just reread the book yesterday...here's changes (darvas, 1977) vs older darvas: -> takes 52 wk high after a 'brutal bear market' rather than all time high. -> does NOT enter the 1st breakout; waits for minor pullback, and THEN enters. -> does not always enter if it feels wrong (i'm guessing the volume wasn't as strong as he wanted, but he doesn't say).
There is another criteria he uses (I don't remember which book it is ) - The stock should have at least doubled from its 52 week low.
I have the other las vegas but never heard of you can still make it in the markets....thanks Easyguru... It's out of print but there are used copies at amazon ...Might pick it up in the future.... Nick
http://www.siliconinvestor.com/stocktalk/subject.gsp?subjectid=24248 462 messages on darvas on silicon investor, inactive thread now but plenty of darvas information.
if you're patient enough, and manage your money well enough, and diversify enough, and live long enough, Darvas and Donchian and any other trend following approach that bounds loses but doesn't bound gains will eventually work.
Time magazine May 1959 p84-85 Business Pas de Dough The lights go low at Manhattan's garish Latin Quarter nightclub. Onto the stage glides a slim hipped, broad shouldered man in white tie and tails. He grasps his partner, a stunning redhead in black tights, whirls her over his head on one arm, hurls her dramatically in a split-legged fall to the floor. The dance team is Nicholas Darvas and his half sister, Julia, one of the top acts in the U.S. What the tired businessmen watching the show do not realize is that Hungarian-born Nicholas Darvas, 39, is a better moneyman than most of them; he is a top stock-market speculator who has has parlayed his considerable weekly income ($3,500 currently) into a fortune of more than $2,000,000. Moneyman Darvas' methods would raise the eyebrows of most Wall Streeters. Instead of studying the fundamentals -price earnings ratios and dividends-he judges public enthusiasm, a method that works best in volatile markets. "In my dancing I know how to judge an audience," he says "It is instinctive. the same way with the stock market. You have to find out what the public wants and go along with it. You can't fight the tape, or the public. Mental Charts. Darvas' system is tailored to his job. Since he has to do trading from wherever he is dancing (he recently completed an Asian tour) he ignores tips, financial stories and brokers' letters, has never been in a brokers office. Basically, his approach is that of a chartist; he watches price and volume. But the only charts he keeps are in his head. He studies the weekly stock tables in Barron's, receives a nightly wire from his broker giving the high, low and closing of stocks he is following, as well as the Dow-Jones averages. When a stock makes a good advance on strong volume, he begins watching it, buys when he feels that informed buyers are getting in. For example, when he was playing in Calcutta, he noticed E.L. Bruce moving up in the stock tables. Suddenly, on 35,000 shares it moved from 16 to 50. He bought in at 51, though he knew nothing about the company, and "I didn't care what they made." (they make hardwood flooring.) He sold out at 171 six weeks later. Darvas places his buy orders for levels that he considers breakout points on the upside. At the same time, he places a stop-loss sell order just below his buy order, so that if the stock does not move straight up after he buys, he will be sold out and his loss cut. "I have no ego in the stock market." he says. "If I make a mistake I admit it immediately and get out fast." Darvas thinks his system is the height of conservatism. Says he; " If you could play roulette with the assurance that whenever you bet $100 you could get out for $98 if you lost your bet, wouldn't you call that good odds?" If he has a big profit in a stock, he puts the stop loss order just below the level at which a sliding stock should meet support. He bought universal controls at 18, sold it at 83 on the way down after it had hit 102. "I never bought a stock at the low or sold one at the high in my life," says Darvas. "I am satisfied to be along for most of the ride." Limiting his selections to five or six stocks at a time, Darvas often studies one for weeks or months before buying. He steers away from blue chips, buys only growing companies. "I am only in infant industries where earnings could double or treble," he says. "The biggest factor in stock prices is the lure of future earnings. The dream of the future is what excites people, not the reality." Eight Hours A Day. Darvas studied economics at the University of Budapest, fled Hungary for Turkey in World War II (he still holds Turkish citizenship), methodically trained eight hours a day to become a dancer. He came to the U.S. in 1951, got interested in the market in 1952 when a Toronto nightclub owner paid him off in a mining stock that promptly trebled. (He sold it at that point; it later collapsed.) Darvas trained for the market just as methodically as he had studied his dancing, read some 200 books on the market and the great speculators, spent eight hours a day until saturated. two of the books he rereads almost every week; Humphrey Neill's Tape Reading and Market Tactics and G.M.Loeb's The Battle for Investment Survival . He still spends about two hours a day on his stock tables. Even though he has made a fortune he plans to keep on dancing. Dancing is his business; the stock market is just that second income.
Well guys you are missing something essential. Darvas was VERY selective in choosing of his stocks. And i suspect that he did not mention all of his losers, probably cuz his publishers told him to write more about the winners, so they sell more books. He was buying breakouts- you think this is simple? Well in the HUGE bull from 1995- 1999 a lotta people had been shorting like crazy, which probably made the bull that big. But he was not buying EVERY breakout. One should read all his books. Just read his second one..In his third one, he describes his BOX system in detail. He also describes the way he looks in the newspaper.His third and last book is called " You ca nstill make it in the market" ,published by Playboy Press in 1977.. Actually i read somewhere that 1977 was the year of his death (. I have the last book scanned. I liked it very much )). Well, if one is looking for a black box fully automated system that grows $$$, he should not read this book/ which is quite expensive @ amazon btw/. But if one likes to THINK INDEPENDENTLY, go buy this book or pm me if interested. I also think he was lucky. 2 years after late 1959 when he had 2.25 mln, his account was 2.45 mln.. A growth of only 200k (. And he was plain lucky in one of his trades that made almost 850000 with maximum leverage..It could have turned to be a BIg loser.. So money management was not something he cared )). Bye!
I have the Humphrey Neill book. I have to say, pretty interesting stuff for a book written over half a century ago. You would never know it. My how the market has never changed.