Nicolas Darvas
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Nicolas Darvas was a world famous dancer, self-taught investor and well-known author.
[edit] Escape from Hungary
Hungarian by birth, Nicolas Darvas trained as an economist at the University of Budapest. Reluctant to remain in Hungary until either the Nazis or the Russians took over, he fled at the age of 23 with a forged exit visa and fifty pounds sterling to stave off hunger in Istanbul, Turkey. Sometime later, he met up with Julia (his half-sister) who became his partner in a dancing team that was to become one of the most successful acts in Europe and the United States[1].
[edit] Books Read Off Hours
During his off hours as a dancer, he had read some 200 books on the market and the great speculators, spent eight hours a day until saturated[2]. He began his studies by reading the following[3]:
- ABC of Investing, by R. C. Effinger.
- The Stock Market, by Dice & Eiteman.
- The Securities Market: And How It Works, by B. E. Schultz.
- Your Investments, by Leo Barnes.
- Profit In The Stock Market, by H. M. Gartley.
- Consistent Profits In The Stock Market, by Curtis Dahl.
- You Can Make Money In The Stock Market, by E. J. Mann.
His top 2 books which he had read almost every week were[4]:
- The Battle for Investment Survival, by Gerald M. Loeb. Published in 1935.
- Tape Reading and Market Tactics, by Humphrey Bancroft Neill. Published in 1931.
[edit] Darvas Profits
Darvas ploughed his money into a couple of stocks that that had been hitting their 52-week high. He was utterly surprised that the stocks continued to rise and subsequently sold them to make a rare profit.
Darvas decide to regroup to assess this remarkable occurrence. And it was here that Darvas came up with this approach and plan for trading stocks that was to see him achieve $2,450,000.00 fortune in just 18 months, during the 1957-58 bull market. In total, just 7 short years since his first trade. [5]
[edit] Stock Selection
His main source of stock selection was from the Barron's Magazine[6]. The magazine was usually a week old edition since he was traveling throughout the world performing his dance troupe. He would use cables and telegrams to send his buy and sell stop orders to his broker in New York. From now on Darvas would select a stock when it made a good advance on strong volume, with favourable fundamental company research.[7]
This method also showed Darvas insights into a stock's price behaviour, often revealing the signs of ‘inside buying’ before a company's release of favourable news to the public.
[edit] Time Magazine
At the age of 39, after accumulating his fortune and also being exposed in Time magazine[8] , Darvas was to document his actions in the book, How I Made 2,000,000 in the Stock Market. The book describes his unique "Box System", which he used to buy and sell stocks.
[edit] View of Wall Street
In the mid 1960's after his second book Wall Street: The Other Las Vegas was published, it put him at the top of the most hated list of every stock broker in the country[9]. As he explains, "Wall Street is nothing more than a huge gambling casino, bristling with dealers, croupiers and touts on one side and winners and suckers on the other. I had been a winner and was determined to stay one". [10].
He learned to ignore tips, financial stories, brokers' letters and never entered a broker's office.[11] During the 1960's, he left dancing and devoted himself to the world of finance.
[edit] Bear Markets and Selling Short
He stated, "I keep out in a bear market and leave such exceptional stocks to those who don't mind risking their money against the market trend."[12].
Darvas never sold short. As he states, "I have never done it myself because psychologically I am not cut out for short selling. But I think markets have now changed their character so much that all experienced investors should seriously consider it. It is not for the proverbial widows and orphans, though."[13]. He realized that his system could easily be adapted to short selling.
[edit] Success Formula
In his third book, he states "Later, I went on to explore and become successful in other fields, the fashion industry, theatrical producing, real estate are just a few". Here he claims "the formula for success remains essentially the same." In the book he illustrates, "the rules to be followed." [14]. "But one must know the correct route" [15].
[edit] Death
Nicolas Darvas died in 1977[16].
[edit] Complete books written by Darvas
- How I Made 2,000,000 in the Stock Market. Published in 1960 (hardcover) - PDF
- Wall Street: The Other Las Vegas. Published in 1964 (hardcover).
- The Anatomy of Success. Published in 1965 (hardcover).**
- The Darvas System for Over-The-Counter Profits. Published in 1971 (hardcover).**
- You Can Still Make It in the Market. Published in 1977 (hardcover).**
** Out of print.
[edit] Personalities of Wall Street
See List of personalities associated with Wall Street.
[edit] Also See
[edit] References
- ^ (1971) The Darvas System for Over-The-Counter Profits, back cover.
- ^ (May 25, 1959) Time magazine, p. 85.
- ^ (1960) How I Made 2,000,000 in the Stock Market, chapter 1.
- ^ (May 25, 1959) Time magazine, p. 84-85.
- ^ (1971) Wall Street: The Other Las Vegas, Chapter 1.
- ^ (May 25, 1959) Time magazine, p. 85.
- ^ (May 25, 1959) Time magazine, p. 85.
- ^ (May 25, 1959) Time magazine, p. 84-85.
- ^ (1971) The Darvas System for Over-The-Counter Profits, back cover.
- ^ (1971) Wall Street: The Other Las Vegas, p.12.
- ^ (May 25, 1959) Time magazine, p. 85.
- ^ (1977) You Can Still Make It in the Market, p. 126.
- ^ (1977) You Can Still Make It in the Market, p. 89.
- ^ (1965) The Anatomy of Success, p. xiv-xv.
- ^ (1965) The Anatomy of Success, p. xxvii.
- ^ (1978) You Can Still Make it in The Market(softcover), About the author.
[edit] Books Referencing Darvas
- Lessons from the Greatest Stock Traders of All Time, by John Boik (May 21, 2004)
- How Legendary Traders Made Millions, by John Boik (March 23, 2006)
- Mastering the Trade by John F. Carter (Dec 7, 2005)
- New York City Vaudeville (NY) (Images of America), by Anthony Slide (Jul 26, 2006)
- How to Make the Stock Market Make Money for You, by Ted Warren (Dec 1994)
- The Best: TradingMarkets.com Conversations With Top Traders, by Kevin N Marder (Sep 15, 2000)
- The Transformation of Wall Street: A History of the Securities and Exchange Commission and Modern Corporate Finance, by Joel Seligman (Jun 26, 2003)
- Protecting Your Wealth in Good Times and Bad, by Richard A. Ferri (April 18, 2003)
- Sixties Going on Seventies (Perspectives on the Sixties), by Nora Sayre (May 1996)
- The Astute Investor (Second Edition), by Eric L. Prentis (Mar 27, 2006)
- The Perfect Speculator, by Brad Koteshwar (Jun 30, 2005)
