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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 214.90-0.1%Dec 26 3:59 PM EST
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To: minnow68 who wrote (73018)3/2/2002 11:50:52 PM
From: ElmerRead Replies (1) of 275872
 
Ever read "A Random Walk Down Wall-Street" by Burton Gordon Malkiel? He argues quite persuasively that stock price changes are indeed best described by a random walk.

Ahhh... no. He argues that you could do just as well following the general upward trend by picking randomly. Not that the market direction is itself random as it clearly is not. However you could do much better than the general market, or the random walk, by simply following several well documented strategys. The "Dogs of the Dow" outpaced the Dow over the years. Selecting stocks based on the Price to Sales Ratio would have returned far greater than the random walk. Price to Cash Flow works, as does Price to Book as well as others. It's well documented in "What works on Wall Street" by James O'Shaughnessy.

I suggest you avoid options though because the research needed doesn't seem to be the kind of thing you'd be interested in.

EP
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