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Random Walk’s Malkiel sells out

I first read Princeton U.’s Burton Malkiel when I was in college.  Certainly a best-seller, his 1973 A Random Walk Down Wall Street was as common on a Harvard Econ professor’s shelf as beer pong was in a Dartmouth frat.

For Malkiel, Wall St.’s high priced investment advice was an anathema — investors just couldn’t beat the market, so why try?  Better to invest in low-cost, passive indexes and go out and have fun.

Well, Malkiel is back with the 613th or something printing of Random Walk and in anticipation of the book’s launch, he’s hitting the interview circuit.

Can it be that the Grinch of Wall St has had a change of heart?  In an interview with RegisteredRep, he dropped a whammy:

RR: You write, “You can do as well as the experts — perhaps even better.” That philosophy must drive financial advisors crazy.
BM: In a way, you really need to interpret that. I’ve become frankly more appreciative of what a financial advisor can do. For me, it’s keeping people from beating themselves. Keeping people on an even keel. It’s easier said than done. It’s very hard work.

I’m sort of an informal financial advisor for all of the Princeton widows. I remember so many of them would come in with tears in their eyes in the third quarter of 2008 when it looked like the world was falling apart — “and I have to sell all of my equities!” That’s what I mean by keeping people on an even keel.

Either he’s hankering for a new job or he just really knows his audience.


Malkiel: Wall St. Has Caught Up to Random Walk (RegisteredRep)

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  • http://steamcatapult.com/ Dave Pinsen

    I’m not a fan of Malkiel’s advocacy of indexing, but he didn’t sell out in that answer. He apparently still thinks long-only indexing is a good strategy in a secular bear market (despite the evidence to the contrary), and says he appreciates the value advisers can add in keeping investors in such a periodically painful strategy.

  • admin

    probably. I just think it made it a more compelling read.

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