Burton Malkiel's Random Walk

(Bloomberg View) -- This week on a special rebroadcast edition of our Masters in Business podcast, we speak with Burton Malkiel, economics professor at Princeton University and a leading advocate of index investing. Malkiel is best known for the book “A Random Walk Down Wall Street,” with more than 1.5 million copies sold.

Vanguard Group Chairman and Chief Executive Officer Bill McNabb recently told a conference at the Wharton School at the University of Pennsylvania that the rise of chartered financial analysts (CFAs) has “fueled the growth of low-fee passive funds over actively managed offerings.” Maybe this is coincidental, but maybe not: There are only so many investment opportunities, and all of them are being chased by so many smart, trained professionals. 

What isn't a coincidence is that Malkiel and McNabb share a similar investing philosophy -- Malkiel was a director at Vanguard, an industry leader in index investing, for 28 years. Our conversation covered many topics, including the creation of Malkiel's “blindfolded monkey throwing darts at a newspaper's financial pages,” which demonstrated that success in investing is highly random.

SoundCloud: Replay Interview With Burt Malkiel: Masters in Business (Audio) by Bloomberg View

You can stream the full podcast below, or download it on iTunes, Soundcloud or Bloomberg. All of our earlier podcasts are at iTunes, Soundcloud and Bloomberg.

All of the books referenced are here.

Next week, the return of Ken Fisher of Fisher Investments.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”

To contact the author of this story: Barry Ritholtz at britholtz3@bloomberg.net.

To contact the editor responsible for this story: James Greiff at jgreiff@bloomberg.net.

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