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The book was in better condition than stated in the Amazon adThe book was very well packaged against damage in transitThe book arrived much earlier than expected.All in all, I am delightedDal Burns
The author clearly demonstrates how this is an inherent phenomena in the investing world, as we have recently experienced, and shows us ways to better understand and deal with these situations. If you are trying to read one book only on this subject, this is probably the book that I would recommend. This book is an extensive and complete review of the investing sector, with a particular focus on equities. I also liked the discussion about technical vs fundamental analysis of equities, when each should be used and how to harness the power of each. If you are quite familiar with this subject, you may not find as much depth as you hope but this book would serve as a historical reference. I particularly recommend reading the sections relating to the formation of bubbles and the subsequent collapses throughout the decade. Finally, although the author does take a side on some of the topics he discusses, he does a great job of objectively presenting the different view points which is key for any reference material. A recommended primer.
For those who don't have 4 years and lots of $$$ to get an undergraduate finance degree, this book is an excellent substitute. It is packed with the same academically sound investment advice that all the top business schools teach, it explains it all in an amazingly accessible and entertaining way, and is chock full of interesting and memorable examples --- some of which I will never ever forget. In short, it has to be the best popular investment book ever written.
In the past couple of years, the market has even failed to outperform investments in cocaine and prostitutes.I'm sure this book reads a lot better when you're not slogging through a Depression-like quagmire dominating the investment landscape. Yes. He mentions the period he calls "The Age of Angst", 1969-1981, where the general returns on stocks was 5.6% and 3.8% for bonds. Beats a savings account. Here are some examples."I also think you should keep your risk within reasonable bounds by sticking with issues rated at least A by Moody's and Standard & Poor's rating services". And 12 years is a big chunk of anyone's investment window.If you're 20 and somehow miraculously have way more money than lifestyle and want to invest it in the stock market, *and* the notion holds that general stock market returns are positive over 50 years, then maybe this is some helpful advice. That's a long time and when I saw the final retirement tally, $277k, I thought, great, three decades of $100/month so one could recover from the disastrous loss one would have incurred buying the median home in San Diego in 2005. "the market", I'm not sure that the market can outperform investments like cash in the mattress or gold fillings.
In this book (the 2007 edition) Malkiel basically shows why the broad market indices (S&P, Dow, Russell 3000, etc) generally outperform even professional stock market gamblers. In Oct 2007 in my area of San Diego (including sublease space) the CRE vacancy rate is 25.6% with unprecedented vacant capacity. Could be worse, right. In a different part of the book there is a table showing the earnings on a steady investment of $1200/year over *28* years. Actually, he doesn't really show us why exactly.
Let's say you were afflicted with the unhealthy notion that you could correctly predict which investment vehicles would outperform the market. Turns out, I do, but that's only because I've read a lot of other books (mostly by skeptical statisticians) that show in greater detail that Malkiel's premise is essentially correct.The author is, I suppose, merely conservative in his investment outlook while I must be tin foil hat insanely paranoid. I, however, wasn't really convinced that it was any safer than any random investment, including spending all your money on fun things you like. Perhaps it's just my delightfully awful luck to be interested in investment science at a time of secular market trends that are like some kind of horror movie, but the fact is that the entire market can suck and suck you down with it for impressively long runs. Even if they're not categorically corrupt, they stink enough that anyone relying on them when not dealing with "other people's money" is making a mistake."You may also wish to consider ownership of commercial real estate." I guess the management at GE read this book. Well isn't that precious.
Of course you can't see that kind of anomalous event coming, however, I did. Turns out that bond ratings have been shown to be largely a scam. The author more accurately just tells us it's true and hopes we'll take his word for it. My bigger problem is the major premise of the book which is that over the *long term*, stocks don't suck. What's that. Wait. I'm under the impression that CRE is one of the main reasons GEs stock is about 1/6 of what it was 2 years ago. The best piece of advice from the book is that many of the materials to help you research various investments can be found at your local library.
However, if you are such a person and such assumptions are correct, it'd be hard to screw that up.Malkiel doesn't really give good fundamental reasons why the stock market should go up over the long term. This book would be a reasonable component of your therapy regime. Ouch. Inflation was 7.8%.
The quotes above are really minor points in the book. The fact that it has in the past is a myth that he explicitly debunks, for example, when talking about selecting a mutual fund. It's never been a better time to be a renter.It turns out that life is full of risks and that even being conservative in the way this book outlines is a huge gamble. The main problem I have with his thinking is that while I agree with him that neither you nor I can not outperform general market indices, i.e. He knows that his strategy is boring but that is because he believes it is the safest bet and maybe it is.
Which brings us to:"Own your own home if you can possibly afford it." In 2004, I *could* have possibly purchased a house, but it would have been a financial disaster of such catastrophic proportions as to completely negate any gains of the magnitude envisioned by this book. No thanks. I respected his low sensationalism approach. Like this book.
New Investment Methods 4. It gives a brief introduction to the major investing styles/theories and explains why the best bet for most people is to buy and hold (mostly index funds).The book is separated into 4 parts: 1. This is a classic investment book. A Practical GuideEven though this book provided me with no new insight, I believe this is a great book for anyone interested in learning about investing in the stock market.The fact remains that buying and holding good companies over the long run works. Stocks and their value 2. How the Professionals operate 3. The question is, what are the good companies. Why not just buy them all with an index fund.
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