How I Made $2,000,000 In The Stock Market

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? Darvas is legendary, and with good reason. Find out why.

Reviews:

One of the biggest take away one can take from this book is that stocksin a strong group goes up together or goes down together. A very recent example and one repeated so many times is that in aug 2007 when shipping stocks were going up Dry bulk shipping, excel meritime, diana made good gains, when they went south in Dec 2007 they all tanked together. Another example is the solar stocks in 2007 a very strong group considering the energy other group was performing the best and FSLR, STP, and many other solar companies made the strongest gain. FSLR went up by 710% since its IPO in 2006. We may see similar ones in future one of them may be the Visa IPO (ticker symbol V) will it repeat the same feet as master card, well time will tell but I am positive on it.

An amusing little read - - but buy O'Neil's book on how to make money in the stock market if you really want to get into the detail.

When I first looked at the title, my thought was "Yeah right..." I started reading nonetheless, and read the book in one sitting. It was a page-turner, if that's possible with a book about investing. The book is concisely written, entertaining, and inspirational. One of the lessons in this book I immediately applied to my trading was to eliminate "noise". So bye bye to CNBC and TV/Internet gossipping of markets and stocks. It seems to work so far.I recommend reading this book and William O'Neil's book "How to Make Money in Stock Market".

I made the mistake of buying this book. It is outdated (telegrams) and the examples or actual buying and selling do not and cannot match today's market requirements. The writing is awful and the ideas presented are unrealistic. A book from 1952 cannot be used as a guide for making money in today's market. There are some classic books (Graham) that will remain fundamental, but this one is not such a book. Save your money and this book goes in the trash.

I found this book very informing. I am using some of the approaches to filter stocks for our large subsciber base. But using marketspath expertise in market timing to enter and exit trades. www.marketspath.com

To become a great stock investor, I believe one must incorporate both fundamental and technical approach when picking a company to invest in. I came to this belief after reading this book. Mr. Darvas's failures in reaping profit in the stock market when employing only the fundamental or technical approach is clearly evident in the book. He later realizes the importance of both approaches and uses both to make $2 million dollars. He terms it "techno-fundamentalist method." He also used volume(trade) and price to find the potential stock. He would ask for the price of a stock from a broker when there was a sudden significant increase in the volume(trade) or price of a stock. A sudden increase in the volume(trade)implies that many investors are dumping and trading their stocks which Darvas saw as a key to exponential price increase. Seeing this as an advantage, he jumps in and buys the stock after couple days of price increase. A smart move, as he made a huge profit. Another useful approach he used to make profit in the stock market was his "Box-Theory." He employed this approach primarily to control his fear of losing alot of money in the stock market. A clever idea as it turned out to be. There are more information you can find from this book so read it or regret it!!

This was an easy and interesting read. Darvas' story clearly shows the validity of technical analysis. I found it a fascinating story because it was done by a layman, and not by a professional trader. It gave me some good ideas and the confidence that I can make it as a trader as well.

It is clear to me that many reviewers just don't understand how valuable this book can be to some readers. I read the fifth printing of the original book in 1961. It introduced me to many good, simple trading techniques that are still valid four and a half decades later. Of course, new on-line brokers and data services have gone far beyond what Darvas had to work with. However, all the bells and whistles of the internet that people can get hooked on, and I certainly am, can make one lose sight of the simple basics.Darvas introduces buying strong stocks on the way up and then setting stop losses, although maybe tighter than I do. He introduces box trading that some traders might look at as "just" breakouts from support and supply areas. It is similar to what I now think of as cluster analysis in my trading. He introduces the importance of volume and volume breakouts and how confusing it can be when letting profits ride.After I recently saw that some seminar guru recommended it as an important stock market book, I reread for maybe the fourth time and I agree that important is the correct assessment. It was also still an enjoyable read. This reading gave me a slightly different perspective of my cluster analysis and it really hit me how valuable it is to not have to depend on a "live" broker as well as the high commissions of my earlier days.For someone who understands all of these basics and doesn't want the benefit of a review or different view, I guess maybe the book is not all that important. But why would they want to downgrade a five star book and mislead people who are seriously interested in learning from it? For an experienced investor, the book should just be an enjoyable one night read about a different era that still has meaning today.For someone who is reading it because they want to gain the knowledge, it is a classic. I recommend it highly even after four and a half decades. It is a great read that you can always get something from. Just seeing how Darvas had to reinvent himself several times as an investor is valuable, I certainly had to do it several times.

From reading the cover, this book sounds like the very key to winning a fortune in the financial markets. The Holy Grail maybe? I would not count on that. Let's look at two of the book's principal tactics:1. Very tight stops (a fraction of a point)Mr. Darvas acknowledges that his method will stop you out very frequently. In fact, a reader sends in a comment (back of the book) that this tactic will stop you out more than 90% of the time. The reader calls it "useless" 2. Stocks must be trading at an all-time high and be growth stocks that have suddenly made an "unusual" move. Mr. Darvas acknowledges that this eliminates more than 90% of all stocks as trading candidates. Let's look at how Nicolas Darvas turned $36,000 into $2,000,000: Jones & Laughlin: Bet the farm on this stock, plus used full margin. After two weeks sold out at a loss of 25% of his account. It took Darvas TWO YEARS to recoup his 25% loss. Not good.E.L. Bruce: Bet the farm on this stock, plus full margin. This stock rose 250% in a couple of months. $300K profitUniversal Products: Bet half of his account on this one, plus full margin. Held for a few months. Stock rose 300%. $400k profit Thiokol Chemical: Bet half of his account on this stock, plus full margin. Held for a few months. Stock rose 300%. $900K profit.As you can see, Nicolas Darvas was betting the farm on his trades and using margin to the fullest. The VAST MAJORITY of his $2 million profit came from just the above three winning trades. But he made hundreds of trades during this time. There is surely an element of luck here...Darvas had read up on the stock market extensively and had years of experience by the time he hit his three big winners. He was not trading on ignorance at this point. The market was at the tail end of a bear market when he figured out that the volatile growth stocks are bound to rocket early in the recovery. He acted on this.Does the Darvas method sound like the answer to making a speculating fortune? Well, at least it sounds simple enough. Pick stocks that are gonna rise 300% in just a few months and then shoot the works. That's all! You'll either make a killing or be killed.

If you want to be motivated or if the market is down and discouraging you. This book will inspire you to get back in the world of trading and teach you basic trading techniques that are still applicable today.

If your buying this book to learn how to buy stocks save your money. Nicolas Darvas isn't all that clear on his strategy and there are better books out there on the subject. On the other hand its a nice quick read if you like to read true success stories.

This book is boring- repeating the same experiences that didn't work with all the details on every one. What's good about it (there is some) is of limited value in today's marketplace, and you have to sort it out of all the filler. Overall, if you are trying to learn how to invest wisely- it provides more confusion that it clears up, and thus is a waste of time. I've been managing my own investments for 7 years, and typically make about 20% annual. Neither novice nor expert, I read to learn more.. but like stocks- some books sound a lot better than they are. I can't see this book as being of much value at any experience level.

Nicolas Darvas wrote a very entertaining book. Maybe the fact that I'm half Hungarian added to the vicarious enjoyment. His early misadventures touched a raw nerve. His remarks about the high cost of trading in the bad old days reminded me of why I switched to an online broker. While reading the book I broke out in laughter several times.I was so intrigued by the box model that I created a computer model to test it. The results were a disappointment. While I didn't test it with too many stocks, I ran the tests with growers like BLWD, AAPL, and CMG. Darvas stated that he invested in growth stocks even if he didn't call them that and I tried to mimic his style as closely as possible. To give an example, over a period of 18 month from Jan 2006 to June 2007, the model traded BWLD five times, two winners and three losers for a net gain of 11% over 18 months. Improving the stops might have increased the yield to around 16%. That's nothing to write home about. During that same period of time the Dow 30 advanced 16% (annualized percentages).Some seven years ago I played around with another computer model based on crossing the various DMA lines. The stocks I used were the tech darlings of the bubble era. I used real price data from the '90s. The model made Warren Buffet look like a rank amateur, it was producing yields well in excess of 50% and it generated a very concentrated portfolio even when I fed it data for over 100 stocks. When I tested the same model in a bear market scenario it came out even, losing the trade commissions. Why the long story? Because I'm trying to put Darvas' achievement in perspective. From Jan 1957 to Dec 1958 the Dow 30 yielded 24% annualized, about three times its long term average. Darvas used an enormous amount of leverage or margin, more than most of us can obtain today and certainly much more than I would ever be willing to risk. Darvas must have had very good income from his dancing to dare risk that much. He did keep is income and his investing funds separate. Darvas was also very astute in his stock picking. The Soviets launched Sputnik on October 4, 1957 and America was feverishly trying to catch up. Kennedy was a good speechmaker. I believe that an extraordinary number of favorable circumstances came together in a very fortuitous way to enable Darvas to achieve his feat. From $25K to $2.25M in two years is an annualized return of 843%. As they say on TV, "Don't try this at home." :)

Lots of folks seem to cast doubt on this guy, I don't care. It's a good read and the concept is sound.

The strategy used by Mr Darvas is rather simple but elegant. There are a few lessons here for the modern investor:1) You should have complete conviction with your strategy or you will fail, in Mr. Darvas's case failure comes in the form of stop-loss order (and so should yours). 2) Stay away from the talking heads of CNBC, they will distract and destruct you (except for Cramer of course, he so crazy!). Mr Darvas stayed away from any form of outside influence, except for Barron's. He operated in the dark, no information on the fundamentals of the company, not much on the prospects of the firm (expect for the futuristic industries part), everything except his strategies. Today, you have to at least, understand the present state of the company and its future prospects. 3) He has a remarkable habit of writing down everything, documenting every trade in great detail; the reason for getting in, the reason for getting out, the prices, profits, losses etc. He was becoming a better trader, avoiding his previous mistakes and enhancing strategies that worked. 4) The author operated during a brief period in the 50's bull market, these conditions are highly unlikely to be repeated again (except for a brief period in late 90's when most of amateur traders lost their shirts), most of the strategies have either been either CANSLIMed or Hedge funded out.5) Mr Darvas wears his emotion on his sleeve, the elation and joy of his early victories, the arrogance and ego after his initial success, and his agonizing decision not to sell his rising stocks. You have to have your emotions and ego in check or get out of the game.6) Mr. Darvas did what none of us has the guts to do, he bet all his money, about a million dollars, in just two stocks. None of has the guts to do this today (except for a few people, maybe perhaps with other people's money). We are happy to read this book and buy the next "hot" Index fund or ETF.There is one more thing that is left unsaid. What did Mr Darvas do with his two million, did he retire? If I were him, I would have done just that, and started a new business. The pain that he displays walking through the streets of Paris is enough to dissuade anyone from following his path. It's just too darn stressful.

Read this book if you are serious about speculating in the markets. It took me 10 years what this book will teach you in 2 hours.

Just one of many ways you can make money in the stock market. Not a great story but an interesting read.

This is the best book I have read on trading. I read the whole thing in one day. Darvas's story is facinating. He slowly became successful at trading while persuing a profession traveling the world as a ballroom dancer. I love the fact that while he was isolated from the market, traveling around the world he could trade successfully via telegrams. Once Darvas got back to New York he set up an office in a brokerage to get "serious". What he found was, he was affected by all the market "noise" (daily market fluctuations, peoples opinions in the office, etc.) and immediately started losing money.Luckily he was smart and intentionally isolated himself from the market "noise" again, and began making money again. $2,000,000.Also, I highly recommend William O'Neil's "How to Make Money In Stocks".

Great.....................This book is the fundemental process of understanding a very sound proven way to make money in the stock market.A must read for all traders.

Nicolas Darvas's "How I Made $2,000,000 in the Stock Market" is a short, easily readable, and interesting story of how a dancer turned $10,000 into $2,000,000 in less than two years. The book does not serve as a "how-to" and is a bit dated, but it is an interesting read and does have many underlying principles that still apply for today's traders.Darvas was a world-famous dancer who took some of his savings and got lucky on his first stock investment. That led him to continue to invest - and usually lose - money until slowly he worked out a personal stock system based on both technical and fundamental analysis. Darvas made much of his money while on a world tour using telegrams to communicate with his brokers and track his stocks.Darvas's system is dated, but many of its principles were used by William O'Neill to develop CANSLIM trading. Darvas would buy growth stocks with solid fundamentals that showed strength and rose above resistance levels (he called them "boxes"). Darvas would always protect his trades with stop-losses and when never hold onto a losing position. This is an interesting book and a short read, and many of Darvas' underlying principles (if not the execution of his system) are still useful in today's trading world.

It's a bit hard to do this as it has not arrived as yet.

If your looking for an autobiography of someones life then this is the book for you. But if your buying the book to learn the darvas system of the stock market then this is not the book for you. I gave this book a 1 star rating because the book jacket said that the book contained information about nicolas darvas' system for profiting in the market. But nowhere in this book does he give you any information about it or how to use it. It sounds like all he did was buy a stock that was in a strong uptrend and then bought it when it passed the resistance level. Nicholas also gained most of his money when he bought a cheap stock on a wim for maybe 5 or 10 dollars and it shot up in price overnight and was restricted for anymore trading. He ended up selling for 171 dollars a share and sold for a profit of 250,000. His idea of buying resistance is nothing new and it sounds like he was lucky more than anything else.

This book laid the foundation for the type of investing I do today. Although, this is not the 1960's and today's market is in many ways different than the market in Nicholas Darvas' days, the underlying principles he teaches has influenced many great traders. I love the book so much I have sent hundreds of these books to buyers of my momentum trading course-that's how much I think about it.Paul E. LemalAuthor-"The Surfer's Guide to Stock Investing"bottomspringers.com

The Darvas trading technique was designed as a simple method for identifying the strength of a trend. Buy signals are created on new bullish strength and managed by a volatility range with a stop loss. This approach is built around long term trend trading and is most suited for trending stocks. All in all, the book is an easy and fun read and highly recommended for beginners and experienced traders alike!

I read the 1960 version 40 years ago and just found the paperback. This is the only person I have read who has stop-loss plan. Great book for an individual investor.