Burton G. Malkiel
Author of A Random Walk Down Wall Street: The Time Tested Strategy for Successful Investing
About the Author
Burton Gordon Malkiel is an economics professor at Princeton University. He has written A Random Walk Down Wall Street: Including a Life-Cycle Guide to Personal Investing and assisted in the development of the book, Earn More (Sleep Better): The Index Fund Solution, written by Richard E. Evans. show more (Bowker Author Biography) show less
Image credit: Prof. Burton Gordon Malkiel. Photo by J.D. Levine/Yale (photo courtesy of Princeton University)
Works by Burton G. Malkiel
A Random Walk Down Wall Street: The Time Tested Strategy for Successful Investing (1973) 3,113 copies, 29 reviews
From Wall Street to the Great Wall: How Investors Can Profit from China's Booming Economy (2007) 30 copies, 1 review
Book 9788836012725 1 copy
Associated Works
Naked Economics: Undressing the Dismal Science (Fully Revised and Updated) (2010) — Foreword — 778 copies, 7 reviews
Tagged
Common Knowledge
- Birthdate
- 1932-08-28
- Gender
- male
- Education
- Harvard University
Princeton University - Occupations
- professor
Dean, Yale School of Organization and Management - Organizations
- United States Army
Princeton University - Nationality
- USA
- Associated Place (for map)
- USA
Members
Reviews
Professors teaching security analysis in business schools face an interesting dilemma: We train people how to identify situations where a stock’s price and intrinsic value may differ, despite the fact that a substantial portion of our academic preparation strongly suggests that security markets are efficient to the point that such activity is unlikely to lead to abnormal profits over time. While it is certainly possible to reconcile these polemical positions—for instance, when there is a show more cost to acquiring and processing financial information—the more interesting question probably involves establishing which view of the world defines an individual’s core belief.
My own opinion is that investors are far better off in the long run with a null hypothesis that markets are efficient; this creates the burden of having to convince themselves why price and value might differ in a particular situation. That is certainly Malkiel's view as well and, within that context, A Random Walk Down Wall Street is the most compelling and user-friendly statement of the nature and portfolio implications of the efficient market hypothesis that an investor could hope to find. I have used it as a supplementary text in my classes for years and it remains an insightful and highly entertaining reference. show less
My own opinion is that investors are far better off in the long run with a null hypothesis that markets are efficient; this creates the burden of having to convince themselves why price and value might differ in a particular situation. That is certainly Malkiel's view as well and, within that context, A Random Walk Down Wall Street is the most compelling and user-friendly statement of the nature and portfolio implications of the efficient market hypothesis that an investor could hope to find. I have used it as a supplementary text in my classes for years and it remains an insightful and highly entertaining reference. show less
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition by Burton G. Malkiel
This book courageously opposes all the categories of voodoo that tempt the born-a-minute fools swarming the worldwide securities markets. Yes, you may make ninety percent timing the market today, but you will lose just as much the next day and the next. And then you have to pay your broker. And the tax man.
Better to buy index funds and hold them until you retire. If that's too boring for you, take five percent of your money and speculate with that. But don't fool yourself into thinking that show more you can beat the market. Avalanches of data show that market timing is not a matter of skill, but luck. And any gains will be shaved to uselessness by the Uncle Sam and your broker.
Even the seemingly scientific techniques of technical analysis are destroyed in the blast of Malkiel's empirical artillery. Markets are random. Trends reverse without warning. Your head and shoulders pattern is not going to make you money. Sorry.
Yes, Malkiel's thesis is "buy and hold." But he's not trying to depress you with his thesis; he's trying to help you make as much money as possible with your investments. If you need to gamble, Malkiel gives advice for gambling in the sanest possible way.
This book is a frank, level-headed approach to squeezing the best returns from your invested dollars. And, after more than 30 years in print, there is no point in trying to argue against Random Walk. If you really feel the need to get disgustingly rich on Wall Street, open a brokerage already. show less
Better to buy index funds and hold them until you retire. If that's too boring for you, take five percent of your money and speculate with that. But don't fool yourself into thinking that show more you can beat the market. Avalanches of data show that market timing is not a matter of skill, but luck. And any gains will be shaved to uselessness by the Uncle Sam and your broker.
Even the seemingly scientific techniques of technical analysis are destroyed in the blast of Malkiel's empirical artillery. Markets are random. Trends reverse without warning. Your head and shoulders pattern is not going to make you money. Sorry.
Yes, Malkiel's thesis is "buy and hold." But he's not trying to depress you with his thesis; he's trying to help you make as much money as possible with your investments. If you need to gamble, Malkiel gives advice for gambling in the sanest possible way.
This book is a frank, level-headed approach to squeezing the best returns from your invested dollars. And, after more than 30 years in print, there is no point in trying to argue against Random Walk. If you really feel the need to get disgustingly rich on Wall Street, open a brokerage already. show less
Let's talk about the Random Walk. The stockmarket is a game of chance - you might as well flip a coin to determine which way prices are going. In fact tossing is preferable because researching shares or paying professionals takes time and costs money.
The Random Walk attacks the tenets of professional fund management: that investors can pick shares trading at a lower price than their true value or traders can spot trends in price movements and exploit them.
Malkiel marshals an army of show more statisticians, back-testing the more common investment strategies and finding them wanting. Sure you may win in the short-term, but that is lady luck. In the long-run, once you take costs into account, all bets are off.
I do not buy it. Back-testing is fine and dandy but does it actually prove anything? Real investors - and I am talking about private investors here - change their strategies, exercise judgement and break the rules. They are not slaves to the slide-rule.
While it is common knowledge that professional money managers are doomed to fail, I suspect private investors have a better chance of beating the market. The problem is private investors are by nature shy animals.
Just because I disagree with his thesis does not mean I do not think you should bother with the book. Malkiel is articulate and his tour through fundamental analysis, technical analysis, modern portfolio theory and the capital asset pricing model is as good as any introduction I have read.
I just cannot bring myself to believe anomalies do not exist when I see them all around me. You know - internet bubbles, overreactions, Warren Buffet. Even Malkiel sees anomalies. But in his world they are rare, difficult to profit from and vanish once common knowledge.
He even has an investment trust habit. C'mon Mr Malkiel admit it - inside every index-hugger is a stock picker desperate to get out. It is more fun!
___
A word of warning for British readers. The first three chapters are theory, it is a universal language. The fourth is a practical guide, less practical for us because it is written in American: all IRA's and Keogh plans. Still you can translate some of it and derive general principles from the rest. show less
The Random Walk attacks the tenets of professional fund management: that investors can pick shares trading at a lower price than their true value or traders can spot trends in price movements and exploit them.
Malkiel marshals an army of show more statisticians, back-testing the more common investment strategies and finding them wanting. Sure you may win in the short-term, but that is lady luck. In the long-run, once you take costs into account, all bets are off.
I do not buy it. Back-testing is fine and dandy but does it actually prove anything? Real investors - and I am talking about private investors here - change their strategies, exercise judgement and break the rules. They are not slaves to the slide-rule.
While it is common knowledge that professional money managers are doomed to fail, I suspect private investors have a better chance of beating the market. The problem is private investors are by nature shy animals.
Just because I disagree with his thesis does not mean I do not think you should bother with the book. Malkiel is articulate and his tour through fundamental analysis, technical analysis, modern portfolio theory and the capital asset pricing model is as good as any introduction I have read.
I just cannot bring myself to believe anomalies do not exist when I see them all around me. You know - internet bubbles, overreactions, Warren Buffet. Even Malkiel sees anomalies. But in his world they are rare, difficult to profit from and vanish once common knowledge.
He even has an investment trust habit. C'mon Mr Malkiel admit it - inside every index-hugger is a stock picker desperate to get out. It is more fun!
___
A word of warning for British readers. The first three chapters are theory, it is a universal language. The fourth is a practical guide, less practical for us because it is written in American: all IRA's and Keogh plans. Still you can translate some of it and derive general principles from the rest. show less
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton G. Malkiel
I happened to read this at the perfect timing when there are so much volatility and fireworks in the stock market.
It blends history, market theories/approaches, and biases when investing and offers actionable advice.
If I would have to choose one quote to summarize the book, it definitely would be this one:
Thus the random show more
It blends history, market theories/approaches, and biases when investing and offers actionable advice.
If I would have to choose one quote to summarize the book, it definitely would be this one:
A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.
Thus the random show more
walk:show lessRandom walk theory assumes the past movement or trend of a stock price or market cannot be used to predict its future movement. In short, random walk theory proclaims that stocks take a random and unpredictable path that makes all methods of predicting stock prices futile in the long run.
With this in mind, the author makes fun of fundamental/technical analysis. He advises to build a portfolio based on a person's age and risk tolerance and constantly rebalance it. The longer the time period over which you can hold on to your investments, the greater should be the share of common stocks in your portfolio. Invest in low-cost, tax-efficient, broad-based index funds if you do not want to get beaten by a blindfolded monkey.
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