A May 25, 1959 Time Magazine article called “Pas de Dough” was recently forwarded to Michael Covel. It was about a professional dancer named Nicolas Darvas, who had made two million dollars trading stocks. This was probably one of the first trend following articles to appear in a major publication.
Sports metaphors when it comes to trend following work great, but there are clearly others. For example, both trend following and dancing judge the public’s enthusiasm and use that as the indicator for the next move.
In this monologue, Covel talks about the article and Darvas’ book, breaks down the fundamentals of trend following, and explains why the philosophy behind trend following still applies today. He also comments on how trend following can be applied to the current black swan economic situations in China and Greece.
In this episode of Trend Following Radio:
- What trend following and dancing have in common
- The philosophical foundations of trend following
- Stock trading and location independence
- Why relying on “fundamentals” is fool’s gold
- What being a silent partner in the trend means
- Why Darvas’ thinking from 1959 still applies today
- The importance of having no ego when it comes to trading
“The only sound reason for my 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” –Nicolas Darvas
Mentions & Resources:
- “Pas de Dough” article in Time Magazine from May 25, 1959
- “How I Made 2 Million Dollars in the Stock Market” book by Nicolas Darvas
- Dan Andrews and location independence on Trend Following Radio
- Covel monologue on his recent trip to China
- Ed Seykota #2 Interview on Trend Following Radio
- Alan Watts on the mind, worry, and compulsive thinking
Get the foundation to making money in up, down and *surprise markets on the Trend Following mailing list.
Have a question or comment about this episode? Post it below.