A Random Walk Down Wall Street (Burton Makiel)

“A Random Walk Down Wall Street” by Burton Malkiel argues that individual investors can beat Wall Street professionals, who rely on either fundamental or technical analysis. Markets behave like a random walk, influenced by factors such as fees, taxes, and human psychology. Fundamental analysis involves assessing a stock’s intrinsic value but is susceptible to faulty information, errors, and unexpected events. Technical analysis relies on chart patterns but is flawed due to unequal access to information and self-defeating techniques. The efficient market hypothesis suggests that predicting market development is impossible. The solution to beating Wall Street is to invest for the long run in cheap index funds and other asset classes to increase diversification and decrease risk.