Friday, April 3, 2020

How I Made $2,000,000 In The Stock Market

Title: How I Made $2,000,000 In The Stock Market
Author: Nicholas Darvas

The stock market is as closest to magical money as we know it. Darvas, in this brilliantly written retrospective look at how he made $2,000,000 over 18 months in the stock market, takes us through what looks like a series of natural common sense actions that we would do, which he also did, and journals the change in his approach to the markets as he gets his sweet profits and woeful losses.

A dancer by profession, with not an inkling of knowledge about markets or stocks, Darvas stumbles upon the concept for the first time when his clients of his dance show agree to pay him in stocks of a Company they are interested in, instead of cash. Later, due to good conscience he purchases the stocks anyway, though he is unable to perform the show for his client. A careless glance at the papers one morning makes him realize he has doubled his profits. With this sweet introductory taste of success, he continues to experiment in the Canadian mine companies in the market. 

From a blind-eyed gambler, investing on stocks based on crude trust and rumours under the garb of 'inside information', Darvas is quick to realize that his small profits were nothing but sheer luck, and he seeks to improvise his market methods to something better informed. He started his gambling phase at the Canadian markets, but however when he finally wraps it up and starts his work in the Wall Street, he aims to be a fundamentalist. 

Through his fundamental and technical approaches, both of which individually fail Darvas' attempt to have a formula that he can apply on stocks, he finally realizes that it's not a case of either but rather a techno-fundamentalist approach to stocks that actually works, that looks at both the fundamental workings of the Company, and also the dynamic numbers and volumes associated with the stock. 

The book is filled with pieces out of Darvas' record of what stocks he bought, how they behaved and where we went wrong or right. This makes the book in itself a standing example of what Darvas describes. It is not a book that comes down heavy on you with jargon. Darvas himself, in fact, being a dancer, starts at the very beginning when he knew nothing about stocks, and walks you all the way through how he came to make the $2,000,000.

A long time ago, way back in 2014, I read this book, and wrote a post: Five Points That I Learnt From “How I Made $2 Million In The Stock Market”. And, I learnt a whole lot of things this time that I can't incorporate all of them in this review of the book! I shall definitely do another post on it, stay tuned. 

This is an absolutely brilliant, fun, and quick read that not only amply warns about the natural course of stupidity that the brain would like to adopt in the market, but also  garners a hope that Darvas clearly maintains throughout the book that even a person who doesn't know what a stock is can hit it off big time in the markets with steady experience leading to corrective learning, and more experience!

I loved it more when I read it this second time around!

No comments:

Post a Comment

Thank you for your comments!