How I Made $2,000,000 in the Stock Market
How I Made $2,000,000 in the Stock Market
Annotation: 2009 reprint of 1960 edition. 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 Soviets 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. During his off hours as a dancer, he read some 200 books on the market and the great speculators, spending as much as eight hours a day studying.Darvas ploughed his money into a couple of stocks 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 large profit. His main source of stock selection was Barron’s Magazine. At the age of 39, after accumulating his fortune, Darvas documented his techniques 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. Darvas’ book remains a classic stock market text to this day.
User Ratings and Reviews
3 Stars Disappointing book but interesting read
For those looking to find out the exact methods Nicolas Darvas used to obtain his $2 million, you will be disappointed. The title is what it is and a little misleading. The “How” part is more a play on words on what stock issues he traded and more of the faith he had in himself to hold onto his stocks. Basically Darvas looked for volume spikes and then sought strong fundamentals in stocks. His approach wasn’t revolutionary other than trading ranges and buying breakouts.
It is an entertaining read no doubt but will leave experienced traders asking for more.
5 Stars Real world trading experience
For anyone genuinely interested in trading stock market this is a must read. Not because the author happened to make a lot of money in a short time, but because it gives real insight into what it takes to trade successfully in a very difficult environment that most fail at. It is a short read but manages to encapsulate the key aspects of technical analysis, trading psychology, devising and sticking rigidly to a trading plan and risk management. It shows the pitfalls by real experience of ignoring or mismanaging any of these aspects.
5 Stars An amazing story…
…into how someone with no stock trading experience was able to develop a trading system and make it big. The pre-curser to breakout trading.
A great book!
If Nicolas Darvas can do it, so can you!!
5 Stars Great first book to read if your interested in technical analysis
I’m a part time trader who utilizes mainly technical analysis to trade momentum stocks in a 1 week to 2 month time frame. This was one of the first books that got me interested in using technical analysis. I have recommended this book for all my friends interested in trading.
This book is a good primer for anyone interested in learning more about technical analysis.This book is not going to give you great fundamentals or teach you about technical analysis but gives you a good story on how Darvas improved his trading and made a tremendous amount of money.
4 Stars Very entertaining, but don’t try this at home!
“Box theories” and techno-fundamentalism aside, this book is an enjoyable ride through the swinging 1950s and 60s. Even if Darvas was successful, one has to imagine luck played some role. (He admittedly lost plenty before hitting it big with just a few choice picks.) In any case, some variables have changed (trading regulations) and others were always going to be risky (using margin heavily). On the other hand, getting up-to-date stock information nowadays would be A LOT easier, though surely Investor’s Business Daily would be favored over Barron’s.
None of this minimizes the readability of the book. Following Darvas as he dances around the world, reading his cryptic telegrams voyeuristically, wondering if many of the companies in which he invested are even still in business, all makes for a great read. And there *are* nuggets of wisdom (”Whenever a trade was successful I praised myself; when I lost, I blamed it on the broker”). But there is also a lot of ego and plenty of grey area (”I could ‘feel’ my stocks…It was a marvelous, unexplainable instinct”).
All in all, one of the most fun investing books I have seen. In terms of rating this book, I think it depends on your expectations:
Expect an entertaining biography (and a fast read, at that) and you will be pleased.
Expect the secret to unlocking millions of dollars in stock market profits and you will be disappointed.
NOTE: The current edition for sale here is a reprint, through Martino Fine Books, who I have never heard of. Maybe best to just pick up a used copy.
Filed under: Personal Finance Book Reviews