My Review 5/5

Great book that details the various methods of investing and how they fail to live up to current efficient market hypothesis.

I loved the stories sprinkled into the book, a great update of Business Adventures and gives you a practical assessment of what to do with you wealth once you’ve amassed it. See The Millionaire Next Door. This edition was published in 2006. In the appendix he gives dire warnings about derivative products but mentions that total collapse of the market is not possible. It would be interesting to hear his take on the 2008 financial market collapse of AIG and Lehman Brothers.

First, charting and predicting the market based on sentiment cannot yield gains to cover transactions costs. Timing the market would mean you have to be right on the few bullish days to capture the majority of returns.

Two theories, castle in the sky (earnings are yet to come) and fundamental analysis (existing earnings) still fall short of a buy and hold security practice. Ultimately part three details the modern portfolio theory. Final verdict, keep 95% of your savings in buckets of index funds. Say S&P 500, Russell 2000, bonds and TIPPS. Re-balance annually and profit at the rate of average growth.

In addition to looking at speculative bubbles over the centuries this book gives a great history of the invention of financial products and the speculators who’ve gone bust seeking profits.

Date Read

2016/12/13

Date Added

2016/11/22

Goodreads book information

A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton G. Malkiel

https://www.goodreads.com/book/show/10539360

Bookshelves: business, read-again

Author’s Note

Initial md Generated using https://github.com/jsr6720/goodreads-csv-to-md

Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Kerin McCue Recorded Books 2008 (Audio CD)1

Significant revisions

tags: 2016, book, review, Malkiel, business, read-again

  • Apr 22nd, 2024 Converted to jekyll markdown format and copied to personal site
  • Dec 13th, 2016 Originally published on goodreads

EOF/Footnotes

  1. ISBN: =”1436105277” ↩