Hot Best Seller

A Random Walk Down Wall Street

Availability: Ready to download

Using the dot-com crash as an object lesson in how not to manage your portfolio, here is the best-selling, gimmick-free, irreverent, vastly informative guide to navigating the turbulence of the market and managing investments with confidence. A Random Walk Down Wall Street is well established as a staple of the business shelf, the first book any investor should read before Using the dot-com crash as an object lesson in how not to manage your portfolio, here is the best-selling, gimmick-free, irreverent, vastly informative guide to navigating the turbulence of the market and managing investments with confidence. A Random Walk Down Wall Street is well established as a staple of the business shelf, the first book any investor should read before taking the plunge and starting a portfolio. With its life-cycle guide to investing, it matches the needs of investors at any age bracket. Burton G. Malkiel shows how to analyze the potential returns, not only for stocks and bonds but also for the full range of investment opportunities, from money market accounts and real estate investment trusts to insurance, home ownership, and tangible assets like gold and collectibles. Whether you want to verse yourself in the ways of the market before talking to a broker or follow Malkiel's easy steps to managing your own portfolio, this book remains the best investing guide money can buy.

*advertisement

Compare

Using the dot-com crash as an object lesson in how not to manage your portfolio, here is the best-selling, gimmick-free, irreverent, vastly informative guide to navigating the turbulence of the market and managing investments with confidence. A Random Walk Down Wall Street is well established as a staple of the business shelf, the first book any investor should read before Using the dot-com crash as an object lesson in how not to manage your portfolio, here is the best-selling, gimmick-free, irreverent, vastly informative guide to navigating the turbulence of the market and managing investments with confidence. A Random Walk Down Wall Street is well established as a staple of the business shelf, the first book any investor should read before taking the plunge and starting a portfolio. With its life-cycle guide to investing, it matches the needs of investors at any age bracket. Burton G. Malkiel shows how to analyze the potential returns, not only for stocks and bonds but also for the full range of investment opportunities, from money market accounts and real estate investment trusts to insurance, home ownership, and tangible assets like gold and collectibles. Whether you want to verse yourself in the ways of the market before talking to a broker or follow Malkiel's easy steps to managing your own portfolio, this book remains the best investing guide money can buy.

30 review for A Random Walk Down Wall Street

  1. 5 out of 5

    Luca Ambrosino

    English (A Random Walk Down Wall Street) / Italiano A challenging walk around Wall Street, in different time periods that affected the American economy and consequently the World, in order to provide us the necessary elements to understand the main investment rules applied on the stock exchange. Burton G. Malkiel describes with clear examples the differences between audacious investment strategies, designed to quickly profit, and more prudent strategies that aim to increase profits in longer time English (A Random Walk Down Wall Street) / Italiano A challenging walk around Wall Street, in different time periods that affected the American economy and consequently the World, in order to provide us the necessary elements to understand the main investment rules applied on the stock exchange. Burton G. Malkiel describes with clear examples the differences between audacious investment strategies, designed to quickly profit, and more prudent strategies that aim to increase profits in longer times.Recommended for those who want an introduction to the stock market world.Vote: 7 Una stimolante “passeggiata” per Wall Street, percorrendo varie tappe temporali che hanno segnato l’economia americana in primis, e di riflesso quella mondiale, allo scopo di fornirci gli elementi necessari a comprendere le principali regole di investimento in borsa. Burton G. Malkiel descrive con chiari esempi le differenze tra strategie di investimento spregiudicate, volte a trarre profitto in tempi brevi, e strategie più prudenti che mirano ad incrementare i profitti in tempi più lunghi.Consigliato a chi vuole un introduzione sul mondo della borsa.Voto: 7

  2. 4 out of 5

    Jack

    Many years ago I bought this book about the stock market. In retrospect, it is the worst book I've ever bought because it made me believe in efficient capital markets. The author made his point with a lot of arrogance - just like finance professors did 15-20 years ago. At the time the markets very certainly not as efficient as the author believed. There have been several updates to the book, but the condescending voice of the author remains. For the statistically interested, the problem with a lo Many years ago I bought this book about the stock market. In retrospect, it is the worst book I've ever bought because it made me believe in efficient capital markets. The author made his point with a lot of arrogance - just like finance professors did 15-20 years ago. At the time the markets very certainly not as efficient as the author believed. There have been several updates to the book, but the condescending voice of the author remains. For the statistically interested, the problem with a lot of old finance (and also not so old) research was that it was testing the theory that the market was efficient. That is poor philosophy of science. You should always test the opposite of what your theory stipulates. If you can reject the opposite, your theory is as supported as it can be (standard Popper). The finance profession in their ignorance of philosophy of science tested it the other way around. This means that they could too easily conclude that the markets were efficient. Not a word about such complications in this book. Why is this relevant? I would say that the author is less critical of research that supports his preconceived opinion. I did not realise this bias when I first read the book. Instead, I believed the author's conclusion that the markets must be so efficient that it is fruitless to try to beat them. That was and is just plain silly. The markets are of course tending towards efficiency, so it is not easy to beat them. This is an important point. However, to state that they are efficient is just plain arrogant. So while there are some very good critical analyses in this book, ultimately it might make you believe in something that is very costly: That you cannot make more money in the stock market unless you are willing to take on a higher level of risk. Currently a lot of academics are questioning the efficient markets. This research is not taken seriously by the author. I am reminded of Kuhn's comment that the new paradigm only becomes prominent when the old guard dies/retires. Furthermore, a lot of people with a PhD in finance start hedge funds to exploit anomalies in the market place instead of writing academic articles. Wouldn't this be worth serious consideration by the author? Still, there is still room for other inefficiencies. For instance the role of emotions is totally disregarded by academic-finance number-crunchers. The author also has advice of how to invest. His view is to buy low-cost mutual funds. This is not awful advice, but still why would you buy mutual funds when the average fund doesn't even return average market returns? The only thing you know is that they take 1-3% in management fees every year. Do compound interest on that! In The Financial Times, the author recently argued that stocks in emerging markets are undervalued. It is hard to believe in efficient markets and write an investment column. So he just assumes (contrary to his book) that the markets are inefficient and have not priced those stocks correctly. Check out recent videos from 2011. He says that he believes in efficient markets when it comes to publicly available information. Then he proceeds to state that people in 1999 bought the wrong kind of stocks (Internet, technology), which were overvalued. Yes, I would agree those stocks were in a bubble. But honestly, then you cannot believe in efficient markets. These blaring inconsistencies are remarkable. If you have read this far and want to give me negative feedback, be my guest. I posted a version of this review on an earlier edition of the book, and the review got trashed be believers. When you get a lot of negative feedback on a negative review on amazon that tells you the author has a lot of worshippers. That should make you worried. A more rational response would be to read Justin Fox's The Myth of the Rational Market. It tells a much more nuanced narrative about the efficiency of capital markets and prominent academics role in developing ideas and theories. The style of the book is not preachy at all. His stories show academic finance to be a very dogmatic environment in the 80s and 90s. You could be called a communist by the stars in the field and have your chances of employment reduced if you didn't sign up to the belief that markets are efficient. It is all described in Fox's book. Or read Shiller's Irrational Exuberance describing how bubbles have been removed from finance textbooks and PhD syllabi because they doesn't fit with the rational actor model. He has the following to say about the efficient market hypothesis: "one of the most remarkable errors in the history of economic thought". Or read Montier's Behavioural Investing: A Practitioners Guide to Applying Behavioural Finance (The Wiley Finance Series) (or his other books) for more evidence of imperfect markets. Or read Dreman's column in Forbes magazine.

  3. 5 out of 5

    Roy Lotz

    Because I read so often, I sometimes think that once in a while I should read something that might materially benefit me. So when my brother gave me this book, I thought "why not?" and dove in. The first thing I noticed is that Malkiel is a surprisingly gifted writer. He is capable of telling a good story, he's cultured enough to make interesting references, and he has that quintessential skill of all popular writers: the ability to present ideas clearly without dumbing them down. For someone in Because I read so often, I sometimes think that once in a while I should read something that might materially benefit me. So when my brother gave me this book, I thought "why not?" and dove in. The first thing I noticed is that Malkiel is a surprisingly gifted writer. He is capable of telling a good story, he's cultured enough to make interesting references, and he has that quintessential skill of all popular writers: the ability to present ideas clearly without dumbing them down. For someone in my position—who managed to get this far in life while remaining astoundingly ignorant of these matters—I can't imagine a better introduction into the world of finance. Malkiel gives you a little history, a little theory, and a lot of practical advice. Given that I am, as aforesaid, a neophyte, I cannot give an intelligent appraisal of this book. That being said, Malkiel did manage to be very convincing. He presents anecdotal, theoretical, historical, and statistical reasons to adopt his strategies; indeed, he goes to such pains to prove his point, that it's hard not to agree with him. Of course, any person who trades actively will probably find a lot to disagree with. Particularly contentious is Malkiel's championing of the Efficient-Market Theory (EMT). As my father said to me last night, "That's crazy; the market isn't efficient—it's all mob psychology!" Malkiel does give mob psychology its due. He devotes an entire chapter to behavioral finance, and covers some of the innumerable foibles of our race when it comes to making rational decisions. In fact, it was Malkiel's effort to give the opposing views their due (minus the analysts, whom he ridicules mercilessly) which made him so convincing for me. For he is not simply an intractable proponent of EMT, heedless of all the contrary evidence. His position is more subtle: first, he holds that markets, even if they're inefficient in the short run, trend towards efficiency in the long run; second, he points out that, even if a stock might be mispriced, the financial tools available for determining if and to what extent it is mispriced are often inaccurate; and third, he points to the many practical impediments to cashing in on market inefficiencies, such as transaction fees and capital gains taxes. Of course, I doubt this book is the whole story; after all, I personally know people who made considerable money on the stock market using diametrically opposed strategies. And for a book on something which has frustrated some of the best and brightest minds, Malkiel comes across as astoundingly cocksure. So I cannot say that I am an acolyte. On the other hand, the core of Malkiel's advice—to invest in a diversified index fund, and hold onto it for a long time—strikes me as sensible (especially for someone as financially ignorant as am I). It also has a certain lazy charm. And how often do self-help books give their imprimatur to laziness?

  4. 4 out of 5

    Todd N

    From talking to friends and reading an internal financial mailing list at work I got the vague impression that this book was somehow too esoteric or controversial to bother with. I am very glad that I decided to read this book. It's hard to work in Silicon Valley without being affected by Wall Street. When I started working I was interested in technology, not business and finance. Business and finance seemed a bit beneath me. (Actually, technology seemed a bit beneath me too. I was kind of a snot From talking to friends and reading an internal financial mailing list at work I got the vague impression that this book was somehow too esoteric or controversial to bother with. I am very glad that I decided to read this book. It's hard to work in Silicon Valley without being affected by Wall Street. When I started working I was interested in technology, not business and finance. Business and finance seemed a bit beneath me. (Actually, technology seemed a bit beneath me too. I was kind of a snot in my twenties. But learning technology was directly related to my income, which forced me to pay enough attention to it to become interested.) Eventually I got to a point where I had to deal with stock options, employee stock purchase programs, lock out periods, etc. My approach to learning about this was similar to my approach to learning about technology: trial and error. Sadly this was an expensive way to learn. (One example: It cost me about $30,000 to learn the different between a market order and a limit order when selling some VRTY shares.) I have learned some definite lessons about how the stock market works, but at the cost of more money than I thought I would ever have -- let alone lose. That's why I would recommend this book to anyone who is planning to retire one day (i.e. everyone), especially people in their twenties with a vaguely technical bent. There is enough math and logic to make it interesting combined with enough plain prose and logical advice to make it important reading. If you aren't going to read it, I will summarize it here: save early and regularly, put the savings in index funds, try not to die. You can safely take out 4.5% of principal, so work backwards from that to figure out how and when to retire.

  5. 5 out of 5

    Kit Pang

    Great theories to learn!I can see why this became a classic for investors. -The Firm-Foundation Theory(Fundamental Analysis) -The Castle-in-the-Air Theory (Technical Analysis)

  6. 5 out of 5

    Sue

    We live in an age when most people have to control their own retirement destiny by making decisions about 401(k), 403(b), and IRAs. Even people with the most modest incomes are encouraged to confront that reality. Malkiel’s approach is excellent for most of us who are not into stock analysis. He gets high marks for a couple of things: (1) He proposed a market index fund before such a thing even existed. (2) He has revised his book eleven times. In other words he has some street cred. Wall Street We live in an age when most people have to control their own retirement destiny by making decisions about 401(k), 403(b), and IRAs. Even people with the most modest incomes are encouraged to confront that reality. Malkiel’s approach is excellent for most of us who are not into stock analysis. He gets high marks for a couple of things: (1) He proposed a market index fund before such a thing even existed. (2) He has revised his book eleven times. In other words he has some street cred. Wall Street cred. I read this because Jack Bogle (of Vanguard fame) recommends it as the best book to read on the subject of investment. And the real point of reading it – I wanted to see what Malkiel’s update had to say about my retirement funds in the current economic environment. At times I wondered who Malkiel was directing the book at. Some of his advice is remarkably simplistic, the kind of advice only a newbie would need. (Buy a house. Keep cash in an emergency fund.) But then section three is wonky, and he could not resist digging into the research that informs his decisions. For two-thirds of the book, I found this dichotomy annoying. Economists may like section three, but they won’t much care about section four, when the hand-holding begins. You may or may not care about the arguments over “efficient markets.” Malkiel is generally a believer but acknowledges dissenting views. Read it or not. If you’re here because you are looking for a rationale for a portfolio – one you can manage yourself – hang in there and read on. Essentially, his advice is classic for our times: build a diversified portfolio of index funds (some small caps, large caps, international, emerging economies, REITs, and bonds). If possible, start early and keep as much as you can in tax-sheltered accounts. He does not recommend buying a stock index fund and nothing else. The comments on diversifying are important. Not a radical approach. He does feel that in the middle of this decade we live in an environment that is not likely to offer large returns. So his asset allocation recommendations are the meat of his 2015 advice. Many readers may want to zoom right in on those later chapters. He has comments on the amount of risk appropriate to various situations. You won’t get rich quick following his advice, but you probably knew that. But you’ll probably face retirement with a tidy sum and a stable financial life.

  7. 4 out of 5

    Chad Warner

    Investors are bound to have heard about this classic and it’s author, economist Burton Malkiel. In this book, he explains that the market is highly efficient, and no one can accurately predict its ups and downs; it’s a “random walk”. So, the best approach is passive, “buy and hold” investing using diversified index funds held long term. I recommend this book to investors of any level, especially those attracted to active, speculative investing. The book begins with a fairly boring recount of seve Investors are bound to have heard about this classic and it’s author, economist Burton Malkiel. In this book, he explains that the market is highly efficient, and no one can accurately predict its ups and downs; it’s a “random walk”. So, the best approach is passive, “buy and hold” investing using diversified index funds held long term. I recommend this book to investors of any level, especially those attracted to active, speculative investing. The book begins with a fairly boring recount of several financial bubbles throughout history, to prove the “irrational exuberance” of investors. Malkiel shows that despite short-term trends, the market always corrects itself; “value will out”, as he puts it. Crazed investors rush into “revolutionary” new companies and technologies, but the key to investing is not how much an industry will affect society or how fast it will grow, but its ability to sustain profits. In truth, most IPOs underperform. Several investing techniques and theories are evaluated, including technical analysis, fundamental analysis, firm foundation theory, the “castle in the air” theory, efficient market theory, and modern portfolio theory. Malkiel uses the efficient market theory to explain the markets’ efficiencies, and modern portfolio theory in advising how to construct a diversified portfolio. Malkiel makes a compelling case that active investing is a losing game. Active investors generally underperform passive investors because they fail to time their purchases and sales correctly, and they incur transaction fees and taxes on their short term gains. Only 1/3 of active investors (individual traders and fund managers) beat the S&P 500 in the short term, and almost none beat it over the long term. In this section and throughout the book, Malkiel often refers to John Bogle, champion of indexing and founder of the Vanguard Group. I’m something of a Bogle disciple, and highly recommend his book The Little Book of Common Sense Investing. After providing a lot of background information, Malkiel finally gets to the part I was looking for: specific financial advice. He explains asset allocation and diversification, and how to build a portfolio based on your age and risk tolerance. I was hoping for example portfolios showing asset allocations for various age ranges, but Malkiel shies away from such detailed recommendations. For people in their 20s, like me, he suggests investing aggressively in stocks, including international and emerging markets. See my notes below for more of his advice. One of the main themes is the relationship between risk and reward. Malkiel puts it this way: you must decide whether you’d rather eat well or sleep well. Higher risk is more likely to yield higher returns, allowing you to eat well, but the stress may cost you your sleep. Only you know the risk you’re willing to take for the potential reward. The book ends with an explanation of hedging with derivatives such as futures, put options, and call options. I didn’t pay much attention, and plan to stick with his simpler advice on diversified indexing. Notes Ignore short term volatility; buy and hold for the long term. It’s financially wise to own your home. It’s an inflation hedge, provides tax breaks, and forces saving. The market trends upward, so it’s better to invest a lump sum today than to dollar cost average. For investors without lump sums, however, dollar cost averaging is the most common and reasonable approach. Save for financial goals using vehicles that mature at the goal date (CDs, treasuries, bonds, etc.). Portfolio construction Diversify to reduce risk. Choose assets with low or no correlation. Include US stocks, international stocks, emerging market stocks, REITs, bonds, TIPs, and cash. Hold bonds and bond funds in tax sheltered accounts. Small cap stocks tend to outperform large cap. This may be due to higher risk, or survivorship bias. Value stocks tend to outperform growth, because investors tend to overpay for growth. REITs add diversity and have returns similar to stocks. They also provide an inflation hedge. Selecting funds Choose no load, total stock market index funds. If you buy active funds, choose no load, low turnover, low expense funds with little unrealized appreciation. Look for expense ratios less than 0.5% and turnover less than 50%.

  8. 5 out of 5

    Scott

    Malkiel's been writing and rewriting this classic tome on investing for the last thirty-five years. I gave him 5 stars for being fully engaged in the process of revision. Sometimes I wish all authors would write (and rewrite) just one good book (and that actors would star in only one movie). But that's like asking investors to put their money in just a few low-cost funds and hold it there for decades ... hey, that's what Malkiel's talking about! So it's not the most exciting approach to investin Malkiel's been writing and rewriting this classic tome on investing for the last thirty-five years. I gave him 5 stars for being fully engaged in the process of revision. Sometimes I wish all authors would write (and rewrite) just one good book (and that actors would star in only one movie). But that's like asking investors to put their money in just a few low-cost funds and hold it there for decades ... hey, that's what Malkiel's talking about! So it's not the most exciting approach to investing; but it will, in the long run, turn out to be the most rewarding. This newly rewritten version of Malkiel's classic Random Walk ... (first published in 1973 but essentially rewritten at least four or five times since) argues that the best way to make money on Wall Street is to build a diversified portfolio of index funds (some small caps, large caps, emerging economies, REITs, and bonds) and hold on to them for a long, long time in a tax advantaged account. He advises you how to adjust your asset allocation according to your age or point in life, and he even allows you to pick a few stocks for minor investments just for fun and to help you stay interested in the market. Preliminary chapters recount bubbles past (where would historical economics be without 17th-century Holland's fascination with tulips?). The middle sections debunk dubious investment strategies based in everything from hemlines to super bowls and stresses the importance of sheer, random luck in choosing profitable stocks. Part Three looks at modern investment theories (if you don't have a background in economics, you might want to skim some of this part). The final section details Malkiel's guide to personal finance and investing. If you are curious about how men and women have invested their money over the past 500 years, or how common investment strategies work (and don't work in the long run), or how to make the most of your investments over decades, Malkiel's Random Walk ... will prove to be an engaging, even entertaining read that like most classics can hold up to many re-readings. You certainly won't get rich quick following Malkiel's advice, but you probably will find yourself in a fairly stable financial state in twenty or thirty years.

  9. 5 out of 5

    Jerry Kaczmarowski

    This is probably the best book ever written on the investment side of personal finances. It goes into extensive detail as to why you should strongly consider index funds or ETFs rather than mutual funds, individual stocks, or help from a personal financial adviser. All 3 of these last alternatives come with a load in terms of either your time or money (or both). First, Mutual funds are managed and rarely outperform the market. For this lack of performance, you get to give away a percentage each This is probably the best book ever written on the investment side of personal finances. It goes into extensive detail as to why you should strongly consider index funds or ETFs rather than mutual funds, individual stocks, or help from a personal financial adviser. All 3 of these last alternatives come with a load in terms of either your time or money (or both). First, Mutual funds are managed and rarely outperform the market. For this lack of performance, you get to give away a percentage each year for the management fees. Note that these fees apply whether the mutual fund goes up or down. Second, individual stocks are hard to pick without investing a serious amount of time. I also find that EVERYONE (myself included) only track the stocks where they did well. We all have a collective mental block that prevents us from remembering the stinkers that lost money for us. When you add the wins and losses together, I've never been able to beat the market. Note that whenever I've bothered to press someone who tells me they have, it turns out they haven't...again, it's that darn mental block thing. Third, and worst of all, you could go with a personal financial adviser. As a group, they woefully under perform vis-a-vis the market. They charge you for this failure. Note that if you have done zero reading on investing, they can give you guidance on things like balancing asset classes, but you can figure this out for yourself in about two hours. The only potentially negative thing I would say about this book is that it is very long. It goes into detailed explanations to get to the punchline regarding index funds and ETFs. I love this kind of detail, because I've always been fascinated by investing. However, if this is a dry topic for you, you should consider reading "The Smartest Investment Book You'll Ever Read." It is very short and doesn't support its central premise as well as "A Random Walk...". However, it gets to the same conclusion faster. Happy investing!

  10. 4 out of 5

    Ami Iida

    It is one of the book that gave the most influence in my life. I apply that approach the (index funds) to the Nikkei Stock Average and the Dow Jones industrial average stock price. I have already read the book several times by overlapping edition. I carry out the index funds . Periodically I buy it Practice is important!!!!!!!!!!!!!!!!!!! ---------- it probability distribution manner to distribute the investment in each month This is the right decision. the book is worthy of reading repeat and then You It is one of the book that gave the most influence in my life. I apply that approach the (index funds) to the Nikkei Stock Average and the Dow Jones industrial average stock price. I have already read the book several times by overlapping edition. I carry out the index funds . Periodically I buy it Practice is important!!!!!!!!!!!!!!!!!!! ---------- it probability distribution manner to distribute the investment in each month This is the right decision. the book is worthy of reading repeat and then You must carry out the finance of index fund. This book is an index fund This is the Bible of investment I buy the Nikkei Stock Average and the Dow Jones industrial average stock price by applying this document Dollar cost method is the basic investment Monthly distribution method to disperse the risk It uses a probability distribution

  11. 4 out of 5

    Martin Georgiev

    An absolutely amazing book going through the essentials of investing and the financial market. There is so much useful information digested for the common folk which I have been looking for in various other titles without success. The author occasionally exaggerates and gives extreme examples to put emphasis on his points which can be a bit annoying at times. I also regret reading a quite old version of the book which has been published right before the economic crisis of 2008. I would say its a An absolutely amazing book going through the essentials of investing and the financial market. There is so much useful information digested for the common folk which I have been looking for in various other titles without success. The author occasionally exaggerates and gives extreme examples to put emphasis on his points which can be a bit annoying at times. I also regret reading a quite old version of the book which has been published right before the economic crisis of 2008. I would say its a must read for anyone interested in investing and would especially recommend it to beginners like myself.

  12. 5 out of 5

    Gwern

    It's hard to believe at this point that Malkiel's views on the desirability of indexing and not trading and the basic truth of the efficient market hypothesis were ever controversial or not conventional wisdom (the 1 and 2 star reviews here notwithstanding... how many geniuses like Peter Thiel blew up betting against Treasuries in the past few years, guys? Efficient markets FTW.), but nevertheless, he was a pioneer. I didn't wind up learning too much from this since it's targeted at beginners, b It's hard to believe at this point that Malkiel's views on the desirability of indexing and not trading and the basic truth of the efficient market hypothesis were ever controversial or not conventional wisdom (the 1 and 2 star reviews here notwithstanding... how many geniuses like Peter Thiel blew up betting against Treasuries in the past few years, guys? Efficient markets FTW.), but nevertheless, he was a pioneer. I didn't wind up learning too much from this since it's targeted at beginners, but that is not its fault and the advice is generally sound.

  13. 5 out of 5

    Saeed

    Thank you, Burton, for writing this masterpiece. I always have fear of reading this book because I thought it would be a tough one to read but now I am saying that this book is easy reading with much fun and I am very appreciated for Malkiel's great style of writing. Great lifetime investing advice, fabulous wisdom and a complete book for Americans but As an Iranian person, I am saying It helped me to think sharp and by every piece of my heart I am saying that I am owing you, Burton G. Malkiel : Thank you, Burton, for writing this masterpiece. I always have fear of reading this book because I thought it would be a tough one to read but now I am saying that this book is easy reading with much fun and I am very appreciated for Malkiel's great style of writing. Great lifetime investing advice, fabulous wisdom and a complete book for Americans but As an Iranian person, I am saying It helped me to think sharp and by every piece of my heart I am saying that I am owing you, Burton G. Malkiel :)

  14. 4 out of 5

    Thijs Niks

    Ok overview of why active investing doesn’t work. Mediocre overview of why passive investing works.

  15. 4 out of 5

    Leonard

    A common sense approach to investing. No hypes.

  16. 5 out of 5

    Toe

    Burton Malkiel's "A Random Walk Down Wall Street" is the book that popularized passive investing. As a Princeton professor and board member of the Vanguard Group, Malkiel brought the practical implications of the efficient market hypothesis to the general investing public. The ideas in this book are now so ubiquitously accepted, that I actually learned very little new information. However, I am pleased to have experienced the original source of this powerfully simple yet effective investment phi Burton Malkiel's "A Random Walk Down Wall Street" is the book that popularized passive investing. As a Princeton professor and board member of the Vanguard Group, Malkiel brought the practical implications of the efficient market hypothesis to the general investing public. The ideas in this book are now so ubiquitously accepted, that I actually learned very little new information. However, I am pleased to have experienced the original source of this powerfully simple yet effective investment philosophy. To be clear, many academics, most notably Eugene Fama, contributed to the intellectual framework by providing the theory, data, and studies. John Bogle allowed the masses to take advantage of this theory by creating the Vanguard Group. Malkiel popularized the idea with this book. The efficient market hypothesis states that the stock market accurately reflects all available information in current prices such that no individual investor can consistently earn extraordinary returns. If there were such a gauranteed method, other smart investors chasing similar profits would soon make the endeavor unprofitable. In fact, Malkiel and others say that price movements are random or without discernible pattern. The randomness comes in the form of new information, which, by definition, is random. A product's success or failure, an airliner crashing, the result of a court case, and countless other factors that impact companies constitute the news. However, this news is never perfectly foreseeable, and predictions are already factored into the price of the stock. For example, when ConocoPhillips wrote off over $30 billion in goodwill during the 4th quarter of 2008, the stock price did not tumble greatly. The news had already been incorporated. This idea is proven most easily by the fact that 80% of fund managers fail to beat the market (usually an index fund they use as a target). This is because actively managed funds charge high fees and generate many more trades which must be taxed. Additionally, the 20% who do beat the market in any given year fail to reliably do so the following years. Therefore, it makes sense to mimic the market as cheaply as possible to ensure the highest possible return. Again, this does not mean that people can consistently earn abnormal rates of return. Even recognizing a bubble during the bubble (a difficult task in itself) does not ensure success. Shorting a stock too early or a tulip in Holland could prove disasterous if the bubble continues to expand. Also, recognizing consistent patterns such as the January effect does not mean they can be profitably exploited. Transaction costs often prevent exploiting differences from being worthwhile. An interesting aspect not addressed by Malkiel in this edition is the ever decreasing cost of buying and selling securities. Zecco.com now allows free trade if you meet certain requirements. My theory is that as transaction costs diminish, so will the perceived "inefficiencies". Interesting tidbits: The Indian who sold Manhattan Island for $24 in 1626 would have more than $50 billion if he invested it at 6% interest compounded semiannually. Neither technical analysis (following past stock prices through charts) nor fundamental analysis (predicting future earnings based on assumptions and guesses) have proven to consistently beat the market. Malkiel still prefers fundamental analysis to the chartists who ignore ALL information about the stock other than the past prices. Diversification ceases to add additional benefits after 20 stocks or so; a portfolio of 20 stocks is as no more or less risky than a portfolio of 1000 stocks. These benefits come in the form of lower risk or volatility and more consistent returns. Index funds are generally well diversified, which is yet another reason to buy them. Diversification is the meat behind Modern Portfolio Theory, invented in the 1950s by Harry Markowitz of the University of Chicago who won the Nobel Price in Economics for his work. Diversification can be achieved through asset classes (real estate vs stocks vs bonds), company size (small, mid, and large cap), geography (U.S. vs Europe vs Asia), and other ways. Bond investors got hammered from 1969 through 1981 because of an 8% rate of inflation, which was higher than their returns on the bonds. Additionally, despite real negative rates of return (loss of purchasing power) the bond holders had to pay regular income tax rates on their coupons. They were literally paying money on top of subsidizing the borrowers--a double whammy. Government inflationary and tax policy harmed a lot of people financially. Dollar-cost averaging has benefits when done in a 401k plan with money yet to be earned. But, because stock prices tend to rise over time, it is better to put large lump sums such as inheritances or lottery winnings into the market relatively quickly. Memorable quotes: "[Compound interest is:] the greatest mathematical discovery of all time." - Albert Einstein "Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." - Charles Dickens, "David Copperfield" "Patience is a necessary ingredient of genius." - Disraeli "No scientific evidence has yet been assembled to indicate that the investment performance of professionally managed portfolios as a group has been any better than that of randomly selected portfolios." - Burton Malkiel

  17. 4 out of 5

    Dan Riaz

    This is a great read for anyone who wants to learn more about investing, the financial markets, how the stock markets work or even the private sector in general. While the book is over 400 pages, Burton Malkiel is entertaining in his approach, and his arguments / explanations are incredibly easy to follow. This book is aimed at the individual investor, and he makes a good amount of effort to make sure his knowledge is accessible to all. That said, there is a lot here, everything from the historic This is a great read for anyone who wants to learn more about investing, the financial markets, how the stock markets work or even the private sector in general. While the book is over 400 pages, Burton Malkiel is entertaining in his approach, and his arguments / explanations are incredibly easy to follow. This book is aimed at the individual investor, and he makes a good amount of effort to make sure his knowledge is accessible to all. That said, there is a lot here, everything from the historical performance of IPOs to security analysis to behavioral finance and what drives the appreciation of the stock market as a whole. In this sense, this is a great read to get a better understanding of the private sector in general, I would recommend a copy to any college student or new grad. He is critical of the financial services industry and active management. He's spent a career in both Wall Street and Academia and has come to the conclusion that indexing is the best approach for individual investors. That is the main thesis of the book, and that is what he spends the majority of time arguing with numerous studies and empirical data to back him up. Of course, I did come away with some criticisms. While he emphasizes international markets and the need for global diversification, I did come away with the impression that he is a little too optimistic on the future outlook of the U.S. market. He utilizes the random walk hypothesis (past performance doesn't predict the future) to debunk the predictability of returns across individual securities and mutual funds, but then uses historical stock market returns to advocate a core investment allocation to U.S. common stocks...disregarding the fact that U.S. GDP growth in the future may be far lower than what it was during the 20th century when we had a faster growing population and saw larger productivity gains amongst our workforce. I can sympathize with his rationale for simplification. But I am not 100% bought in to the thesis that U.S. equity (and the economy at large) will save all of us in the future. Rather, betting huge on U.S. equity just seems like the best advice given what we currently know about an extremely uncertain world.

  18. 5 out of 5

    Marshall

    This is my favorite book on investing. I would recommend it to anyone interested in learning about investing. It's very easy to read, and sometimes even reads like a story, and yet still manages to cover all the details. This is an impressive feat, considering that every other decent investing book I've found is a snoozer. I've found books that are easy to read, but they're only easy because they're simplistic. Add to that the tons of misinformation out there, telling you how you can "beat the m This is my favorite book on investing. I would recommend it to anyone interested in learning about investing. It's very easy to read, and sometimes even reads like a story, and yet still manages to cover all the details. This is an impressive feat, considering that every other decent investing book I've found is a snoozer. I've found books that are easy to read, but they're only easy because they're simplistic. Add to that the tons of misinformation out there, telling you how you can "beat the market." This book is different. It's crammed with a ton of data, but finds a way to make it interesting. It doesn't slack off on the challenging stuff. It just presents it in a readable way. Funny stories, metaphors, quotes of philosophers, history lessons, and even comic strips are tied in neatly to help support the subject matter, without distracting from it. Originally written in 1973, this book popularized the "efficient market hypothesis" and passive investing, and helped spawn the index fund industry. The data shows that most actively managed mutual funds perform worse than random selections of stocks. Since mutual funds have management fees and are tax-inefficient, you're better off just investing in the market as a whole rather than paying fund managers to pick stocks. The evidence for this is presented in part two. Part one is an overview, and a fascinating history of speculative crazes. Part three describes Modern Portfolio Theory, efficient market theory, behavioral finance, and risk measurement, which form the basis for his recommended approach to investing. Part four is a practical guide, a tutorial on how to invest wisely. So if you've been wanting to learn about investing, to really understand it, invest in A Random Walk Down Wall Street. This is the real deal. It's not a sales pitch, a get rich quick scheme, or "Investing For Dummies." You'll learn a lot, and you'll have fun along the way!

  19. 5 out of 5

    Vincent Li

    A pretty good read for what it's worth. A good primer into basic finance. Personally, it was a good review of finance 101, with a pretty solid explanation of modern portfolio theory, and CAPM. Book seems timely, updated to include a large section on speculative bubbles, and even includes a chapter on behavioral economics. Includes a brief section on the 2008 financial crisis (kind of the standard narrative). It discusses the two competing views of stock prices, which is basically the fundamental A pretty good read for what it's worth. A good primer into basic finance. Personally, it was a good review of finance 101, with a pretty solid explanation of modern portfolio theory, and CAPM. Book seems timely, updated to include a large section on speculative bubbles, and even includes a chapter on behavioral economics. Includes a brief section on the 2008 financial crisis (kind of the standard narrative). It discusses the two competing views of stock prices, which is basically the fundamentalist discount model and technicalist beauty contest. Surprisingly, the review of the literature was quite broad, going from historical economists debating over tulip mania to Fama's work on beta (that beta against the S&P 500 is predictive of returns). Personally, I thought the most interesting thing was the discussion of Fama-French factors (beta, small firms, value) and the idea of seeing P/E ratios as a certain premium. The book is famous for introducing efficient market theory (strong, semi-strong and weak forms) to the general public. It argues through some pretty copious evidence that it is hard to beat the market consistently either through fundamentals or technicals. Malkiel shows how the market has outperformed in the long run even professionals, and so advises buying and holding a broadly diversified index as the main component of a portfolio. The book argues that the fees taken by active managers, along with transaction costs and taxes wipe out any extra return if there is any. Filled with practical advice (life cycle investing, holding more bonds to stocks as you get older), and the standard lessons of finance. A quick and easy read, recommended for beginners or to refresh one's memory.

  20. 5 out of 5

    Jason

    As a college graduate with a child's understanding of economics and personal finance, Malkiel's guide was invaluable in understanding how the market works, tips on how to manage money, and his succinct yet rigorous and clear treatment of various investing strategies. I now have a much stronger grasp on how to invest and manage my finances as I enter post-graduate life. Pros: - An easy and mostly accessible read for those with almost 0 knowledge of economics or finance. Some economic and finance te As a college graduate with a child's understanding of economics and personal finance, Malkiel's guide was invaluable in understanding how the market works, tips on how to manage money, and his succinct yet rigorous and clear treatment of various investing strategies. I now have a much stronger grasp on how to invest and manage my finances as I enter post-graduate life. Pros: - An easy and mostly accessible read for those with almost 0 knowledge of economics or finance. Some economic and finance terms are assumed to be known such as what stocks, bonds are but definitions are easily found online. - Statements and recommendations are always backed by academic results or stock market historical accounts. - Final section gives a comprehensive guide on how one should invest and manage finances at every stage of their lives (from early 20's to retirement) with a lengthy appendix giving more resources of finding the next steps after finishing the book. Cons: - Several terms are undefined and assumed to be known to the reader. - One who only wants guidelines on how to invest may skip 3/4 of the book and only read the guide on how invest in the last section and should in theory be perfectly fine. This may not be a con but was not the expectation I had going into the book when the first 3/4 were dedicated to a historical analysis of the stock market and comparison of different inferior investing strategies before only offering one strategy to follow.

  21. 5 out of 5

    Louis

    I was already sold on Malkiel's approach to the stock market before I even picked this book up -- I'm a big supporter of Wealthfront, the investment platform for which Malkiel serves as CIO -- but it was a valuable exercise to understand his reasoning in greater detail. A good representative quote: The record of professionals does not suggest that sufficient predictability exists in the stock market or that there are enough recognizable irrationalities to produce exploitable opportunities to earn I was already sold on Malkiel's approach to the stock market before I even picked this book up -- I'm a big supporter of Wealthfront, the investment platform for which Malkiel serves as CIO -- but it was a valuable exercise to understand his reasoning in greater detail. A good representative quote: The record of professionals does not suggest that sufficient predictability exists in the stock market or that there are enough recognizable irrationalities to produce exploitable opportunities to earn excess returns over the market average. In other words: if someone tells you they have a strategy that they can reliably expect to beat the market (i.e. outperform the returns that would be earned by a well-diversified portfolio, for a given level of risk), they're almost certainly either lying or delusional. If you're paying someone 1 or 2 percent a year to manage your investments, you're throwing away money. I particularly enjoyed Chapter 11, "Potshots at the efficient-market theory and why they miss," in which he rebuts standard criticisms of his theory. Some of the later chapters are painfully dull, but on the whole Malkiel manages to write remarkably engaging prose on a subject that's usually anything but.

  22. 4 out of 5

    Haydngoseek

    This is a grade on a curve. This book is a far more robust reference on investing than Dave Ramsey's advice. (Props to Dave for helping lots of people get out of debt though.) However, if you're reading this book, you're probably not really in the market for Dave Ramsey, and vice versa. Investing has moved on since Malkiel wrote this book, and a lot of his thoughts and information are outdated. There's just better research - Bogle, Kitces, Wade Pfau, Larry Swedroe, et al have advanced the indexin This is a grade on a curve. This book is a far more robust reference on investing than Dave Ramsey's advice. (Props to Dave for helping lots of people get out of debt though.) However, if you're reading this book, you're probably not really in the market for Dave Ramsey, and vice versa. Investing has moved on since Malkiel wrote this book, and a lot of his thoughts and information are outdated. There's just better research - Bogle, Kitces, Wade Pfau, Larry Swedroe, et al have advanced the indexing field dramatically. They have more and better data to back up their arguments, and they offer refinements that Malkiel simply doesn't address. Malkiel's advice is generally sound, but he can't suppress the urge to equip people with just enough knowledge to get themselves into trouble picking stocks - even as he tells them not to do so. Plus, Malkiel is not an especially engaging writer. There are simply better choices for personal finance enthusiasts, and novices are best going in an entirely different direction.

  23. 5 out of 5

    Tom

    This review has been hidden because it contains spoilers. To view it, click here. This is a great read that explains all of the core concepts related to Wall Street and financial investment, and takes the time to explain the historical significance of them as well. Malkiel discusses valuation (firm foundation vs. castle in the air), technical (charting) and fundamental analysis on his way to modern portfolio theory and behavioral finance. He stops to debunk theories that would deny the efficient-market theory, and then launches into some great practical advice for the investo This is a great read that explains all of the core concepts related to Wall Street and financial investment, and takes the time to explain the historical significance of them as well. Malkiel discusses valuation (firm foundation vs. castle in the air), technical (charting) and fundamental analysis on his way to modern portfolio theory and behavioral finance. He stops to debunk theories that would deny the efficient-market theory, and then launches into some great practical advice for the investor. Besides strongly encouraging investing in index funds as a way to minimize risk, he suggests looking into closed-end funds when offered at a large enough discount from the net asset value. A guide to mutual funds and a primer on derivatives round out the book. If you didn't understand some of the above, you should definitely read the book, as I didn't understand a good deal of it before I started. I highly recommend this to all new investors as a solid, no frills investment tutorial.

  24. 4 out of 5

    Paul DeBusschere

    Malkiel's book is just a repackaged version of the same garbage investment firms have fed to the public for years. If the last decade-plus has proved anything, it's that one cannot expect to succeed as an investor by placing your investments on auto-pilot. Following Malkiel's strategy of buying and holding index funds (and not reacting to market conditions), an investor would have reaped negative returns when inflation is factored in. I've read more than a few books on investing and trading. Malk Malkiel's book is just a repackaged version of the same garbage investment firms have fed to the public for years. If the last decade-plus has proved anything, it's that one cannot expect to succeed as an investor by placing your investments on auto-pilot. Following Malkiel's strategy of buying and holding index funds (and not reacting to market conditions), an investor would have reaped negative returns when inflation is factored in. I've read more than a few books on investing and trading. Malkiel's theory is just that. Real world success in the markets requires diligence, discipline, and study that most investors either can't or won't put in. Investment houses encourage this type of behavior because it works in their favor - they make money whether investors win or lose. There is no automatic path to stock market riches. Readers should read Malkiel's book with this fact in mind and gird themselves to actively manage their holdings.

  25. 5 out of 5

    Brian

    Good introduction to personal finance. For some reason does expect some familiarity with bonds (especially relationship between price, YTM, face value etc.). Argues very persuasively that broad index funds with low fees is best investment around. Gives some advice on individual stock picking, but recommends that it is done with small percentage of portfolio and undertaken with the understanding that it is more fun than profitable...Introduction to basic options trading, hedging strategies. Recom Good introduction to personal finance. For some reason does expect some familiarity with bonds (especially relationship between price, YTM, face value etc.). Argues very persuasively that broad index funds with low fees is best investment around. Gives some advice on individual stock picking, but recommends that it is done with small percentage of portfolio and undertaken with the understanding that it is more fun than profitable...Introduction to basic options trading, hedging strategies. Recommend for people wanting to "get started" or who are reckless daytrader hopefuls.

  26. 5 out of 5

    Jono

    Very thorough treatment of the case for long-term index investing. Most of the book is summed up in the first page of the preface. "Investors would be far better off buying and holding an index fund than attempting to buy and sell individual securities or actively managed mutual funds." There's not much more to it. The rest is a generally readable and informative background and support for this theory, plus a lot of good general investing understanding. I feel more informed after reading this.

  27. 4 out of 5

    Peter Mcloughlin

    Fairly good guide to the stock market for a lay person and a good introduction to the Efficient Market Hypothesis which has been under some scrutiny since the last financial crisis and challenged by the new field of behavioral economics which analyzes our less than rational actions in the marketplace. Very fun and the bottom line advice for those who want to beat the market is don't try. Get a diversified portfolio of index funds and hold onto them for a good while and you'll do about as well as Fairly good guide to the stock market for a lay person and a good introduction to the Efficient Market Hypothesis which has been under some scrutiny since the last financial crisis and challenged by the new field of behavioral economics which analyzes our less than rational actions in the marketplace. Very fun and the bottom line advice for those who want to beat the market is don't try. Get a diversified portfolio of index funds and hold onto them for a good while and you'll do about as well as the market which for most of us is good enough.

  28. 4 out of 5

    Christopher Luc

    Good history of the stock market, talks about the bull and bear markets of the past few hundred years and provides fundamental analysis and explores various trading and investing techniques used. The book explains meticulously and thoroughly about different investment tools and techniques for the average investor. It's a good read for the experienced investors that provides more theory and insight from a very experience investor and fund manager.

  29. 4 out of 5

    Luke Masia

    Good in the beginning when it talked about the past and gave factual information. Later on it got very subjective and I really disliked his ignorance to the point where I skipped multiple sections where he insulted other investment strategies.

  30. 5 out of 5

    Steven Ure

    Best finance/investing I've ever read. This book offers no get-rich schemes, it simply informs you about investments that are the least risky and offer stable returns. What more could you ask? Remember that scene from The Graduate? Well, don't invest in plastics. Invest in Index Funds. Simple.

Add a review

Your email address will not be published. Required fields are marked *

Loading...
We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy.