Trading & Options · Profile from Trading and Options Research Companion
Nicolas Darvas
The Hungarian-born ballroom dancer (1920–1977) who, by his own account and Time's, made more than $2,000,000 trading US stocks by cable and telegram while touring nightclubs in 1957–59, wrote it up in How I Made $2,000,000 in the Stock Market (American Research Council, Larchmont, New York, 1960), and became the subject of the first New York Attorney General action under a broadened state law against fraud in investment advice. The state's chief accountant could find only ~$216,000 of "ascertainable" profit and called the story "unqualifiedly false" (Time, 19 Dec 1960); Darvas called the action "book burning by publicity". The courts then fought over whether the state could even investigate a book: the trial court threw out the order (30 Dec 1960), the Appellate Division agreed (11 Apr 1961), and the New York Court of Appeals reversed and reinstated it on 7 Jul 1961 (10 N.Y.2d 108). No public finding of how the inquiry finally ended was found by this batch. His "box" method — buy a rising stock as it breaks above a trading range, with a stop just below — is graded D in this knowledge base (Darvas box). He is the book's standard case of a story that can be told precisely and checked only partly.
At a glance
- Born / died
- Born 1920 in Hungary; died 1977 in Paris (Wikipedia; exact dates not confirmed — verify). Trained in economics at the University of Budapest; left Hungary for Istanbul in Jun 1943 with a forged exit visa and £50 (Wikipedia)
- Type
- Individual trader (own account) and author; a professional dancer with his half-sister Julia. This profile has five moves (rule 6 allows 5–7 for individuals): almost everything about his trading comes from his own book and two magazine reports
- Markets
- NYSE and American Stock Exchange growth stocks of the late 1950s (E. L. Bruce, Universal Controls and others named in Time, 1959); earlier Canadian penny stocks (from memory, verify)
- Scale (dated, reported)
- "A fortune of more than $2,000,000" (Time, 25 May 1959 — Darvas's own account as reported); "$2,450,000 in 18 months" in the 1957–58 market (Wikipedia and a blog summary of the book — secondary); ~$216,000 of profits the New York Attorney General's office could trace (Time, 19 Dec 1960); state investigators conceded they could not trace all his accounts in Manhattan, Panama and Switzerland (Time, 1960)
- Book
- How I Made $2,000,000 in the Stock Market (American Research Council, Larchmont, N.Y., 1960 — Internet Archive catalogue record); ~120,000 copies sold by Dec 1960 (Time); in print since
- Regulators and courts
- New York Attorney General Louis J. Lefkowitz under the Martin Act (General Business Law Art. 23-A, §§352–354); Supreme Court, Special Term (Epstein J., 29 Misc.2d 777, 30 Dec 1960); Appellate Division (13 A.D.2d 75, 11 Apr 1961); Court of Appeals (10 N.Y.2d 108, 7 Jul 1961, Froessel J.); US Supreme Court certiorari denied (368 U.S. 947; date not confirmed — verify)
- Signature moves (incl. failures)
- First shares and the gambling years (1952–56); the box method traded by cable on tour (1957–59); the 1960 book and its publisher; the Lefkowitz inquiry (1960–61); later books and the legacy (1964–77)
5 strategic moves analysed
Each one gets a full strategy file in the companion: context, the decision, the financing, what happened, and the lesson.
1952
First Shares and the Gambling Years
Start of a career / losses and learning (failure)
1957
Box Method by Cable on Tour
New strategy / large trades (reported)
1960
How I Made 2000000 and American Research Council
Publication and distribution (education business)
1960
Lefkowitz Martin Act Inquiry
Regulatory, enforcement or legal action
1964
Later Books and the Darvas Legacy
Education business / strategy pivot (from cheerleader to critic of Wall Street, then back)