Reddit reviews A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Tenth Edition)
We found 13 Reddit comments about A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Tenth Edition). Here are the top ones, ranked by their Reddit score.
A Random Walk Down Wall Street
throwaway (despite the name) is legit.
If you want to know more about the stock market and why index funds are where it's at, check out A Random Walk down Wall Street. You learn things like 80% of "managed" mutual funds perform worse than index funds. not only that, managed funds charge much more in the way of fees, effectively charging you more to lose money. He also investigates if the stock market is correlated with fashionable skirt length in women or the superbowl champion (yes these are real theories).
If you want to learn more about personal finance, check out The Richest Man in Babylon. To this day one of my favorite books. If you let money be your master, you will always be a slave. If you are the master of your money, no one can ever own you. fuck yeah.
Before you even go to a financial advisor or one that any Redditor might post to recommend as friends, go borrow these books from the library for a read so the investment world makes sense to you when you do talk about money with a planner and want to make sure you're getting good advice:
http://www.amazon.com/Intelligent-Investor-Definitive-Investing-Practical/dp/0060555661
http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393081435
http://www.amazon.com/Warren-Buffett-Way-Second/dp/0471743674
If you're really lazy, at least read the first one.
If you're really, really lazy. Follow this blog for a bit http://canadiancouchpotato.com/
After that, only then should you take referrals and recommendations. Go to a few, and armed with some knowledge, you'll be much prepared to sift through advisors that are trying to bullshit you for front-loaded commissions, etc.
Long is when you buy an asset in the hope that its value will increase. Buy low and sell high. It's the form of investing in stocks that everyone is familiar with.
Short is when you approach someone who is holding assets long, deposit money with them, and take possession of one of their assets to sell on the open market. You hope the price of the asset goes down rather than up. Once it goes down, you buy it back, and return it to the person you borrowed it from. Sell high and buy low.
You short an asset if you think it's overvalued and its price will soon go down. Shorting an asset doesn't actually make the price go down. The reason the person who owns the asset is willing to let you short it is because they have you pay them a fee, deposit an equivalent cash value with them and promise to return it, so it causes them no harm. If you're wondering why they don't just sell an asset that you indicate is expected to decrease in value, it's because either they think you're wrong, or more frequently because they're institutional investors that hold a broad swath of assets, and don't try to buy and sell on every fluctuation in prices. A Random Walk Down Wall Street describes this broad buy and hold strategy in great detail.
My goal when I started investing was to learn as much as I possibly could without spending a dime. This means not buying stocks or mutual funds immediately, but instead reading and understanding from people who have already done well. If you are unwilling to pick up a book at this stage, then you're going to make some costly mistakes down the road.
My advice: ignore the $2500 and go to the library. Below are my recommendations (taken from the /r/investing sidebar):
> My first (probably terrible) idea was when I noticed that apple shares fluctuate about 30 dollars a day on average. Even if I just had one share and sold high and bought low, 30 bucks a day is bathing in money when you're at school. I realize I'm probably missing something and it isn't that simple, but that's why I want to learn.
This is pure speculation, not investing. Investing means long term (> 10 years) holdings that produce a consistent, reliable return (there is an ebb and flow, of course). Speculating is akin to gambling. If you want your money to work for you, investing is the course much more likely to accomplish that goal. If your goal is a quick buck, then you'll probably have better odds in Vegas than on Wall Street.
Investing is about the long, how much risk you're willing to assume, and how much volatility you can emotionally handle.
7% is hard today, 10 years ago 10% wasn't abnormal. Averaging over the years and you get ~7%...so you have to take the downs with the ups.
Check out A Random Walk Down Wallstreet
People who make their living selling financial snake oil want you to think investing is a mystical or incredibly difficult or arcane process. But it's really not. That book breaks it down in plain english and provides a map for investing. It's an easy read.
See, this to me is the wrong way to think about business.
RIM was leader in enterprise systems until late last year and is still second. They have huge market share. They also hold niche markets like secure smart phones and tablets. From a business perspective, they are in an enviable position.
The problem isn't with their position; it is with their trend. If they had been on an upward trend to the position they are currently in, everyone would be screaming about how great they are. In business it is position that matters more than trend. A trend can change, and effort can be put in to change the trend if you understand it. Many companies have done this. Apple is a prime example of a failed company that turned it around and became a market leader. Twelve years ago everyone thought of Apple the way people think of RIM today.
RIM is in a good position right now, and if they make the right moves they can reverse that trend. iPhones/iPads are fine, but they aren't perfect. They became fashionable and trendy and possibly overhyped. Steve Jobs was part of that trendiness. With him gone, and iPhone losing its "newness", it seems to me the time is ripe to move to change those trends.
I don't know what the right moves are. The question is whether RIM can figure it out, or gamble correctly, to change those trends. They definitely have the makings for it with top notch hardware and OS software, key differentiators and niches, and potential (such as Android apps working on PlayBook and soon phones).
The over-reliance of investors (and "trendy" consumers) on trends is fairly well documented. (My favorite book on the subject right now is The Drunkards Walk, though a A Random Walk Down Wall Street is probably the better known classic.) It's what causes bubbles on the upswing, and undervalued stocks on the downswing. It's also why investors who ignore those trends and invest via risk management principles tend to do much better than trend followers.
I'm keeping an eye on RIM to see what they do. I certainly won't write them off yet.
The single best book I've read is, "A Random Walk Down Wall Street." I'm with the OP, fuck Suze Orman.
"Random Walk" is a fairly interesting/easy read for a personal finance book. Malkiel should convince you by the time it's through why index funds are the way to go.
If you want something more challenging after that, try David Swenson's "Unconventional Success" It was a much tougher read for me, I really had to slog through it. But Swenson's record is pretty amazing, and he makes a convincing argument about why it's important to set up a simple approach to diversification. And it really is simple - 6 different categories, rebalance annually, that's it.
I enjoyed the book A Random Walk Down Wall Street. It's not entirely apropos your interests, but I think you will find it agreeably skeptical about the prevailing economic mumbo-jumbo. Steven Landsburg's The Armchair Economist is another easy, thought-provoking read. I have not read it, but I am curious about More Heat than Light ("Economics as Social Physics, Physics as Nature's Economics ").
An individual investor should NEVER invest in single stocks.
Read this and this to understand why.
If you plan on not dying young, you will need to start saving for retirement, the sooner the better. This in turn requires not only saving, but investing to make sure that your savings at the very least, keep pace with inflation (and hopefully do better).
There are a thousand books on investing, and I can't say I've read even a fraction, but one of the better "level headed, time tested" books out there is "A random walk down Wallstreet"
http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393081435/
Markets will fluctuate wildly and beyond your ability to predict. The good news is that you have time on your side, and historically, the markets have had an upward trend.
Granted, this is all predicated on the idea that the country is not on fire in 10-20 years (best to stay out of /r/politics if you want to stay optimistic), but your best bet is to ride the trend of the general market over a long period of time.
Still, there really are no guarantee. Best to leave guarantees for death and taxes.
Don't try to beat the market. Read A Random Walk Down Wall Street and make sure you understand why it's not a good idea to try to beat the market unless you're a physics PhD working at a hedge fund, and possibly not even then. Invest, but don't trade actively or expect to time anything.
rears head
GAMBLANG
http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393081435