A Random Walk Down Wall Street

by Burton G Malkiel

A Random Walk down Wall Street by Burton G. Malkiel is a highly informative book about the facts of investing. As the strap phrase states, it provides a “time-tested strategy for successful investing”. It is worth noting to the investor readers at the beginning that the Random Walk quote refers to the often irrational short-term stock price changes that occur in Wall Street.

Main Message to the Stock Market Investor

The main message to the investor readers is that almost anybody can make money from the stock market, as long as you follow the guidance in this book. It also emphasises the importance of not

Other Key Investing Messages from A Random Walk Down Wall Street

A Random Walk down Wall Street gives a theoretical background on “firm foundation theory”and “castle-in-the-air-theory”. It then provides many examples of how investors often act irrationally and create market investment bubbles. The key thing for the investor is to know when to get out of the bubble.
Be wary of the numerous investor techniques that are sold to investors. The book challenges many of these theories and investment techniques. It creates some interesting investor reading for such theories as “the Super-Bowl indicator”; “January effect”; “Momentum investing”; “Dogs of the Dow” and “Hemline indicator”.
Be wary of what the numbers or people tell you. For example investors cannot tell when there has been creative accounting. There is also the risk to investors that the investment advice being provided is being produced by incompetent sources.
Fundamental investment techniques are useful, but try and also follow the approach of “don’t put all of your eggs in one basket”. In the investors world this advice can be translated to “invest in index funds” and thus spread your investment risk.

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