A Random Walk Down Wall Street


  • Pages: 452
  • Format: PDF
  • Published Date: 2007


A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing 

A Random Walk Down Wall Street includes new strategies for rearranging your portfolio for retirement, along with the book’s classic life-cycle guide to investing, which matches the needs of investors in any age bracket.

Author’s Introduction:

A Random Walk Down Wall Street 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 L’irowing darts at the Wall Street Journal can select a portfolio that performs as well as those managed by the experts.

Through the past thirty-five years, that thesis has held up remarkably well. More than twothirds of professional portfolio managers have been outperformed by the unmanaged S&P 500 Index. Nevertheless, there are still both academics and practitioners who doubt the validity of the theory.

And the stock-market crash of October 1987, as well as the crashette of July 2002, 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 in chapter 11 that reports of the death of the efficient-market theory 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.

The book 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 most 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 ·~ LifeCycle 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.


  • Firm Foundations and Castles in the Air
  • The Madness of Crowds
  • Stock Valuation from the Sixties through the Nineties
  • The Biggest Bubble of All: Surfing on the Internet
  • Technical and Fundamental Analysis
  • Technical Analysis and the Random-Walk Theory
  • How Good Is Fundamental Analysis?
  • A New Walking Shoe: Modem Portfolio Theory
  • Reaping Reward by Increasing Risk
  • Behavioral Finance
  • Poshots at the Efficient-Market Theory and Why They Miss
  • A Fitness Manual for Random Walkers
  • Handicapping the Financial Race: A Primer in Understanding and Projecting Returns from Stocks and Bonds
  • A Life-Cycle Guide to Investing
  • Three Giant Steps Down Wall Street