The Past meets the Future

Years ago, I picked up the classic trading gem How I Made $2,000,000 in the Stock Market by Nicolas Darvas (first published in 1960). Darvas was a world-class dancer who traded while traveling—often with nothing more than delayed daily or weekly updates from his broker back in the States. No tick-by-tick obsession. No constant headlines. Just a simple process and the discipline to follow it.

I recently reread that book alongside another favorite of mine, The Perfect Speculator by Brad Koteshwar, which lays out the character Boyd Hunt’s approach to the market. What surprised me was how closely the two books rhyme—despite being written roughly 45 years apart. Some things about markets just don’t change. As Boyd put it: “There is absolutely nothing new in the market. Every trick and system has been tried before in one form or another.”

The Investor

When I think of an investor, I think of Warren Buffett—someone who can buy great businesses and hold them through decades of noise. In that world, drawdowns and volatility are part of the deal, not a reason to act.

Buffett on holding: “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”

The Speculator

But buy-and-hold isn’t the only path. Boyd argued that for those who simply ride every bull and bear cycle, “I would have been incredibly lucky to come out just about even after decades of fully being invested….the brainwashing goes on that the markets cannot be timed.”

I’ve noted the reality is we ourselves sabotage our own accounts by our own intellect. Boyd takes it further: “It is the human mind that kills most trading accounts.” That lines up with the brain-based trading concepts we’ve talked about here over the years. And of course, brokers love activity—traders and investors are where their profits live.

When I think of speculators, I think of Jesse Livermore. Boyd describes speculation as an art: spending long stretches on the sidelines, watching and waiting—often with no money in the market—until conditions are right. Only after a trend is confirmed do they press hard and go “all in.” When in doubt, do nothing.

Here are a few quotes that capture that mindset:

• The market fools everybody most of the time.
• Truly successful speculators are a silent, almost non-existent minority in the market.
• The only good stock is the stock that makes me money.
• Only a speculator will call himself a speculator.

The incredible thing about great speculators like Darvas, Livermore, and character Boyd is their reliance on themselves. Boyd said, “The best lesson I have learned is to rely on myself and not on anybody else.” He shunned headline news, analysts, and market gurus.

Darvas wrote that when he finally returned to New York after a long stretch of winning while largely cut off from news, he quickly lost his shirt. Tips, media narratives, and other people’s opinions got inside his process—and he gave back much of what he’d made.

Speculators look for breakouts that can run for 4–8 months—and then they exit. They’re not investors who hold through the full round trip and watch a position fall back, sometimes giving up 50% (or more) of its value. Ironically, one of the hardest parts of speculation is doing less: sitting on your hands, resisting the brain’s urge to “do something.” The less they do, the more they can make.

I keep my trading accounts separate from my long-term investing accounts—accounts that, by design, keep you invested (401(k)s, IRAs, etc.). I also keep a separate account specifically for speculation, where I apply much of Boyd’s approach to analysis and execution.

I can’t help but wonder why more traders haven’t applied the speculator’s mindset to options. My guess is simple: patience, selectivity, and fewer trades don’t generate the same high-volume transactions of commissions, fees and spreads Wall Street wants. In future posts, I’ll break down what “watchful waiting,” confirmed trends, and intelligent aggression can look like in an options trading framework. That of course will involve brain-based trading concepts.

Enuf said.