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

Description

A Best Book For Investors Pick by the Wall Street Journal’s “Weekend Investor”Whether you’re considering your first 401k contribution, contemplating retirement, or anywhere in between, A Random Walk Down Wall Street is the best investment guide money can buy. In this new edition, Burton G. Malkiel shares authoritative insights spanning the full range of investment opportunities—including valuable new material on cryptocurrencies like bitcoin, and “tax-loss harvesting”—to help you chart a calm course through the turbulent waters of today’s financial markets.

User’s Reviews

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

⭐I started with the hardbound version of this book from my local library and finished with the softcover cover version from Amazon.Burton Malkiel gives a very broad overview of how our securities markets are structured, how they operates, and how we interact with them. This includes a history lesson in bubbles, booms, busts, depressions, recessions, and rallies from the Tulip craze to today’s time. Malkiel covers everything from stocks to bonds to mutual funds and more. There’s chapters on charting, modern portfolio theory, and CAPM. Although this book is meant to be an overview, there is a lot … and, I mean ~a lot~ … of information here. The text reads like a professor at a university trying to give an interesting lecture or presentation. Some of the chapters, like the history of market swings, I found interesting to read because I like history in general – the whole how and why of events and their influence on how we got to day.I also enjoyed the chapters on investing behavior and psychology. Other chapters, like on charting, beta, and government backed bonds did not captivate me much. The information was sometimes too technical in nature and sounded like a bunch of hooey to me or just didn’t apply to my personal investing strategy.The whole text can be boiled down to a few key concepts.First, the market is irrational and unpredictable. Don’t try too hard to outsmart it or time it just right. The blips and dips in security prices, random world events like terrorist attacks or government scandals, and unjustified exuberance or pessimism are too much for anyone or anything to take on. You won’t win. You may get lucky and think you won but you could have just as easily lost. Hence, the random walk.Two, despite all that dreck in #1 above, investing in the stock market still beats out any other investment in the long run. Buy, *hold*, **add**, and repeat. Don’t fall prey to jittery emotions or the whims and wiles of “professional” investors with messages of doom and gloom. Like Warren Buffett said, the best holding time is forever.Three, picking a winning stock is not easy. Suppose you are a young investor with a small sum of money like $5k. How will you invest it? Do you feel confident in picking a stock or two? Will your picks beat the market average? Maybe, if you pick right under the right conditions. However, the best way to invest in the market would be through an index fund that reflects the very market you want to invest in. The index fund, either as an ETF or Mutual Fund, will contain a little of everything that reflects the index it is benchmarked against. The SPY will follow the S&P, DIA will follow the Dow Jones, QQQ will track the Nasdaq 100. So, why risk picking one or two stocks when you can kind of have them all?Four, diversify your diversification. The index funds diversify your money among many securities. You can go further and diversify by investing in international funds. The idea is some international funds can outperform US funds. They can also “zig” when the US funds “zag”.Five, and lastly, skip the services of a professional advisor. He’s no genie or wizard. You can do just as well as he can if not better.I agree with 1, 2, and 5 above but I disagree somewhat with 3 and 4.Regarding 3, you ought to be able to open up any index fund and see exactly what it is holding and how much. For example, if you want to know what SOXX is holding then go to the iShares website and look at it. It’s all there. Rather than buying SOXX I can skip the middleman and his approximately 0.5% fee and just buy those securities … or, at least the top 10. Many brokerage firms, like Fidelity, offer fractional trading down to 0.001 shares as long as the resulting purchase price is at least $0.01. Now, that means you ought to put in some work and learn how to follow a stock. At least you have a starting point.Going further, assume you rolled over a pension or 401(k) into a traditional and/or a Roth IRA. You may find yourself with a large sum of money, like $100k or more. With money like that you can build up a serious version of your own equivalent of an index fund with anywhere from 20 to 80 securities.Now, I will counter myself and repeat what I said above. This will involve quite a bit of work over a long period of time. You have companies to keep track of and all that. It can become like a second job, In that case, maybe a simple all-in-one index fund is all you need.Regarding 4, I think you ought to use some of the advanced charting tools or total returns calculators available from your broker or somewhere else online to compare how US securities performed compared to international securities. Compare some of the US best like QQQ, SPY, SOXX, and IGV to country specific funds that focus on New Zealand, China, and Russia. If you see these international funds outperformed their US counterparts then you have a starting point for a case for international diversification. Personally, I didn’t see it. I saw the US centric ETFs and securities far outperform a majority of international funds. Diversification here wouldn’t make sense. Why would I split money between two markets, one that can grow >8% per year over 10 years and one that can grow ~4% per year over 10 years? I’d rather pour everything that I can into the highest performing instrument available. If something better comes around after a couple of years then I divest one and buy the other. Or, even better, buy more of the depressed security knowing that it will rebound.So, while I don’t agree with everything Malkiel says it did provoke a lot of thought in my mind and for that I give it 5 stars.

⭐The book is written at a level such that the reader needs a PhD and a background in investments to get the most of it. I have both, so no worries. The book is well written, but he does not to a good job of dispelling his central thesis, that the market cannot be predicted. We have developed robust models for 35 years that do just that with accuracies greater than 95% on a daily basis… So, I disagree with his fundamental argument.

⭐They were prompt with delivery and the book arrived in great shape. They also left a very kind note in the packaging. This is a small business that appreciates the traffic, I can tell they are working for it!

⭐Enjoy our reading !

⭐A terrific easy to understand course on the development of investment theory with concrete examples.

⭐Professor Malkiel assumes that the S&P can’t be valued relative to other financial assets. Over the long term, it can be valued relative to bonds, with a risk premium.

⭐A clear and convincing argument for index funds, along with advice for dabbling in individual stocks if you still feel the urge. Well written and clearly organized, including a few chapters that are more technical than the rest of the book.

⭐As a young adult looking to start investing, I discovered A Random Walk Down Wall Street by Burton G. Malkiel, which kickstarted my journey into my future career in the financial industry. In four sections broken into 15 chapters, Malkiel introduces new investors to the complexity of the stock market by offering a gentle start to a potentially rough journey by advocating for index fund investing. I enjoyed how Malkiel introduces strategies (like technical and fundamental analysis) that conflict with his own while still defending why he offers the best opportunity for the average investor. However, this book is not written for the financial know-it-all, so some examples slow down the pace to cater to a broader, less knowledgeable audience which is essentially the book’s purpose. Nevertheless, this book is deserving of a 5-star rating because of the way it introduces topics that can intimidate the average reader but eventually builds credibility to support the author’s argument. Overall, this book serves as a small first step for new investors to begin a long walk in the financial industry.

⭐I listened to this book on audible first and really enjoyed it to start with. I have read lots of books on the stock market/investing over the years and had high hopes for this after looking at the good reviews. It starts well but then gets a bit boring as it keeps going on about the same thing which is to put your money in index funds. Just keeps going over and over why you should do this. Repetitive.

⭐Enjoying this, half way way through it. Great if you’re new to investing. It’s a US book and I’m in in UK but that doesn’t make a huge difference. The book is long. I guess you could just dive in to the sections you find relevant.

⭐A wonderful book, full of knowledge, graphics and data that make it so easy to understand. A lot of inspiration and motivation for my retirement plan.

⭐This book is must read, eye opener in some instances

⭐The fundamental text for new investors. Clearly written with colorful examples makes this book easily accessible for novice investors and the more seasoned alike.

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