Nicolas Darvas was a professional dancer in the 1950s that developed a trend trading system for stocks that turned his $36,000 into $2.25 million between 1956 and 1958. He used price momentum near all time highs with buy stops and trailing stops to trade the highest momentum stocks during one bull market to compound money to an astounding amount. Inflation adjusted to 2020 buying power $2,250,000 would be $20,235,830. This shows how successful he really was. The full details of his story and trades were published in his book How I Made $2,000,000 in the Stock Market.
Here are my favorite Nicolas Darvas quotes:
“My only sound reason for buying a stock is that it is rising in price. If that is happening, no other reason is required. If that is not happening, no other reason is worth considering.” – Nicolas Darvas
“I knew… that I had to keep rigidly to the system I had carved out for myself.” – Nicolas Darvas
“I was successful in taking larger profits than losses in proportion to the amounts invested.” – Nicolas Darvas
“I decided to let my stop-loss decide.” – Nicolas Darvas (Speaking on when to exit an uptrending stock)
“I also learned to stay out of bear markets unless my individual stocks remain in their boxes or advance.” – Nicolas Darvas
“I believe in analysis and not forecasting.” – Nicolas Darvas
“I became over-confident, and that is the most dangerous state of mind anyone can develop in the stock market.” – Nicolas Darvas
“I decided never again to risk more money than I could afford to lose without ruining myself.” – Nicolas Darvas
“All a company report and balance sheet can tell you is the past and the present. They cannot tell the future.” – Nicolas Darvas
“I made up my mind to buy high and sell higher.” – Nicolas Darvas
“I accepted everything for what it was-not what I wanted it to be.” – Nicolas Darvas
“I keep out in a bear market and leave such exceptional stocks to those who don’t mind risking their money against the market trend.” – Nicolas Darvas
Darvas said he never sold short. “I have never done it myself because psychologically I am not cut out for short selling. But I think markets have now changed their character so much that all experienced investors should seriously consider it. It is not for the proverbial widows and orphans, though.”
