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To: minnow68 who wrote (73018)3/2/2002 11:04:27 PM
From: niceguy767Respond to of 275872
 
minnow68:

"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. Indeed, that it is very much a "crap shoot". "This is a view shared by a large number of extremely sophisticated investors."

But he's not "ahead" $0.25 at the moment on his 100 share purchase and his one call write contract, so what can he possibly know???



To: minnow68 who wrote (73018)3/2/2002 11:50:52 PM
From: ElmerRead Replies (1) | Respond to 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



To: minnow68 who wrote (73018)3/3/2002 7:13:27 AM
From: TGPTNDRRespond to of 275872
 
Mike, Re: "random walk" An interesting book and a fine read(I've read it twice so far, the last time about 10 years ago), but not very persuasive, IMO.

It does make a decent start, though, and the random factor is certainly stronger than the analysts would have one think.

Gives me the urge to put my chips down against the experts -- especially when there are big price changes on reversal of expert opinion.

tpgtndr


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