This week the book I read during my commute was How I Made $2,000,000 In The Stock Market, by Nicolas Darvas. It’s a trading textÂ I’ve been aware of some time, primarily through the discussions of and recommendations by others, but I’d never gotten around to reading it myself. After Christmas I took advantage of some gift cards and discount sales to pick up a copy so I could give it a read and provide a review.
First, be aware that this book – at least in the version I have – is quite short. It’s only a bit over 100 pages, and a healthy portion of that is editorial addition tagged on to help further explain the author’s story, along with some Q&A with Darvas tossed in. You should easily be able to get through it in one sitting.
Second, this book – again, at least the edition I have read – was very poorly copy edited. There are formatting issues all over the place. It’s not necessarily the easiest book in the world to read to start with, as the author’s narrative leaves something to be desired. The formatting issues, don’t help make for a particularly enjoyable reading experience.
Thirdly, you will note that I have used “story” and “narrative” in describing the text. That’s exactly what it is. Nicolas Darvas was a professional dancer who performed all around the world. The book describes how he somewhat randomly got into the stock market, and then the progression he made to building a $2 million portfolio for himself. All of it takes place during the 1950s, so be prepared for the author to talk about cables and things that modern readers will have little to no point of reference on.
At it’s core, How I Made $2,000,000 In The Stock Market is a trading diary of sorts. The bulk of the book is a discussion of the various trades the author made over about a 6 year time frame. Some readers will find that interesting, others will yawn. But that’s not what you read this book for, fortunately.
It is the developmental path Darvas takes from newbie to multimillion dollar trader – which the author interweaves with the discussion of trades -Â that is the read value to be had from How I Made $2,000,000 In The Stock Market. Anyone who has gone through that developmental process as a market participant will immediately be able to relate, and those who haven’t yet (or are just starting to do so) will see that even wildly successful traders went through their struggles.
In parallel with the author’s discussion of his personal trading development is also the construction and refinement of his trading strategy. As is the case with most traders, he started on one path, but shifted course several times until he finally found the methodology which suited him best.
Darvas employed a combined fundamental and technical approach which is the core of the popular CANSLIM methodology outlined in How to Make Money in Stocks. It’s not an exact thing in terms of application, as Darvas developed an entry/exitÂ strategy based on what he called boxes, but a great deal of the preliminary set-up elements are very, very close. That philosophy is definitely something that works. I can personally attest to it myself, though I have never employed Darvas Boxes or anything like that.
The issue a reader might have, though, is that the outlining of this methodology isn’t concisely presented. Rather, it’s spread out over the course of the narrative, presented in bits and pieces over the timeline as Darvas refined his approach to trading. It would probably take a couple of readings to really get a handle on things.
Overall, I definitely think there’s value to be had in How I Made $2,000,000 In The Stock Market. If nothing else, it proves that part-time trading canÂ be extremely rewarding. As I commented above, it’s not a great read as books go, but there are quite a few good nuggets in the text if you can fight through.
Darvas must have enjoyed the notoriety he developed because he authored a couple of other books as well. If it get the opportunity, I might give them a read down the road.
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