A Random Walk Down Wall Street: The Best Investment Guide That Money Can Buy (Thirteenth) by Burton G. Malkiel (PDF)

Description

One of the “few great investment books” (Andrew Tobias) ever written, with 2 million copies in print.In a time of rampant misinformation about ways of growing your money, Burton G. Malkiel’s gimmick-free investment guide is more necessary than ever. Whether you’re considering your first 401k contribution or contemplating retirement, the fully updated, fiftieth anniversary edition of A Random Walk Down Wall Street remains the best investment guide money can buy.Drawing on his experience as an economist, financial adviser, and successful investor, Malkiel shows why an individual who saves consistently over time and buys a diversified set of index funds can achieve above-average investment results. He addresses current investment fads and critically analyzes cryptocurrencies, NFTs, and meme stocks. Malkiel reveals how to be a tax smart investor and how to make sense of recently popular investment management techniques, including factor investing, risk parity, and ESG portfolios.Investors of every age, experience level, and risk tolerance will find the step-by-step guidance they need to protect and grow their dollars.

User’s Reviews

Reviews from Amazon users which were colected at the time this book was published on the website:

⭐This is the best book available for investors. It is surprising that the for-profit investing industry has notsuccessfully prevented the low-cost index philosophy to be widely disseminated; after all these years theindex investment industry is slowly overtaking active investment. This is a long book with a simple message; I think the purpose of most of the book is to describe the weakness of active investing, to justify the value of passive investing.It’s not perfect. Although it does a good job clarifying to the novice the exact meaning of many of the investment terms, even more clarification is needed. The author should ask his mailman to review the book.I was initially misled by the graph on page 402. The author’s effort to emphasize the value of re-balancinghas motivated him to provide an example of a very unusual 10-year period where the return on a diversified re-balanced portfolio was greater than 100% VTSAX. (For the rare individuals with both wealth and a long time horizon, 100% VTSAX will provide the highest return).

⭐This is a wonderful book. It is very readable and very informative.

⭐I think it is a good book

⭐One of the best investing books ever written.

⭐Why does this book need to be constantly updated? All I can tell is that Malkiel says “Buy index funds/ETFs and hold them, because YOU can’t invest any better than that”. I say that’s nonsense. You CAN study the market, you can buy good stocks at good prices and avoid bad stocks at bad prices. The market is definitely NOT perfectly efficient at all times.Malkiel’s advice to buy and hold diversified index funds is not bad advice, it’s simply based on a flawed premise that you can’t do better via studying the market, the economy, and individual companies. So two stars for advice that will never fail, but I won’t give any more stars considering he’s flat out wrong in embracing the EMH (Efficient Market Hypothesis).

⭐This is a uniquely solid financial book where Professor Malkiel in a funny (see example at the end of this review) and down to earth manner authoritatively and ruthlessly rains on everyone’s financial parade of theories. The author is not afraid to question and criticize the validity of any theory that financial folks use to justify their existence or high fees. Malkiel starts early own by putting down high financial priests Graham and Buffett themselves. This by astutely pointing out several holes in their value investing firm foundation theory that stocks have intrinsic value and that if you are able to buy below that value and hold you can make a profit. Yes but…future expectations of growth rates and their persistence over time are subjective and thus speculative which is what Graham seeks to avoid in Security analysis! Malkiel then slashes other priests such as the economist Keynes by calling his theory castles in the air. The author keeps on mocking and pointing out flaws of investor advisors and investment vehicles throughout the book. Malkiel is brilliantly Princetonian about how he analyzes and explains a myriad of investments (including crypto) while very pragmatic about making money and dribbling taxes and fees. The only flaw of the book is when it comes to efficient market hypothesis and index funding investing, his own favored theory and conclusion for investing from which he has not budged over the last 50 years (by the way even though the book was published January 2023, it’s data is up to date to July 2022 as you can see in his signature for this edition on the photo). Malkiel doesn’t explain it very well and most of all doesn’t criticize it at all (what if as Michael Burry points out all the sudden everybody would want to out of index funds or there 0was panicking about it, since they have been growing so much over the last 50 years?). I have been a savvy investor as a hobby (for myself only) throughout my professional life separated from finance and highly recommend this book to understand and be alert to the flaws about the plethora of investment proposals available today. However for index funds do your own research rather than blindly trusting Malkiel that is the best thing since sliced bread. As for funny writing an example is for instance when he explains that he has been a professional investor besides a Princeton professor he says “somethings in life can never fully be appreciated or understood by a virgin.” I guess the same goes for index funding – it is not bad and down to earth but not always the satisfying paradise that the Vanguard lovers like Malkiel, Ellis or Bogle spent their entire profitable lives selling. Such funds will likely give you decent returns if you don’t want to invest too much time but they are not the land of honey and milk! They are what they are: relatively low risk over time hence good/modest compounded and appreciation rewards over a long time. However, with more research, higher creativity in investing and sense of opportunity but also higher risks come higher rewards. Malkiel doesn’t seem to grasp that humans are more ambitious than just a safe retirement. In finance like almost anything in life it is rationale to seek more reward knowing that one will be paying for that the price of higher risk. Therefore, I think Siegel’s Stocks for the Long Run is a less detached and less biased book in favor of just one alternative, hence even better (that book is indeed the best investment guide that money can buy), analysis of investment alternatives, with warts and all for everything including index funds. Conclusion, investing is not as simple as Malkiel argues. Not every thing is ugly and inappropriate except index funds. Even Malkiel admits that after all Buffett and Keynes did make a lot of money for themselves. Moreover, if I look around at most successful people in finance and investing, including professional fund managers like Peter Lynch, I know of no one that has achieved fantastic returns by index funding, truly life changing before patiently waiting for compounding, appreciation and several decades until retirement.

⭐This is a reasonably easy read, and most of it makes a good deal of sense. It promotes that individuals will usually be best served by accumulating their wealth through regular investment into indexed products. It justifies this approach by analysing all the other common approaches – technical & fundamental analysis, smart beta, risk parity & ESG investing, and compares the results of each approach over time. It also gives specific age-related advice for portfolio construction, but this assumes the investor is a US citizen so is much less useful to a UK reader. Where I think the book is really weak is that it does not analyse in any detail the dreadful year of 2022 when nearly all investors were down. Indeed, in Chapter 8 when discussing diversification, it states that Bonds were a good place to hide in the Great Financial Crash of 2008-9, yet doesn’t mention at all the fact that bonds were not the place to hide in 2022. It is almost as if they don’t want to spoil their diversification theory with the most recent and un-supporting evidence.

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