A random walk down Wall Street- 11th edition pdf by Burton Malkiel (2014)- ( The Time-Tested Strategy for Successful Investing)- This edition takes a hard look at the basic thesis of earlier editions of Random Walk—that the market prices stocks so efficiently that a blindfolded chimpanzee throwing darts at the stock listings can select a portfolio that performs as well as those managed by the experts. The book remains fundamentally a readable investment guide for individual investors.
Author: Burton Malkiel
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IT HAS NOW been over forty years since the first edition of A Random Walk Down Wall Street. The message of the original edition was a very simple one: 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. I boldly stated that buying and holding all the stocks in a broad stockmarket average was likely to outperform professionally managed funds whose
high expense charges and large trading costs detract substantially from investment returns.
This eleventh edition also provides a clear and easily accessible description of the academic advances in investment theory and practice. Chapter 10 describes the exciting new field of behavioral finance and underscores the important
lessons investors should learn from the insights of the behavioralists. Chapter 11 asks whether “smart beta” investment strategies are really smart. In addition, a new section has been added to present practical investment strategies for investors who have retired or are about to retire. So much new material has been added over the years that readers who may have read an earlier edition of this book in college or business school will find this new edition rewarding reading.
This edition takes a hard look at the basic thesis of earlier editions of Random Walk—that the market prices stocks so efficiently that a blindfolded chimpanzee throwing darts at the stock listings can select a portfolio that performs as well as those managed by the experts. Through the past forty years, that thesis has held up remarkably well. More than two-thirds of professional portfolio managers have been outperformed by unmanaged broad-based index funds. Nevertheless, there are still both academics and practitioners who doubt the validity of the theory. And the stock-market crash of October 1987, the Internet bubble, and the financial crisis of 2008–09 raised further questions concerning the vaunted efficiency of the market. This edition explains the recent controversy and reexamines the claim that it’s possible to “beat the market.” I conclude that reports of the death of the efficient-market hypothesis are vastly exaggerated. I will, however, review the evidence on a number of techniques of stock selection that are believed to tilt the odds of success in favor of the individual investor.
A random walk down Wall Street- 11th edition pdf remains fundamentally a readable investment guide for individual investors. As I have counseled individuals and families about financial strategy, it has become increasingly clear to me that one’s capacity for risk-bearing depends importantly upon one’s age and ability to earn income from noninvestment sources. It is also the case that the risk involved in many investments decreases with the length of time the investment can be held. For
these reasons, optimal investment strategies must be age-related. Chapter 14, entitled “A Life-Cycle Guide to Investing,” should prove very helpful to people of all ages. This chapter alone is worth the cost of a high-priced appointment with a personal financial adviser.
Table Contents- A random walk down Wall Street- 11th edition pdf
Part One: STOCKS AND THEIR VALUE
1. FIRM FOUNDATIONS AND CASTLES IN THE AIR
2. THE MADNESS OF CROWDS
3. SPECULATIVE BUBBLES FROM THE SIXTIES INTO THE NINETIES
4. THE EXPLOSIVE BUBBLES OF THE EARLY 2000s
Part Two: HOW THE PROS PLAY THE BIGGEST GAME IN TOWN
5. TECHNICAL AND FUNDAMENTAL ANALYSIS
6. TECHNICAL ANALYSIS AND THE RANDOM-WALK THEORY
7. HOW GOOD IS FUNDAMENTAL ANALYSIS? THE EFFICIENT-MARKET HYPOTHESIS
Part Three: THE NEW INVESTMENT TECHNOLOGY
8. A NEW WALKING SHOE: MODERN PORTFOLIO THEORY
9. REAPING REWARD BY INCREASING RISK
10. BEHAVIORAL FINANCE
11. IS “SMART BETA” REALLY SMART?
Part Four: A PRACTICAL GUIDE FOR RANDOM WALKERS AND OTHER INVESTORS
12. A FITNESS MANUAL FOR RANDOM WALKERS AND OTHER INVESTORS
13. HANDICAPPING THE FINANCIAL RACE: A PRIMER IN UNDERSTANDING AND PROJECTING RETURNS FROM STOCKS AND BONDS
14. A LIFE-CYCLE GUIDE TO INVESTING
15. THREE GIANT STEPS DOWN WALL STREET
About the author
Burton Malkiel (born August 28, 1932) is an American economist and writer, most famous for his classic finance book A Random Walk Down Wall Street (first published 1973, in its 12th edition as of 2019). He is a leading proponent of the efficient-market hypothesis, which contends that prices of publicly traded assets reflect all publicly available information, although he has also pointed out that some markets are evidently inefficient, exhibiting signs of non-random walk
Malkiel is the Chemical Bank chairman’s professor of economics at Princeton University, and is a two-time chairman of the economics department there. He served as a member of the Council of Economic Advisers (1975–1977), president of the American Finance Association (1978), and dean of the Yale School of Management (1981–1988). He also spent 28 years as a director of the Vanguard Group. He currently serves as Chief Investment Officer to software-based financial advisor, Wealthfront Inc. and as a member of the Investment Advisory Board for Rebalance.
Malkiel in general supports buying and holding index funds as the most effective portfolio-management strategy, but does think it is viable to actively manage “around the edges” of such a portfolio, as financial markets are not totally efficient. In a 2020 interview, Malkiel also stated he was not opposed in principle to investing or trading in single stocks (as exemplified by the popularity of Robinhood or Wealthfront), provided the large majority of one’s portfolio is index funds.
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