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Registered User
Joined: 12/2/2004
Posts: 1,775
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Finally read the mother of stock books, Reminiscences of a Stock Operator, thinly cloaked story of famed trader Livermore. After having previously read the Nicholas Darvas story, How I Made $2,000,000 in the Stock Market (book nearly equally as famous), I hereby proclaim the winner to be Mr. Darvas with a techinical knockout. Great time tested wisedom in each book, but I found the Darvas book much more enjoyable. Darvas was an amateur investor who turned about $25,000 into 2 mln+ in short order; so impressive the way he methodically did it that Time Magazine profiled him in an article. Both their trading styles similar to William O'Neill's IBD mantra, i.e. buy at new highs, always average up not down, combine technical with fundamental, tight stops. I assume most here have read Livermore, and by all means you must read Darvas, and also O'Neill's "How to Make Money in Stocks"...quick easy read the Darvas book but no wasted words, and humorous too.
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Registered User
Joined: 11/11/2006
Posts: 359
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pretry: Appreciate your suggestion RE: Nicholas Darvas. "Reminiscences" may be my favorite book, and not just because of the finances, but an enjoyable read. I have given my personal copies away proberly six times to fellow traders who have not heard of it. Many single sentence words of advice. I'll get Darvis's book. Thank you. You may have not heard of Dan Zanger. He was profiled in "Stocks and Commodities" magazine. Twice. He turned about the same into +40 million in a little over two years. He said that he used no technical indicators at all. (He did not know what Stochastics was till recently) He claimed that he looked at over 400 stocks a night, and watched only price and volume. Talk about basic!!. He followed the O'Neill formula for break-outs. Dan has a website and a newsletter, somewhere. Being somewhat a student of both, it is amazing the financial advice you can get from Sun Tzu "The Art Of War". Many of the principals are the same.
I think I have every book O'Neill wrote.
And a whole lot of the big boys play Poker.
Good tip, thanks
Mammon
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Registered User
Joined: 12/2/2004
Posts: 1,775
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Mammon, thanks for tip on Zanger and Tzu, will most definitely investigate. I didn't give enough credit to Livermore above; I absolutely liked the book and highly recommend. You mention Livermore book's single sentence words of advice, I know what you mean; one of my favorites is the financier's quote, "I got rich by never buying at the bottom and always selling too soon." Took me a minute to digest that before light bulb came on in my head. I just got in the mail today via ebay, Tape Reading and Market Tactics, by Humphrey Neill. Like Livermore and Darvas, another smallish book that seems to have a long time loyal following.
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Registered User
Joined: 9/21/2005
Posts: 566
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I read both and my vote is for Jesse Livermore. Neither book presented a 'how to' on how to trade - as in set-ups, money management, risk reward etc... But Jesse's book at least provided good fundamental truths about how markets work and how to avoid major mistakes. Which is ironic in a way given that he probably did not follow his own advice. Darvas was a good read but found it sparse with anything that has practical value. You can read his approach but its only explained in general terms so there is no effective way to emulate it.
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Registered User
Joined: 12/2/2004
Posts: 1,775
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jcfla7, Darvas was quite specific in detailing his method, even providing numerous actual prices for buys, sells, and add ons. And he gave examples and philosophy of his money management, explaining exactly where he likes to put stops, take profits, etc. He also gives specific examples of his "box" system of pyramiding, accompanied with graphics. And in a longish Q&A at the end, 19 pages, he goes into even more detail explaining his system. Granted the book is not an ongoing technical treatise on the mechanics of trading, rather his technical advice interspersed throughout his fascinating (to me) story. I thought Darvas did have some plain old luck on his side though...like Livermore he would sometimes be too risky by putting almost all his money in just a couple of stocks.
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Registered User
Joined: 9/21/2005
Posts: 566
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My recollection was he talked a lot about stocks jumping around in 'boxes' and a bit after the fact how some fundamental factors led to a few of his stock picks having monster runs. I recall he mentioned using Barrons every week to screen for the boxes while he was traveling overseas, but not much beyond it. Maybe you picked up more from it than I did. Not to put Darvas down as an investor though because I think he's one of the best just that as a realistic 'how to' to trade I found it lacking.
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Registered User
Joined: 12/2/2004
Posts: 1,775
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jcfla7, your take on Darvas is fine with me, appreciate feedback very much. Yea, we have it easy compared to the olden days when getting timely updated stock info (Barron's, papers) was about impossible unless you were in a broker's office, and even those old ticker tapes were not exactly real time. Maybe we could all learn a lesson from those wise trail blazers, slow down and not get mesmerized by our computer real time stock streamers....I know I'm guilty of it:)
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