Title: A Random Walk Down Wall Street
Mathematicians call a sequence of numbers produced by a random process as a “random walk.” Dr. Malkiel, an economist at Princeton, argues that asset prices show signs of a random walk.
Market timers risk missing the infrequent large sprint that are big contributors to overall performance when they try to stock pick. He crafts a compelling case with research from the University of Michigan showing 95% of significant market gains over the past 35 years were on 90 of the roughly 7.5k days.
This is reaffirmed by one of my favorite quotes, “Not timing the market, but time in the market.”
Overall, a sound read for investing basics.
The single most important thing you can do to achieve financial security is to begin a regular savings program and start it as early as possible.
Out guessing the reaction of a fickle crowd is a most dangerous game.
Unsustainable prices may persist for years but eventually, they reverse themselves.
Part of the genius of financial markets is when there’s a demand for a method to enhance speculative opportunities, the market will surely provide.
Consistent losers are those who are unable to resist being swept up in some kind of tulip bulb craze.
The market has little, if any, memory.