world. Trading YOUR system is your edge. Many of his words on stop losses are there in every chapter because they are there to help you not break you. Comparing today the brokerage houses to (social media today), I know everyone wants others opinions but trading without the noise is when I find Im at my best. For a quick couple hour read this is worth every cent and will recommend to everyone. Right up there with reminiscences.

It WORKS!!!

How did a world-famous dancer with no knowledge of the stock market, or of finance in general, make 2 million dollars in the stock market in 18 months starting with only $10,000? Well, first, he used margin.Second, he was a genius! Lucky thing is, YOU don't have to be one to read this highly entertaining, readable book and use the techniques which Darvas intuited, pioneered and refined.This is the book that stopped me from being terrified of the stock market. The method it uses is so sound and so brilliant that it reduces the risk of loss to an almost negligible level. And despite what some say, it works even in a bear market; in fact, Darvas made most of his money in a period that was historically considered to be a "baby bear" market. The difference is that, during a bull market, Darvas-worthy stocks show up ten times a week. During a bear market, one of these stocks may take six or eight months to show up.Why do I say it works? I've tried it. The almost shameful secret here is that it's like being an Inside Trader without an inside trader's information. You can still cash in, though. Darvas's system catches stocks that are - in most cases inexplicably and with no accompanying news - suddenly experiencing heavy buying, driving them up powerfully to challenge and break through previous highs. And why are these stocks doing this? Nobody knows. Why does a pharmaceutical company in business 13 years which has never been able to bring a drug to market, never made a profit, and is predicting worse earnings to come suddenly have people buying it more and more each day, its price running up steadily and strong, with absolutely no news out of the company? Who CARES? In fact, one of Darvas?s rules was to read absolutely NONE OF THE NEWS about the stock! The Darvas system just spots the stock as it climbs. If it breaks through that previous high, you will buy it along with all these other people you don't know. And when the stock continues to climb...in three weeks, and THEN the company announces it has just released an FDA-approved drug which is the strongest anti-influenza drug to ever hit the market and already has a distribution deal with Johnson & Johnson, you might understand. You might understand that a LOT of people knew something. They just weren't telling. Luckily, you didn't have to be one of them, nor did you have to be to enjoy the further $10-in-one-day jump it experienced the day the news broke. And if you followed Darvas' trailing stop-loss requirement, you automatically sold when it fell back down.This happened to me, and I've done it DOZENS of more times, though the climbs weren?t always that dramatic. Usually, you never find out what caused the surge. You just profit from it. Darvas himself likened it to being a ?silent partner? with all those people in the know.One warning: you either understand what the system is by the way it's explained here, or you don't. To me it was as simple as pie, and with the Internet screening techniques

Books to read again and again. Not complete agreement w/IBD

I think this is an investing classic, for a few reasons:1. It's very readable.The author describes his investing style as a narrative. It takes you through his investing evolution step-by-step, detailing his actual experiences. This made it very easy to follow, and also more real.2. It emphasizes both technical and fundamental criteria.This is critical to good investing. Both areas tell a story. This is the best book I've seen that details an investors journey through to discover that both matter, and integrate the two pictures.3. It makes for a better system, in some ways, than Investor's Business Daily.I noticed other reviews that noted the similarity between IBD and Darvas. While they are similar styles, there are some key differences. First, Darvas looks for companies that have a good high-growth STORY, but does not necessarily require the company to have high-growth earnings. He doesn't look at ROI, earnings growth rate, etc. (at least not in this book)The potential advantage of this approach over IBD is that sometimes stock prices reflect earnings potential BEFORE actual earnings show up. Alternatively, sometimes stock prices reflect perceived earnings declines BEFORE the actual decline in earnings.4. His system makes sense from a technical standpoint, but is actually harder to do than you might think.I like his system because it's technically sound. For example, it emphasizes taking small losses and being patient for large gains (among many other things).Don't be fooled, however . . . it's trickier to follow that you think. Not because his system doesn't work, but because it requires a lot more discipline that you might imagine. In his main year of gains, he records investing in only a few stocks. Also, he waits for a bull market. How many of us are really patient enough to do these two things. In reality, not many. It's just very difficult in practice.Also, he keeps an investing journal, something which I still struggle to do, but which is essential for growth. Most people can't do this on a daily basis.In all, it's a great book for the average investor to read and reread. I highly recommend it.

Almost a How To Book

This book is recommended by William J. O'Neil and other authors of Investor's Business Daily...I thoroughly enjoyed Darvas' explanation of how he went through the process of learning to invest. Many features of his strategy are embodied in the method popularized by O'Neil in How To Make Money In Stocks. Darvas' gives the investor a way to decided when to buy or sell stocks without getting bogged down in a bunch of technical indicators. The old adage of "buy low, sell high" is greatly misused and misunderstood. The danger of following this idea is buying a stock when the company founders because the stock's price is low, usually having dropped 20-80% and having a low PE. Darvas didn't follow this strategy. He always checked out the financial strength of a company then waited for the stock price to move from a lower "box" (as defined by Darvas) to a higher box. This is similar to O'Neil's strategy of buying when a stock hits a new high, shucking weak investors. Darvas would hold a stock as long as it remained in the box or moved into a higher one. When the stock price faltered and began descending into the next lower box, he sold out.One very special feature of Darvas' book that makes it so valuable is the recapitulation of each stock he bought on his way to making $2 million (and investor today would have to make at least 10 times as much to match Darvas). He shows his wins and losses and what he did to improve his technique.Successfuly investing is not based on the nearly mindless, lazy approach of "buy and hold." One could have bought a Dow Blue Chip darling of Bethlehem Steel near its peak of $23 3/8 in Jan '94 and held it until today at $4, or worse bought it in 1983 near $30 and watched it meander down and up with lower lows and lower highs to the present. Clearly, buy and hold is not a good strategy unless one constantly reviews the fundamentals of the company.Darvas' strategy is clearly a winning method that kept him in strong performing stocks and got him out of losers that other people hung onto for years, e.g., Coca Cola.

One of the Best Books Written on Stock Market Strategy

This is probably my favorite book on maneuvering in the stock market. If you read William O'neill's "How to make Money in Stocks", which is also excellent, you will find he uses and expands upon many of Darvas' principles. O'neill also lists it as one of his top ten must reads on the stock market. Darvas' rules for cutting losses have helped me to limit my losses from 2 to 5 percent on average. I have avoided some serious losses from time to time(some up to 75 percent) by using Darvas' principles and cutting my losses quickly and have avoided avery market downturn in the last two years. While everyone was in distress about the '98 bear market, I was comfortably on the sidelines with my funds in cash thanks to this wonderful book. If more stars were available to rate this book, I surely would have given them. By the way, they're out of print, but if you can get Darvas' other books, "Wall Street-The Other Las Vegas" and "You Can Still Make it the Market", these are other followups that are just as good as "How I Made $2,000,000" and will really drive the points of his methods home.