A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Twelfth Edition)

Caveat 1: Expectations about the future cannot be proven in the present.

Rule 4: A rational investor should pay a higher price for a share, other things equal, the lower the interest rates.

Caveat 2: Precise figures cannot be calculated from undetermined data.

Mathematicians call a sequence of numbers produced by a random process (such as those on our simulated stock chart) a random walk.

Rule 2: Never pay more for a stock than its firm foundation of value.

Rule 1: Buy only companies that are expected to have above-average earnings growth for five or more years.

Caveat 3: What’s growth for the goose is not always growth for the gander.

It is intrinsically impossible to calculate the intrinsic value of a share.

Rule 3: Look for stocks whose stories of anticipated growth are of the kind on which investors can build castles in the air.