A Random Walk Down Wall Street Analysis

1268 Words6 Pages
I was a bit sceptical when choosing Burton G. Malkiel’s “A Random Walk Down Wall Street” as my book for my literature review assignment. This book consisted of four hundred and sixty one pages; my life was over, or so I thought. Nevertheless, I began reading it and surprisingly the book was very interesting. I must say that the book was very easy to read, it almost felt like I was in a classroom setting learning new investment terms, concepts and practices. Although there is a lot to talk about I will just highlight the topics that I found most interesting. Malkiel describes “A Random Walk” as one in which future steps or directions cannot be foreseen on thee premise of past actions. Once the term is applied to the stock market, it signifies…show more content…
Reading about the historical monetary crazes which occurred was very interesting to me. The most interesting of them to me was the seventeenth century Tulip -Bulb Craze which occurred in Holland; this led me to do a little research. This particular craze was classified as a hit the jackpot scheme for investors. The tulip-bulbs originally came from Turkey; however they were brought to Leyden by a Veinna professor. The Dutch were delighted by the tulips but unsatisfied with the asking price of the professor. In an effort to take matters into their own hands, the professor’s house was broken into and the tulip- bulbs were stolen and sold at a decreased price. Over time, tulip-bulbs became very popular but at the same time very costly in the Dutch Gardens. Mosaic: a virus that caused tulip petals to develop contrasting coloured stripes or flames, contributed to the crazy assumption about tulip bulbs. The more out of the ordinary the bulb was the greater the cost of owning it was. The more expensive the bulbs became the more people labelled them as wise investments. When some people thought prices couldn’t get any higher there were those who were very desperate to get their hand on tulip- bulbs. People went as far as to barter their personal belongings such as land and furniture to acquire the bulbs that would increase their finances even more. However, just like the South Sea Bubble and the Wall Street Crash of 1929 prices began to decline and eventually returned to normal. This event seemed like an in the heat of the moment situation to me. It was clear that like all humans no one wanted to feel left out and so they did anything to become apart of what they thought of as the trend at

More about A Random Walk Down Wall Street Analysis

Open Document