His two-year dancing tour of the world forced Darvas to rely exclusively on cablegrams as a means of communication between himself and Wall Street. Despite the many inconven­iences that were involved, this turned out to be an important element in the combination of in­vestment techniques that led to his eventual success in the stock market.

The following are reproductions of actual cables that show just how he was able to transact his stock-market operations from any part of the world. They include typical examples of the various phases of these transactions.

Once Darvas had instructed his broker as to which stocks he wanted quoted, only the initial letters of the names were neces­sary. It was the code-like nature of these messages that led to frequent difficulties with cable-office employees.

The upper cable is one he received in Karachi, Pakistan, noti­fying him that his broker had executed an on-stop purchase order. At the same time, the day's closing, high and low prices were listed for the other stocks in which Darvas was interested at the time—thiokol chemical, Polaroid, universal con­trols and LITTON INDUSTRIES.

When Darvas placed a buy order, he usually gave the full name of the stock. In the lower cable, from Phnompenh in Indochina, he transmitted a "good-till-cancelled" on-stop order for 500 shares of cenco instruments at 7¼ and 200 loril-lard at 31¼. In both cases he automatically included stop-losses (6 1/8and 29⅝ respectively), as was his practice. In addition, he brought his broker up to date on his next change of address, and requested the day's closing prices of cenco, hertz, thiokol and LORILLARp.

With his automatic stop-loss accompanying every buy order, Darvas was frequently in and out of a stock in one day. In the top cable, received in Paris, he was informed that 500 shares of a stock had been bought and later sold as the price dropped to his stop-loss point of 53⅞. Another purchase was confirmed, and the day's quotations supplied for boeing, litton indus­tries and several other stocks. The final figure represents the Dow-Jones Industrial Average for that day in abbreviated form.

Darvas was constantly changing or cancelling orders on the basis of his daily quotes. In the center cable, from Nagoya, Japan, he instructed his broker to raise the quantity of a previous diners' club order. He later cancelled this particular order al­together.

Aside from the daily wires, Darvas' only contact with Wall Street was Barron's, which was airmailed to him every week as soon as it was published. The bottom cable, from Saigon in Indochina, reflects his complete dependence on regular receipt of this publication.

Darvas was always fearful that a vitally important cable calling for immediate action might miss him in transit. This problem was solved when he realized he could instruct his broken to send copies of a cable to both the airport at which he would be changing planes and the hotel at which he was to arrive.

An on-stop buy order cannot always be executed at one price for the entire number of shares. According to the market, the purchase is made in hundred lots at varying prices starting at or above the specified buy price.

According to this cable received at Kathmandu, Nepal, Darvas1 order for 500 parmelee transportation had been filled at two prices: 400 shares at 33½ and 100 at 33¾. The stock had closed at 34 1/8 and its range for the day was 34½-32⅝.

Darvas says that this cable is unusually intelligible compared to many of the handwritten messages he had to call for at the Indian Embassy, which had the only telegraphic link with the outside world. The day's quotes are clear enough for PARMELEE, THIOKOL, UNIVERSAL CONTROLS, FAIRCHILD CAMERA and LITTON INDUSTRIES. As for the last stock, Darvas cannot identify it now, although he must have known at the time what it was supposed to be.

Darvas first became interested in a particular stock on the basis of its movement as recorded in Barton's. Since this publica­tion took several days to reach him, he needed to be brought up to date by cable concerning the most recent activity of the stock.

It was in Hong Kong that he first noticed the unusual amount of trading in the stock of a small company, and from there he sent this cable requesting "this week's range and closing price of e. l. bruce". Little did he suspect then that his pinpointing of this stock on purely technical grounds was to result in a profit of almost $300,000?

Once the daily quotes on a stock showed Darvas that it was following the pattern his theory called for, he would generally make a small pilot buy. It was only when he actually owned shares that he could really get the "feel" of the stock's move­ments. Since his broker had blanket instructions to handle all of Darvas' on-stop orders on a good-till-cancelled basis, he often specifically placed a "day order" for a pilot buy.

These few words from New Delhi, ordering 200 shares of thiokol chemical at 47¼, were to be worth almost a million dollars. This pilot buy led to the eventual sale of Darvas' hold­ings in this one stock alone for over $1,000,000.

In this cable, Darvas also took the opportunity to raise the quantity of a universal products order, only to cancel it shortly afterwards because he felt the time wasn't ripe. Within the next four weeks he actually did purchase 3,000 shares of this stock.

The last request calls for the previous week's range of EASTERN STAINLESS STEEL.

After his pilot buy into a stock, if the price pattern he was looking for continued consistently, Darvas followed through with additional purchases.

In this cable from Kobe, Japan, he sent the third of his orders to buy another 200 shares of lorillard. Darvas' purchases into this stock formed the cornerstone of the pyramid of investments that was to grow to over $2,000,000 in the following eighteen months.

As his capital grew, so did the amount Darvas invested in any one stock once he was sure of it. After a pilot buy of 300 shares of universal products at 35¼, Darvas was well enough satis­fied with the continuing movement of this little-known stock to make a second purchase of 1,200 shares.

This cable notified him that his on-stop order had been filled at the designated price of 36½, and gave him the day's range and close for universal.

Also quoted were humble oil, eastern stainless steel, LITTON INDUSTRIES, THIOKOL and FAIRCHILD CAMERA. For the last stock, only the "28" applies. The 3.58 stands for the Dow-Jones Average of 503.58.

After Darvas had invested in a stock, he was always careful to trail his stop-loss behind the rise. The relationship between the price and his stop-loss point was a very flexible one, since it depended on many variable factors.

He was in Hong Kong at the beginning of April 1958 when he became uncomfortable about the behavior of diners’ club, which until then had been rising steadily.

With this cable he established the very close stop-loss that was to take him out of diners’ club at a substantial profit just when this stock took a sudden and drastic turn for the worse.

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