How I Made 2,000,000 in the Stock Market

Rating:
Summary: It WORKS!!!
Review: 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 available today (which Darvas didn't have in his early days - further proof of his true genius was his ability to make "mental charts" without looking at physical ones - abstract thinking characteristic of a very high IQ) these stocks can be found if they exist. But more people DON'T grasp the system than do. This is especially clear in the remarkably funny Q&A section at the end of the book where you find that people are entirely missing his concepts and he is almost at a total loss to explain what seems so obvious to him.

This is not day trading. But neither is it long-term buy and hold. I think it hypocritical of Darvas to claim he was a long term investor - he was long term only as LONG as the stock stayed in its "box" or moved up into a new one. If it moved down, he was OUT OF THERE. That's NOT long term investing. It's smart investing. And Nicolas Darvas is my investing hero.

He made all the mistakes that all of us make, and you'll chuckle a lot as you watch him plod through all the mistakes you've already made or may be about to make. Then he hits on his system, makes a lot of money, gets very humanly egotistical and even arrogant about it, and almost loses it all as he gives in to overconfidence and the other very human emotions which are an investor's worst enemy. Finally he learns to separate emotion out and leave discipline in. It is the only way to make this system work.

Also, don't forget that this is a combination of technical AND fundamental investing ' stocks are located by technical signals, but are further analyzed fundamentally (if only to a minimal degree) before being considered as buy candidates.

This book reads like a highly entertaining novel ' it's hysterical when news of his success leaks out and TIME magazine sends three different sets of editors down to interview him and study his system before they finally decide he is for real and end up printing his story and putting him on the front cover. Which is what eventually lead to the demand for this must-have, must-read classic.

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

P.S. Buying this book with How To Make Money In Stocks by William J. O'Neil is a perfect combination, as O'Neil, the founder of Investor's Business Daily, helps clarify, and builds on, Darvas's techniques, although - shame, shame - he doesn't give him credit.

Rating:
Summary: SHORT AND SWEET
Review: I DON'T NEED TO GO ON AND ON ABOUT HOW GREAT THIS BOOK IS, BUT JUST ONE THING SUMS IT UP...I HAVE READ DOZENS OF STOCK MARKET BOOKS, BUT NONE AS GREAT AS THIS AND IT TOOK ME FROM LOSING IN THE MARKET TO WINNING...ITS THAT SIMPLE.

Rating:
Summary: Lessons from the market remain the same
Review: I had read this book over a decade ago the first time and I read it again over this holiday season. Nothing in the market has changed in the 40 years since the book was first released. The book was an easy read. I highly recommend it to anyome looking to learn about investing.

Rating:
Summary: LEARN BY EXAMPLE - DARVAS DID IT!
Review: I love this book! Forget theories! This guy did it--what better way is there to learn?

Being that I am a BIG fan of modeling (NLP) it makes sense for me to get so excited about such a book...but all excitement aside...I recommend this book to anyone who invests money in the market.

If you were to apply the principles outlined in this book and get great results I would not be surprised. I wish you much success!

Zev Saftlas, Author of Motivation That Works: How to Get Motivated and Stay Motivated

Rating:
Summary: a general idea how the market really works
Review: I read this book in two days leaving me more confident as an investor. What Darvas does it gives the reader a better understanding of the realities of how to achieve success with little risk and better profits. His story of success shows common sense prevails. Its an interesting and somewhat amusing read.

Rating:
Summary: Books to read again and again. Not complete agreement w/IBD
Review: 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.

Rating:
Summary: good read for investors from 8 to 80
Review: Thinking about getting the teens involved in finance? Then this is a great first book. I enjoyed it after 20 years in the market, and learned some good lessons. Should be on the shelf, and a must read for the investing family.

Rating:
Summary: Nothing to do with modern investing
Review: This book is a fairy tale that does not teach you anything about how the current financial markets operate and how to trade and invest money. Try Toby Crabel's book or articles which are hard to find, but presents the best approach to trading the current markets. He is a professional money manager and trader, while the author of this book is a jazz dancer.
Why not give your money to an actor from Hollywood for that matter?

Rating:
Summary: A system that made $2million in 18 months still works today
Review: This is a truly great book! I had been aware of the importance of having a trading system to "protect" you against the emotions of stock trading for a while now. 90% of people lose money in the market. Why? Because they try and predict stock prices and get emotionally involved. They also do not know how to read entry and exit signals.

Darvas was a dancer in the 1950's who invented a completely unique stock trading system - one which still stands tall today. His system automatically sold him out of bad markets but let his profits run with rising stocks. He gave up trying to predict the market and decided to actually follow the market and let it dictate when to make a move either way. This way of working changed the emphasis of his making large losses into his making of even larger gains ($2m in 18 months - probably $10m in today's money!). The book outlines the system he successfully used.

It is, however, difficult to tease the system from the text. Darvas writes well but you have to read the book several times understand all the nuances of his system. Even then, after four readings I had some questions. If you're serious about making money in the market or are fed up losing money, you really need to read this book. If you're not fed up of losing money, you must be mad!!!

Searching on the net for more information on how to construct Darvas Boxes (essential to his system) and screen for winning stocks led me to an updated version of Darvas' system. I highly recommend this system as an adjunct to the Darvas book. It elaborates on the principles outlined in this book and gives you all the tools you need to screen for the type of stock Darvas was interested in - on the Internet! Screens for stocks that have 200% increase in volume, are near their all-time high and have good earnings are all part of the package. Automatic plotting of Darvas boxes is also included.

I found after reading both the Darvas original book and the system [...]
my stock picking has now made me some money. Why not start right here and do the same?

Rating:
Summary: One of the Best Books Written on Stock Market Strategy
Review: 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.