Wall Street the Other Las Vegas by Nicolas Darvas

Here are the maxims from Nicolas Darvas in the book:

“Brokerage commissions are the primary reason for the existence of the organised stock exchanges; without the brokerage commission, there will be no Wall Street casino.”

“…dividend or no dividend, the stock of the corporation will continue to be traded in the market. And the truth of the matter: it will be traded largely on the basis of the buyer’s estimate of how much he may subsequently sell it for. This is speculation, this is the gamble.”

“Business is one thing; stocks are another. As I had seen, an industry or a corporation can boom while its stock busts, and it is possible, as far as I could tell, that the same thing could happen in reverse.”

“A share of stock, whatever the relationship it may have to the corporation that issues it or the industry that it represents, has no intrinsic value other than the amount that it will fetch in the market, based on the simple law of supply and demand.”

“I never sell a stock while it is rising. Why get off a winning horse? And it never hold one that is declining. Why stay with a loser?”

“Timing was the important thing, and had nothing to do with fundamentals or even with “growth” as such; it had to do with the behaviour of the stock on the market.”

“It is anticipation of growth rather than growth itself that makes for lively speculation and big profits in the so-called growth stocks.”

“I found that the best places to look for the tip-off to the market is in the market.”

“My only sound reason for buying a stock is that it is rising in price. If that is happening, no other reason is required. If that is not happening, no other reason is worth considering.”

Darvas called himself a techno-fundamentalist, and these are the things he look out for:

Technical:

• Box system
• Volume
• Historical Peak Price Related to Present Price
• On-stop Buy-Order

Fundamental

• Capitalization
• Industry Group
• Expected Earnings