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The stock market is arguably the most attractive investment channel today. It can deliver spectacular returns, but it also carries a great deal of risk. Success or failure in this market depends on many factors: knowledge, experience, strategy, connections and more. That is why a whole range of investing books has been written to meet the needs of investors. One book every investor should own is Nicolas Darvas’s How I Made $2,000,000 in the Stock Market. It is a truly valuable book, distilling the hard-won experience the author gathered over many years.
About the Author of How I Made $2,000,000 in the Stock Market
Nicolas Darvas (1920–1977) studied at the University of Budapest. He went through countless hardships to make a living, and in the end achieved great success. He was a dancer who toured Europe and America. Alongside dancing, he developed a passion for stock investing and began to study it.
Darvas never stopped learning about the stock market. He read a great many books – some 200 on stocks alone. Through his own research he developed his personal investing principle, known as the “box” theory. Darvas also claimed that his method would detect insider activity at the earliest stage, before the company released the information to the public.
How I Made $2,000,000 in the Stock Market was written when the author was 39. Its content is the fruit of the experience he accumulated through his successes and failures, from his first days in the stock market until he became a millionaire.
What How I Made $2,000,000 in the Stock Market Covers
On his journey from learning about the market to succeeding in it, the author gathered a wealth of valuable experience. In his own words, we see his intelligence and shrewdness from the moment he accepted an offer from two brothers who owned a nightclub where he was booked to perform: they would pay him in shares, and if within 6 months those shares fell below the value of his fee, they would make up the difference. Some time later, the shares had more than doubled and he made a profit of USD 8,000. From then on, he began to invest more.
How I Made $2,000,000 in the Stock Market also describes how the author searched for brokers and investment experts, and how he taught himself and did his own research. He began learning to read and analyze companies’ financial statements, which was no easy task for a dancer. The author also sets out his own investment strategies and the technical analysis behind each of them.
Finally, the author tells the story of how he discovered the “box” theory – the principle that brought Nicolas Darvas great success in the stock market. He found that one way to spot a promising stock was an unusual rise in its trading volume compared with the past, a sign that some well-informed group was actively accumulating the stock.
Some risk-avoidance lessons from the book:
- Don’t put too much faith in investment advisory firms, even ones on Wall Street.
- Ignore all unconfirmed rumors.
- Avoid trading in OTC markets.
- Don’t strain to chase opportunities; first, minimize the risks you may face.
- Whatever the reason, never sell a stock that is rising.
In writing How I Made $2,000,000 in the Stock Market, Nicolas Darvas wanted to help investors take the right steps from the very start in this volatile market.
Our Thoughts on How I Made $2,000,000 in the Stock Market
The book is concise and to the point. Its plain, familiar terminology makes it a comfortable read, and its simple presentation carries a lot of meaning. Each idea the author puts forward comes with examples and detailed analysis that help readers understand it more deeply, while still containing solid, rigorous material on technical analysis and stock investing.
True to its title, How I Made $2,000,000 in the Stock Market recounts all the lessons and experiences of the author’s journey to making USD 2 million in the stock market. It is a genuinely good book about stock investing, with a special appeal for readers. Although it was published long ago, its lessons remain highly relevant today. Whether or not you have ever invested in the market, reading this book will likely give you many useful insights the author wanted to pass on.
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