How Nicholas Darvas Made $2M In The Stock Market, A Book Review

Learn how Nicolas Darvas traded his way to 2M in the stock market while touring full time as a ballet darvas box rules.

Nicolas Darvas didn’t start out in the stock market like most other people. In fact, he didn’t start out in the stock market at all…

At 23 years old, Darvas began his career as a dancer, touring the world light on his feet. But when Darvas wasn’t dancing, he was reading. In fact, Darvas consumed over 200 books during his down time on tour. Some say he read up to eight hours a day. He studied markets, speculation and how those before him raked millions from the market.

Darvas then ventured into Wall Street, armed with 200+ books of knowledge in his head. What resulted was a rollercoaster of wins and losses. Triumphs and defeats. A near decade’s effort that culminated in over $2M profits in an 18-month span.

His journey from loser to winner reads like a movie with painful lessons, simple insights and dogmatic application to what worked. Luckily, the entire saga was documented in Nicolas Darvas’ book How I Made $2,000,000 In The Stock Market.

The 3 Most Important Lessons From Nicolas Darvas’ Book:

This book review will highlight three things:

1: Darvas’ early losses and lessons learned

2: The Darvas Box Theory: The Strategy That Made Darvas A Multi-Millionaire

3:Why You Should Distance Yourself From The Market

Darvas was mainly a swing trader. But the lessons in this book are useful for even the most long-term focused investor. As such, I use the words interchangeably.

Are you ready to learn how to make millions?

Darvas’ Early Days: The Antithesis Of A Good Trader:

Take a second and think about what makes a great trader … Got some ideas? Good. Darvas did the opposite of all those things.

He doesn’t hide it either. Within the first six pages of the book Darvas hints at two major issues with his early trading strategy:

1: Buying based on “hot tips”

2: Turning losing trades into “pet stocks”

Never Trust A Hot Tip:

Buying stocks off “hot tips” from friends, neighbors or FinTwit accounts is a bad idea. It’s also not a new idea. Darvas notes on page 5:

“I listened eagerly to what they had to say and religiously followed their tips. Whatever I was told to buy, I bought. It took me a long time to discover that this is one method that never works … All I knew was what the last head-waiter in the last nightclub I had performed in had told me was good.”

Tip-based investing never works because you can’t buy a person’s conviction in an idea. If you don’t do the work yourself you’ll never have the confidence to hold on when you’re right.

Even worse, if the stock goes down, who do you look to for confirmation? That friend.

Lesson: Do your own work. It’s okay to get a head start from a friend/someone you trust. But do your own work to develop your own conviction before buying.

The Last Word: A Life Changing Book:

Darvas’ book changed my life.

It made me realize it is possible to make life-altering profits in financial markets. Moreover, Darvas took readers on a journey through the highs and lows of speculation and trading. We witnessed his early losses. Celebrated his victorious improvements. And cringed when he almost lost it all at the end.

But the most important part of Darvas’ book is that his strategy works. It worked in the 1950s and it works today. The stocks change names and the participants come and go. But business fundamentals stay true. And basic human psychology doesn’t change.

I can’t wait to read this again.

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