Everyone talks about how Darvas made over $2 million in the 1950s, but wasn’t the highest tax bracket 90% in the 1950s? How much of the money did he actually get to KEEP versus pay in taxes?
Nicolas Darvas rode the trend as long as it lasted so, in most cases, he held onto his stocks as long as it took so, he would have paid at the long term capital gains rates. He was minimizing his taxes on his gains from the stockmarket although, I doubt that was his intent. It was just incidental that it happened that way! He wrote in his book that avoiding capital gains just for the heck of it was stupid. There was an investor who did not sell his stock and lost his huge gains! He wanted to avoid the capital gains taxes. Stop losses took him out of his trades. Since, he had huge gains, he could offset all his losses!
Off topic.... Darvas combined FA with TA... analyzing a company fundamentally, but managing his trade technically. Yet another example of "TA works". If one is not familiar with Darvas' methods, you might want to look it up. Some software will actually draw "Darvas Boxes" for you. http://www.darvastraderpro.com/nicolas-darvas-system.htm Personally, I think one could just trade the boxes and forget the rest. After all, the price charts shows what players are actually doing with their money. That's what counts the most. KISS. FWIW...