文档介绍：A Random Walk Down Wall Street
Business 3059
Investment Management
Chapter 7
Technical Analysis and the Random-Walk Theory
PART II – HOW THE PROS PLAY THE BIGGEST GAME IN TOWN
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NOTICE
This text is mandatory reading for this course. This slide set has been constructed to help you understand that there are important concepts in this resource for you to understand.
This slide set IS NOT a substitute for your own independent reading of the text.
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Chapter 7 – Technical Analysis and the Random Walk Theory
“…the history of stock price movements contains no useful information that will enable an investor consistently to outperform a buy-and-hold strategy in managing a portfolio.”
In this chapter, Malkiel helps you understand what is meant by Random Walk.
He uses the example of flipping a coin to demonstrate that stock price movements over time perform very like the classic coin toss.
This is because information that affects stock e to the market randomly…and stock prices ‘vibrate’ randomly in response.
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Is There Momentum in the Stock Market?
Malkiel admits that there is a persistent upward trend in stock prices over time…but it is so small that it is not possible to buy and sell (and incur transactions costs) to take advantage of it using technical analysis.
In the end, you are better off to simply buy a diversified portfolio and hold it over time (consciously minimizin