In the short term such markets are, as the phrase goes, a random walk.
Pretty much a random walk in the short term most of the time too.
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Doesn't this contradict his support for index funds in his book A Random Walk Down Wall Street?
In his 1973 book A Random Walk Down Wall Street, economist and Princeton University professor Burton G.
It was Burton Malkiel, author of A Random Walk Down Wall Street , the classic on efficient financial markets.
How much validity you should assign to PFTH depends on whether you think stock prices move in a chaotic manner or follow a random walk.
Forbes: Can you describe your investment strategy in this type of market, and is it the same strategy that you chronicled in your book A Random Walk Down Wall Street?
Famously, author and investing legend Burton Malkiel suggested in A Random Walk Down Wall Street that you could get monkeys to toss darts at the financial listings in a newspaper and do just as well as a pro stock picker.
Gary Shilling, editor of Insight, looks at the economy and the financial sector and remains a bear with claws, while Burton Malkiel, author of A Random Walk Down Wall Street, counters that trying to predict the market is folly--even though he's a huge bull on China!
He made his big splash in 1973 with his best-selling takedown of stock-picking, A Random Walk Down Wall Street, in which he illustrated the futility of accurately predicting future stock prices, noting how a blindfolded chimpanzee throwing darts at the stock page of a newspaper could pick winners as well as a Wall Street professional.
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This suggests a different gait to the random walk in the U.S. than in the U.K. Intrinsically there is an arbitrage opportunity there.
And then finally, the other thing I've always been a big believer in, and Forbes magazine has been a great supporter from the very beginning of my Random Walk book, and that is put your money in low-cost index funds.
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