A Random Walk Down Wall Street Review11/16/2020
Now, you might think that how could a professor of economics give good advice regarding investment.Then, he gives examples of previous bubbles, from the tulip bulb craze to the internet craze, covering a period of a few hundred years.He also disproves a few investment systems that promise consistent returns.
I find that a Malaysian cannot apply most recommendations from this part. However, there are still lessons to be taken from his advice. It is a term coined by mathematicians to mean a sequence of numbers produced by a random process. By using this term, the author suggests that the price movement of the stock market is completely unpredictable based on its history. According to the author, the risk decreases with longer holding period. Styles and fashions affect the pricing of securities but ultimately the market corrects any irrationality. Nonetheless, this strategy is not really feasible in Malaysia. If growth materializes, the investor will likely get a double benefit of increase in the earnings and the PE ratio. Based on this insight, he prescribes a guide for every age range. Nonetheless, this only applies to stock market as a whole, but not individual stock. He recognizes that some inefficiencies can and do exist in the market and these can be exploited by investors. I hope to share with you the opportunities in Malaysia and my own experience in the investing journey. Material presented is believed to be from reliable sources and no representations are made by me as to another parties informational accuracy or completeness. All information or ideas provided are to be used at your own risk.
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