[U.S.] Nicolas Darvas: “I Survived the Stock Market”

2,792 characters2007.07.22

[U.S.] Nicholas Darvas: *I Survived the Stock Market: How a Person with No Financial Common Sense Can Survive in the Stock Market*, translated by Huang Jia, China Machine Press, May 2007, 21 yuan

At my mom’s urging, I too have started playing the stock market~

Playing the stock market is a game in which, while sitting at home and clicking the mouse and tapping the keyboard, you can make capital grow geometrically (of course, it can also shrink geometrically). Buying and selling are so easy that you may often forget that every time the screen flashes “trade successful” in those four little characters, it means you have just completed a transaction worth tens of thousands of yuan.

At present, I can control 10,000 yuan of principal. Last Friday morning I entered the stock market and, on my mother’s recommendation, casually bought three stocks, 1,000 shares in all. It seems my luck was pretty good: by the close that day, after deducting all handling fees and stamp duty, I had already made a net profit of 265 yuan on paper.

Yesterday, my mother pointed to the words “investment philosophy” in an advertisement on the newspaper and asked me whether I had such a philosophy. I said I didn’t know, but if she was interested I could find a few books for her to look at. So today I found this book and brought it back, of course first quickly skimming through it myself.

The original title of this book is “Wall Street: The Other Las Vegas,” which says that the Wall Street stock market is a casino bigger than Las Vegas. The Chinese translation changed the name into the current main and subtitle, obviously in order to suit the needs of today’s stock investors.

Still, this Chinese title does not deviate too much from the book’s central point. Darvas’s “box trading method” really requires no financial knowledge or technical skills of assessment and analysis; it only requires understanding stock price rises and falls.

In fact, the stock-trading methods mentioned in this book, written in the 1960s, are no longer unfamiliar today. My mother can also explain similar techniques in great detail—buy only when you are sure the stock is rising, and sell only when the stock is falling; in addition, observe each stock’s fluctuations. It is said that stocks in an uptrend always fluctuate within certain ranges until they break out of that range (the “box”) and enter the next, higher box to continue fluctuating, while Darvas’s method is always to buy when the stock has just broken through the previous box.

As far as I know, the stock-trading software my mother uses and sells on behalf of others gives prompts in a similar way. But the problem with my parents is that although they know this principle, their mindset is not good; when prices fall, they are often reluctant to sell, and when prices rise, they are often unable to buy in (because they are almost always fully invested). Now that I’m playing stocks myself, perhaps I can actually put this strategy into practice?

Of course, stock trading, like any game, will not take up too much of my time. I haven’t played a single game at all so far this summer vacation this year (which is very abnormal), so I’ll play this one for now.

July 22, 2007