Want to read about a big trader much better than Livermore? Read the books of and about Bernard Baruch.
Reminiscences of a Stock Operator...
- Thread starter alanack
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Want to read about a big trader much better than Livermore? Read the books of and about Bernard Baruch.
Well, this assumes our trader in question has to be born as a good trader. This also suggests there are practicaly no good traders since plenty of known good ones report going broke, and not once in many cases, before they get it right. This also fully ignores upside part; I mean per this quote someone who trades 10K capital and makes $500 a year never going broke is better trader than that same Livermore... Let's not take one-liners as absolute truth, there is usually much more to the matter.
Please, notice that I haven't claimed absence of objectivevalue in Darvas book. I used "Different strokes...", "I for one" and "For me that is" to underline the point. Being short term trader, I use CANSLIM, umm, try never. I don't believe any of short term traders sees much help in it.
Thus, the point stays: maybe investor or trader operating in such time frame that borders with investing will find value in Darvas. I can't be judge of that since I am neither. For short term trader though Livermore provides much better insight into market's mechanics, trader's psychology and all surrounding matters.
Plus, I really don't understand what the fact that Livermore never overcame some dark spots in his personality has to do with the fact that his apporach to the markets allowed him to go to the very top. Learn from his wins, learn from his losses... both are described in such way that feels compelling to the traders for very long time. This is major value of the book.
These discussions (this isn't the first at ET) are so often based on what readers think they read rather than what's actually there. For instance, mention of the fundamental component to Darvas' strategy is rarely made, which may be why so many beginners fail with it.
While Darvas' strategy is sound, it's mostly splash. If one breaks down the $2M into its components, a lot of the result was due to luck. This is not to say that it didn't do just fine, and probably better than most, but the "Darvas box" is not the graille.
I've found Darvas to be an excellent component to a longer-term strategy based on Wyckoff/Livermore and Dow Theory, for example buying during March/April two years ago and backing away last February. However, like Vad, I've found it to be pretty much useless for daytrading.
As for Livermore, I find Wyckoff to be of far more practical value. Unfortunately, the best of Wyckoff is not available in an affordable form. However, if one is creative, he can meld Livermore with Schabacker and come up with a pretty nice trading strategy.
"Before Livermore shot himself, he said he's life as speculator was a failure"
I could be wrong here, not a Livermore historian, but I believe at the time of his suicide he, and the estate he left, was obscenely loaded.
His comment about hie failure was not about $$$ gain or loss. Rather it was regarding the source of his psychological trauma, ie his family was wacked out (wife almost shot his son in their Santa Barbara estate)
In other words he blamed his attention to his profession on his failed personal life.
The source is a biography about Livermore.
I could be wrong here, not a Livermore historian, but I believe at the time of his suicide he, and the estate he left, was obscenely loaded.
His comment about hie failure was not about $$$ gain or loss. Rather it was regarding the source of his psychological trauma, ie his family was wacked out (wife almost shot his son in their Santa Barbara estate)
In other words he blamed his attention to his profession on his failed personal life.
The source is a biography about Livermore.
I think it was JL's lack of control of his love for the women that caused him so many problems. He walked away from most of what he had in his two divorces. The last divorce from Dorothy him more than financially broke. It broke his spirit, drive and motivation. But, Jesse made and spent a lot of money in his years. I have read that when the money Jesse made at the time he made it is adjusted for inflation, he made more than Bill Gates and Warren Buffett combined. I have not tried to run any numbers in an effort to prove or disprove the claim; But, I know Jesse made billions in todays dollars.
Well, it seems that Darvas was very lucky in his stock investing..However.. He used a nice "protection" called a stop loss..Had the stock broken out of his boxes ,he would have been out. Yes he made money in a bull market ,and according to his book "wall-street the other las vegas" he had 2,45 mln in 1962-3.. Ok ,so what? He kept his money, he didn't lose them. He was a trader.. Not an investor.. An investor is somebody that keeps his sotkcs for life.. Darvas did not hold his shares for more than several months.. A lot of Darvas critics fail to mention that he talks a lot about his early failures and also about the stocks he tries to buy, but is stopped out..Yes he takes small lossess.. But during a bear market he did not touch anything.. If you read his last book/ the third one/ you would have seen that he was stopped out of his last position in january 1973 and did not touch a stock for about 1,5 -2 years!!!
A lot of people here are underestimating Darvas style, but tell me, how many traders were SHORT the market in 1995- 1999.. My answer is : A LOT.. Only when it became a wide spread idea that stocks are gonna continue up forever did a lotta of the small traders become bulls.. If anyone does not believe me..I think if u go to erlangersqueeze.com he has some reports on that.. At least he had them in 2003, when i had a trial subscription to him..
As for Jesse- he is good.. I also try to read the book at least twice an year.. I read it for the first time in 2003 though..
))
Sorry for the long post..)))
A lot of people here are underestimating Darvas style, but tell me, how many traders were SHORT the market in 1995- 1999.. My answer is : A LOT.. Only when it became a wide spread idea that stocks are gonna continue up forever did a lotta of the small traders become bulls.. If anyone does not believe me..I think if u go to erlangersqueeze.com he has some reports on that.. At least he had them in 2003, when i had a trial subscription to him..
As for Jesse- he is good.. I also try to read the book at least twice an year.. I read it for the first time in 2003 though..
)) Sorry for the long post..
)))In other words, he COULD NOT MAKE ANY MONEY during a bear market. PERIOD. Not a trader but an investor.
Why do you think he kept his dancing career. Some of it was for passion but the bottom line is that Darvas could not say to himself "I can make a steady living from the market". He could not and never did. He made speculative investment plays which paid off quite well, be it luck or not. But it was a bull market strategy, just like buying anything with a ".com" 5 years ago.
Some posters here have zero idea what it means to be a day trader and making a somewhat steady income from the market. That means minute to minute, day to day strategies in any market.
Making $2MM in the 60s not good enough these days?
And he's now all of a sudden an "investor"? Umm, yeah, right.
Who cares about making a "steady living from the market"? Do you wanna get rich or make a "steady living"?
The man made his cash and didn't give it back. That's more than you can say for the vast majority of prop shop hacks.