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Strategies & Market Trends : The Darvas Box Thread - Using the Nicholas Darvas system
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To: jan_mike who wrote (230)1/18/1999 3:13:00 PM
From: Dow Beater  Read Replies (1) of 498
 
You say, "I figure if I can identify a decent population of decent companies, many of them have to be moving up if the market's moving up. One or two should be really ripping in a bull/neutral market. That's my theory anyway."
I like your theory; however, I would add that in a down market maybe you can identify one or two that don't sink like all the other stocks. Remember Darvas with Lorillard when the whole market turned down.
"The only thing about the stock that caught my attention was its performance. The market was depressed, but I didn't need any high-priced expert to tell me that. It was evident from the performance of the vast majority of stocks listed in Barron's. They were declining. Except Lorillard. Almost alone on the Big Board it was pushing up, up, up," Darvas writes in Wall Street, the Other Las Vegas. They were developing the first filter cigarette.
My Uncle Charles made a very similar play in the early 1960s. The market was depressed. He had made a killing in a pharacutical company and walked away with about $150,000. Quite a lot for that day and time. He noticed a stock that was resisting the trend to move downward – Texas Instruments. Remember, they were developing the computer chip. They were the first guys on the block. My uncle made a much bigger killing with TI.
However, Darvas does say his system works better in a bull market.
-- Dow Beater
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