HOW I MADE
$2,000,000
IN THE
STOCK MARKET
BY Nicolas Darvas
Martino Publishing
Mansfield Centre, CT
2011
Martino Publishing
P.O. Box 373,
Mansfield Centre, CT 06250 USA
ISBN 978-1-61427-699-9
2014 Martino Publishing
All rights reserved. No new contribution to this publication may
be reproduced, stored in a retrieval system, or transmitted, in any form or
by any means, electronic, mechanical, photocopying, recording, or otherwise,
without the prior permission of the Publisher.
PUBLISHERS FOREWORD
How This Book Came to Be
I t was in the issue of May 25, 1959, that Time Magazine devoted almost a full page in its Business Section to the extraordinary stock-market story of a dancerNicolas Darvas.
Time told how this complete non-professional, who ignores tips, financial stories and brokers letters, was able to make himself a millionaire several times over through the investment methods he developed.
This article raised a lot of eyebrows among Wall Streeters who were shocked by Mr. Darvas disregard for many of the long-accepted, ordinary investment practices to which they were accustomed. But it also fired the interest and imagination of thousands of investors across the country.
We at the AMERICAN RESEARCH COUNCIL, publishers of many of the most widely-used and authoritative investment and business guides, were also impressed by Times brief outline of Mr. Darvas successful investment methods. As a result, we decided to approach Mr. Darvas about writing a book describing his techniques. This was not easyto find him, our chief editor had to track him down in Paris where he and his partner, Julia, were starring on a French television program. There we discovered the remarkable set of circumstances that were to make this unique book possible.
First, Mr. Darvas is a showman. His dance act is one of the most exciting international acts in show-business history, and he and his sister Julia have starred in some 34 countries. He is accustomed to being constantly in the spotlight of public attention. Therefore, he had no hesitation, as might many private individuals, in making public the details of the stock transactions which went into his making a fortune. Perhaps never before in history has any individual so fully exposed his financial dealings to the public eye.
Second, it turned out that Mr. Darvas is far more than a spectacular dancer. He is a highly literate individual with a solid background in economics and sociology gained at the University of Budapest; a former sportswriter, journalist and crossword-puzzle editor in his native country; and therefore thoroughly qualified to write a book.
As a result, the COUNCIL now takes pride in presenting one of the most extraordinary success stories in the history of Wall Street. It is especially significant not only because this investment record was made by a true nonprofessional and outsider who was investing for that legendary second income, but also because the profits he made were not the result of a lucky killing or chance tip.
On the contrary, the investment methods that eventually made Mr. Darvas a millionaire were the result of hard-won experience, years of mistakes and learning from those mistakes. These specific, highly practical methods can serve as a useful guide to every individual investor.
We think that Mr. Darvas techniques, especially his unique Techno-Fundamentalist Theory, and many of his pithy stock-market maximsI just jog along with the trend trailing my stop-loss insurance behind me. There are no good or bad stocks, there are only rising and falling stocks. I can become a diagnostician but I can never become a prophet.will become an accepted part of the pages of Wall Street history.
To further clarify Mr. Darvas approach, the COUNCIL has drawn up and added to his book a number of charts showing his operations in the major stocks that helped him make over $2,000,000 in the stock market in a period of 18 months dating from when he first successfully applied his perfected theory.
Mr. Darvas is still a dancer, because that is his profession; and he is still an investor, because he enjoys it and still makes money at it. Everything about him is unorthodox. He has no office, not even a desk for his financial dealings. He works from his hotel room or the bar in the Georges V in Paris, the Dorchester in London or the Plaza Hotel in New York. When he is in New York, his favorite city, he sits every evening at his usual table in the fashionable Oak Bar of the Plaza Hotel with a newspaper page, a telegram, and some figures on a half-sheet of paper. He appears to be relaxing like the others around himbut actually he is studying stock prices and analyzing the market with the brilliant approach he has evolved over the past few years and which has brought him millions.
The story of Nicolas Darvas is one of the astonishing legends of todays America. We are proud to be able to publish it in a book which we believe will be a stock-market classic for many years to come.
AMERICAN RESEARCH COUNCIL
Contents
How I Made $2,OOO,OOO
in the Stock Market
In the morning of September 3, 1958, the following cable arrived at the Gloucester Hotel in the Crown Colony of Hong Kong:
BOUGHT 1300 THIOKOL 49
...
This purchase represented one part of a chain of purchases that were to net $2,000,000 in eighteen months.
And this is the story of the events that led up to it...
The Gambler
CHAPTER ONE
Canadian Period
I t was November 1952. I was playing in Manhattans Latin Quarter in New York when my agent telephoned. He had received an offer for me and my dancing partner, Julia, to appear in a Toronto nightclub. This was owned by twin brothers, Al and Harry Smith, who made me a very unusual proposition. They offered to pay me in stock instead of money. I have had some strange experiences in show business, but this was a new one.
I made further inquiries and found they were prepared to give me 6,000 shares in a company called BRILUND . This was a Canadian mining firm in which they were interested. The stock at that time was quoted at 50 cents a share.
I knew stocks went up and downthat was about all I did knowso I asked the Smith brothers if they would give me the following guarantee: if the stock went below 50 cents, they would make up the difference. They agreed to do this for a period of six months.
It so happened that I could not keep that Toronto date. I felt badly about letting the brothers down, so I offered to buy the stock as a gesture. I sent them a check for $3,000 and received 6,000 shares of BRILUND stock.
I thought no more about it until one day, two months later, I idly glanced at the stocks price in the paper. I shot upright in my chair. My 50-cent BRILUND stock was quoted at $1.90. I sold it at once and made a profit of close to $8,000.
At first I could not believe it. It was like magic to me. I felt like the man who went to the races for the first time and with beginners luck backed every winner. Cashing his winnings he simply inquired: How long has this been going on?
I decided I had been missing a good thing all my life. I made up my mind to go into the stock market. I have never gone back on this decision, but little did I know what problems I would encounter in this unknown jungle.
