I recently had the chance to reread A Random Walk Down Wall Street by Burton Malkiel as part of a work-related book club.
Having read the book in a business school class very early in my career, I promptly ignored its advice and became a securities analyst (a profession about which he makes a few disparaging remarks!) charged with analyzing companies and making buy-and-sell recommendations. I was guilty of most of the shortcomings Dr. Malkiel points to (for example, trying to pick winners), but at least I got to visit an oil rig in the Gulf of Mexico. Read more »
I am a pack rat.
A long habit of cutting articles from newspapers and magazines has left me with several boxes of clippings, only some of which have been sorted into files. On a clean-up crusade, I’ve spent more than a few hours going through the pile, looking to pluck only a few particularly interesting needles from the haystack.
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Commentators almost seem to have been competing to coin the catchiest—or most negative—label for the ten years from the end of 1999 to the end of 2009. It’s not surprising that some have called it the “Decade from Hell,” given the 9/11 attacks, wars in Iraq and Afghanistan, Hurricane Katrina, a deadly tsunami, the nastiness of domestic political discourse, soaring unemployment and federal budget deficits, etc.
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Like everyone else, I’ve been reading (well, skimming) reams of year-end—and in some places, “decade-end”—economic summaries. There’s lots of talk about black swans, financial “Frankensteins,” lost decades, and fundamental changes in investor behavior.
Black swans are old news, and I’ve written on financial innovation and lost decades previously. And I’ve only got a tiny bit to say about investor behavior. I’ll get to that after sharing a few other observations I wish got more attention in all this year-in-reviewing.
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I elicited some grief from certain Vanguard Blog readers by talking about a recovery in 401(k) accounts earlier this year. Allow me to provide an update on the issue.
Recall my basic premise: As a result of ongoing contributions, as well as portfolio diversification, the wealth level of many 401(k) participants had not fallen as dramatically as commonly perceived. In fact, some workers had experienced growing 401(k) account balances even during falling markets. These were, admittedly, mostly employees starting out their savings careers, where contributions are large relative to balances.
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