How I made $200,000,000 in the Stock Market by Nicolas Darvas. - A Review of a Stock Market Classic

in #books4 years ago (edited)

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This book is easy reading and written from the perspective of a person who was not a Wall Street investor but a professional dancer and yet he was someone who learnt and improvised the hard way till he reaped enormous success.

While this book is over 60 years old, the principles of what Nicolas Darvas followed when it came to building his fortune, holds good even today. Here are some quick snippets

His first set of rules that he set for himself after his initial failure

  1. I should not follow advisory services. They are not infallible
  2. Brokers advice can be wrong.
  3. Ignore Wall Street sayings how noble and ancient they are.
  4. Do not trade Over the Counter stocks
  5. Do not listen to rumours
  6. Fundamental approach is better than gambling.

Nicolas also did a lot of analysis on his losses and based on this came up with further tuning of his strategy to pick stocks

Objectives for buying:

  1. Right stock
  2. Right timing
  3. Small losses
  4. Big profits

Tools to be used:

  1. Price and volume
  2. Box Theory
  3. Automatic buy order when the stock touched a specific price
  4. Trailing stop-loss

So without getting into further details, here are some quick takeaways for the reader:

  1. Don't get addicted to a stock and be emotionally detached from it.
  2. Using Trailing stop losses.
  3. Get into a stock when it is on the uptrend and moves outside the box on the upper end - the box in today's terms can thought of as resistance and support levels.
  4. In a bear market, it is wise to stay in cash because you will eventually get to buy good stocks at discounted rates when it's on the move again.
  5. Stay away from tips - most of the time you end up getting the tip only once it's been factored in.

Overall this is a great read - and without the overbearing jargon of wall street analysts, the book is something even novices can understand.

Overall Rating : 5/5


PS: This review has also been published by the author on https://www.goodreads.com

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did you ever mention to trade in the crypto market ?

The fundamentals of crypto are very different from stocks and therefore it's unlikely to be applicable in this context.

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