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

by Burton G. Malkiel

Such devices helped to ensure broad participation in the market. The same is true today.

followed by an even larger decline in prices in February.

In fact, the major impetus for the conglomerate wave of the 1960s was that the acquisition process itself could be made to produce growth in earnings per share.

That probably is th reason why there are such conglomerates investing in China.

The public found it fashionable to bet on the jockey rather than the horse.

The proliferation of publications was a classic sign of a speculative bubble.

Online brokers were also a critical factor in fueling the Internet boom.

People who would spend hours researching the pros and cons of buying a $50 kitchen appliance would risk tens of thousands on a chat-room tip.

establishment of a myriad of complex partnerships that obfuscated the true financial position

As home equity collapsed, consumers pulled in their horns and went on a spending strike.

Stock investors can do no better than simply buying and holding an index fund that owns a portfolio consisting of all the stocks in the market.

As more and more people use it, the value of any technique depreciates.

What is proposed is a strategy of buying unrecognized growth stocks whose earnings multiples are not at a premium over the market. Even if the growth doesn’t materialize and earnings decline, the damage is likely to be only single if the multiple is low to begin with, whereas the benefits may double if the growth materializes. This is an extra way to put the odds in your favor.