Right, but it was in the 50s...
Reminiscences of a Stock Operator...
- Thread starter alanack
- Start date
Right, but it was in the 50s...
You guys and gals are so funny!
He was an investor..Wow.. That sounds like the F word
. So what? I am a daytrader and a swingtrader. I rarely hold a position for more than week. I know what it means to make steady income from the market. But you do nto make the steady income minute by minute or day by day every day.. That's impossible!!! Everyone that claims that, is from the 90-95% of the losers.
Even Jesse Livermore mentioned that this is one of traders biggest mistakes. You can't have a reason to always be in the market ..
Back to Darvas. If you are able to make 2.25 million dollars from 38000, in 2 years from your "hobby" and you manage to KEEP the money, well if it were me, i would not care if i am called a daytrader microtrader or whatever... Jesse made nice rules, but apparently he did not follow them.. And also, there are some legends about him and his life.. He made a ton in 1929, then lost it all by 1934.. And in 1940 he either did not have any money or had some but not enough to start trading.. Same is with Gann - some claim that he made 50 mln in his life, while Elder claiims that the total value of his estate at the time of his death was 100000, not a bad amount in the 1940's..
He was an investor..Wow.. That sounds like the F word
. So what? I am a daytrader and a swingtrader. I rarely hold a position for more than week. I know what it means to make steady income from the market. But you do nto make the steady income minute by minute or day by day every day.. That's impossible!!! Everyone that claims that, is from the 90-95% of the losers. Even Jesse Livermore mentioned that this is one of traders biggest mistakes. You can't have a reason to always be in the market ..
Back to Darvas. If you are able to make 2.25 million dollars from 38000, in 2 years from your "hobby" and you manage to KEEP the money, well if it were me, i would not care if i am called a daytrader microtrader or whatever... Jesse made nice rules, but apparently he did not follow them.. And also, there are some legends about him and his life.. He made a ton in 1929, then lost it all by 1934.. And in 1940 he either did not have any money or had some but not enough to start trading.. Same is with Gann - some claim that he made 50 mln in his life, while Elder claiims that the total value of his estate at the time of his death was 100000, not a bad amount in the 1940's..
I love these people who get their panties all in a bunch over what is a "real" trader and what isn't. The idea that one isn't a real trader if he carries anything overnight is particularly worthy of note.
Reminds me of that old joke about the guy asking the woman if she'll sleep with him for $5, to which she replies "I'm not a hooker", after which he asks her if she'll do it for $5M . . .
(and if you don't know the punch line, she agrees, at which point he says that she's a hooker after all, he's just trying to establish her price . . . )
Reminds me of that old joke about the guy asking the woman if she'll sleep with him for $5, to which she replies "I'm not a hooker", after which he asks her if she'll do it for $5M . . .
(and if you don't know the punch line, she agrees, at which point he says that she's a hooker after all, he's just trying to establish her price . . . )
I think making a million being short in less than a year in 1906 is a much bigger accomplishment than being a perpetual bull and having the market on your side. Darvas would have been nowhere with his inital stake if he started out during a stagnant bear market and we would have never ever heard of him unless we were professional dance enthusiasts. Let's even say that after a few successful "trades" Darvas quit his dancing right into a 5 bear market. How and how long would he have survived? Remember, he cannot act during a bear market. He had a stake he could afford to lose and that he never needed to touch. Quite different from a trader that takes out cash for living expenses.
Some of you obviously do not trade for a living. Yes I wish I was rich or graduated into a job market where I could have a reasonable job that I actually enjoyed so that I could speculate/invest on the side. But that is not reality to me and many others, particularly many recent college grads. Yes it's nice to have some pipe dream about how one can get rich being a "trader" that only buys for long periods, but this isnt 1950s, 1980s or 1990s. Many of us trade everyday for a living and go on from there. I know traders that make money 250 out of 255 trading days a year so do not even try to say that it is impossible to do so. It's done by more people than you think. To consistently take out profits every single month as a day trader is very feasible.
Every evolving trader realizes that eventually they need to step up and increase hold times and move toward investing/speculating as their capital grows if they ever plan on amassing a real fortune. Livermore goes into heavy discussion about this. If you have a job or a fortune stake where you have free capital to play with like Darvas did, go for it. You might want to wait for a bull market though. Otherwise, you are a day to day trader just like Livermore started as. That is what most traders are. That is how the humongous trading business even exists, through real day to day traders. They can't wait for a bull market and just concentrate on professional dancing during bear markets. That's for investors.
For all the prop firm hacks, there 10 times the mom & pop investors that already lost all their life savings and will do so every single cycle. For every 20 point up move that some investors made in NYSE stock, successful traders and specialists made 30 in the flunctuations. Broker Dealers, Trading house and NYSE have taken millions of investors dollars while investors have taken zero of theirs.
I don't think comparing him to one of the greatest stock market "operators" of all time adds much. The fact is he made a huge sum of money. Just because he didn't make the "most ever" is hardly a slight.
Darvas had lost money, quite a lot of it. He didn't just become successful from day one, you know. Darvas had the mighty bull market of '54 pass him right by, during which he still managed to lose money. And once he got better, he managed to sit out the bear decline of '57. That was a pretty wise "action", if you ask me. Yeah, he did clean up in the big bull market of '58, but by then he had a way of looking at the market that allowed him to capitalize on the bullishness. To pretend that it was only luck is ridiculous.
Even in the raging bullmarket of the late 90s, the averages only went up 30% or so a year. Whilst that's a huge return, it doesn't transform $36,000 into more than $2MM in two years. Darvas knew what he was doing and done it well. The fact that his strategy made him sit out bear markets in no way takes away from that. Hell, it's probably a smart move: they say even bears don't make money in a bear market. (And having a long only strategy doesn't make one a "perpetual bull", that myth is "perpetual bullshit".)
Buddy, nobody forced you to trade for a living. If you're finding the going tough (I know, I know, you conistently take money out of the markets, bravo), who's to blame but yourself? Who's to blame but yourself if you can't find a "decent job"? You talk about Livermore yet ignore one of his post important lessons, that of the "Wall St Sucker" who has to trade every day. Biding your time while waiting for the right conditions isn't just for "investors" (and if you're calling Darvas an investor, you obviously haven't read his book), in fact it's not really for "investors" at all. Modern day investment strategy is built around LTBH, which disregards conditions.
This disdain for investment is somewhat hard to understand. Do you really think that people following modern investment strategy "lost all their life savings"? (Where was the Dow in Mar 2000, where is it now?) Or were those people doing something else?
In the end, everyone has their ideas on what successful trading is and how to achieve it, but shooting down someone else's success because it doesn't fit (or challenges) your own pre-existing requirements is downright silly.
Excellent observation DbPhoenix. I totally agree.
So true ... so true.
I tried to give this gentleman the same sort of sense in another thread:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=39442&perpage=6&pagenumber=3
If you want to read about a trader/speculator, which was better than Livermore and Darvas, you must read about Arthur Cutten and/or Bernard Baruch.
I don't know any books about Cutten (!), but there are two about Baruch. He wrote himself one about his life: "My Own Story", and James Grant has also written a book about old Bernie: "Bernard Baruch. The Adventures of a Wall Street Legend". A very good book.
I don't know any books about Cutten (!), but there are two about Baruch. He wrote himself one about his life: "My Own Story", and James Grant has also written a book about old Bernie: "Bernard Baruch. The Adventures of a Wall Street Legend". A very good book.
Hahaha, i am sure you can't take money out of the markets every day. Everyone that claims that is either lying or he is plain lucky.
Even Marty Schwartz, the "pit bull" says in his interview that he manages to be break even 200 days in an year, and only those 50 remaining days make his money ..When Gary Smith used to daytrade the index futures, he did not trade every day.
Of course i might be wrong.. I myself do not trade the ES every day..Otherwise i get massaged really badly
(
As for Jesse Livermore, didn;t he say in his first book, that later he stopped being a daytrader and saw that the big money are in the big movements/trends?
Wasn't he the one that bought some commodity/ forgot which one(/ in 1916-1917 and then the government closed the exchange forcing him to exit prematurely?
I also think that his 1906 shorting was a very brave move, but the way he describes it is very interesting to analyse He says that after the earthquake in 1906 the market did not go down.. Yet he went short on those news.. So he played on NEWS. He was an amateur..A lucky one.. The sharp decline was just luck in my opnion. After making this killing, he lost his fortune..
Also after 1934 he could not make a lot of money because SEC was introduced and he could not make money..Remember the last 2 chapters where he talks about cornering stocks..Driving stocks prices artificially higher..The public steps in..He sells..The stock crashes.. Or he makes an interview lying about his positions. He says the market is gonna increase, everyone buys, he sells short) Or in one interview in his first book he was short something/ again forgot what)/ and there was an article claiming that he said he was short and everyone rushed to sell, and he managed to get out at a nice profit..
Even Marty Schwartz, the "pit bull" says in his interview that he manages to be break even 200 days in an year, and only those 50 remaining days make his money ..When Gary Smith used to daytrade the index futures, he did not trade every day.
Of course i might be wrong.. I myself do not trade the ES every day..Otherwise i get massaged really badly
(As for Jesse Livermore, didn;t he say in his first book, that later he stopped being a daytrader and saw that the big money are in the big movements/trends?
Wasn't he the one that bought some commodity/ forgot which one
(/ in 1916-1917 and then the government closed the exchange forcing him to exit prematurely?I also think that his 1906 shorting was a very brave move, but the way he describes it is very interesting to analyse He says that after the earthquake in 1906 the market did not go down.. Yet he went short on those news.. So he played on NEWS. He was an amateur..A lucky one.. The sharp decline was just luck in my opnion. After making this killing, he lost his fortune..
Also after 1934 he could not make a lot of money because SEC was introduced and he could not make money..Remember the last 2 chapters where he talks about cornering stocks..Driving stocks prices artificially higher..The public steps in..He sells..The stock crashes.. Or he makes an interview lying about his positions. He says the market is gonna increase, everyone buys, he sells short
) Or in one interview in his first book he was short something/ again forgot what)/ and there was an article claiming that he said he was short and everyone rushed to sell, and he managed to get out at a nice profit..