A Random Walk Down Wall Street

Book: A Random Walk Down Wall Street
Basic Information : Expectations : Thoughts : Evaluation :  Book References : Good Quotes : Table of Contents : References

Basic Information:

Author: Burton G. Malkiel

Edition: epub on Overdrive from the Fresno County Public Library

Publisher: W. W. Norton Company

ISBN: 1324002182 (ISBN13: 9781324002185)

Start Date: May 5, 2019

Read Date: May 27, 2019

432 pages

Genre: Finance, Personal Growth

Language Warning: None

Rated Overall: 4 ½ out of 5

Expectations:

Recommendation: David and Rachel

When: Winter 2019

How come do I want to read this book: Looking for good investment advice/criteria

Thoughts:

A couple of thoughts:

• Malkiel was employed by Vanguard for 25 years. So a lot of Vanguard’s philosophy follow’s Malkiel. Also there is a certain familiarity which he has with Vanguard.
• There are a couple of charts which I was able to find on the Internet. This is only a small fraction of the book’s charts.
• Other reviews have a lot better summary of each chapter. Look at my References section

Part One Stocks and Their Value

1. Firm Foundations and Castles in the Air

Investing as a Way of Life Today

Definition of investing: a method of purchasing assets to gain profits in the form of reasonably predictable income and/or appreciation over the long term. This is in contrast to speculation which may strive for the same thing, but wants it done in an unreasonable time frame. A speculator buys stocks, hoping for a short-term gain over the next days or weeks.

The Castle-in-the-Air Theory

Basically there is a crowd mentality. You buy a stock because you expect someone to buy it from you at a higher price. So does the next person. Or as the author says it, the “greater fool” theory.

2. The Madness of Crowds

Sounds like our English word “bubble” comes from the Dutch word for “bulb”, like a tulip bulb. The author talks about how the Dutch created a run on tulip bulbs which raised the price of bulbs, until an event caused the market to crash.

Although the castle-in-the air theory can well explain such speculative binges, outguessing the reactions of a fickle crowd is the most dangerous game.

3. Stock Valuation from the Sixties through the Nineties

SEC will not take action concerning the wisdom of a particular venture or the management of a company. It will take action against deception and fraud.

The Nifty Fifty

Stupidity well packaged can sound like wisdom.

What Does It All Mean?

Lessons:

• Price is not only related to value, but to styles and fashions. This makes investing dangerous
• Be wary of hot stocks, particularly IPO’s.

4. The Biggest Bubble of All: Surfing on the Internet

Bubbles seems like they feed on themselves. Starts with some positive news and then build from there. This causes more people to buy which causes more positive. Sort of a legit Ponzi scheme.

The market is more of a weighing mechanism than a voting about what is best.

Every stock can only be worth the present value of the cash flow it is able to earn for the benefit investors. He does not mean that the price of the stock at any one time will be worth the present value, but that over time it will tend towards that.

Investment rick is never clearly perceived, so the appropriate rate at which the future should be discounted is never certain. … No one person or institution consistently knows more than the market.

Part Two How the Pros Play the Biggest Game in Town

5. Technical and Fundamental Analysis

The Technique of Fundamental Analysis

Four determinants of the fundamentals investor:

1. Expected growth rate. How much will a company grow-discussion of compounded rates. This can be an illusion as nothing will continue to grow at a compounded rate.
   1. A rational investor should be willing to pay a higher price to obtain dividends and earnings.
      1. The longer the expected growth, the more the investor should expect to pay.
2. The expected dividend payout. The higher the payout, the more important it is in determining the price.
   1. A rational investor should be willing to pay a higher price for a larger porportion of earnings paid out as dividents
3. The degree of risk. Plays an important role in the stock market
   1. A rational investor should be willing to pay a higher price to for less risk.
4. The level of market interest rates. Can you get a better profit elsewhere?
   1. The lower the interest rates the higher the stock prices

Three Important Caveats

1. Expectations about the future cannot be proven in the here and now. Even with a “proven” formula, there is unknowns which can change things.
2. Precise figures cannot be calculated from undetermined data. In the sciences you can only have the precision of what you are measuring by. So if you do not know the details, then you cannot make a good determination.
3. Growth is uneven or even opposite of the market in a particular case

Using Fundamental and Technical Analysis Together

Rules:

1. Buy only companies that are expecting to have above-average earnings growth for the next 5 or more years. This is the single most important measurement.
2. Never pay more for a stock than its firm foundation of value.
3. Look for stocks whose stories can be said optimistically (castles in the air stocks.) Good psychological elements.

6. Technical Analysis and the Random-Walk Theory

Appraising the Counterattack

The problem with any system is that once there is enough people using it, or the methodology is known, then people will try to game it and buy in advance of a gain. Thus depriving those who were following the system.

7. How Good Is Fundamental Analysis?

Are Security Analysts Fundamentally Clairvoyant?

Earnings are the name of the game and always will be. A proven record, while not a guarantee is usually a good starting point.

Many in Wall Street refuse to accept the fact that no reliable pattern can be discerned from past records to aid the analyst in predicting future growth. He gives the example of IBM. Up until the 1980’s, IBM had a steady climb of growth. Come the revolution in computing, they lost their steam.

8. A New Walking Shoe: Modern Portfolio Theory

Defining Risk: The Dispersion of Returns

Risk is a word used often, but elusive in definition. How likely am I to suffer harm is one definition. Another is the chance of disappointment.

Diversification in Practice

To be diversified, 50 entities seems like it is the golden number, particularly in foreign stock.

9. Reaping Reward by Increasing Risk

10. Behavioral Finance

There are four factors which define irrational market behavior:

• Overconfidence
• Biased judgements
• Herd mentality
• Loss aversion

Arbitrageurs: people who profit from any deviation of market prices from their rational value.

Overconfidence

Investors, [articularly males, have a strong bent to being confident in their own abilities to pick winners. Overestimate knowledge, under estimate risks

The more you trade, the worst results you get.

Biased Judgments

What does randomness look like. He relates a story of a probability teacher who had 19 students in her class try to write down a random sequence of coin flips. She had one person who would flip a coin and write the results. She was able to determine who it was because the coin flipper would be the most “unrandom” sequence of the group. Something like TTHHHHHHHHHTTHHTTTTHH…. Just because prices on Wall Street may be random, they may not look random. There is the thought that eventually a price of a stock will revert to the mean.

Herding

A study cites an experiment where researchers looked at the brain to understand why people follow the lead of others. The take-away they had was that people’s perceptions changed. This was a 2005 study by Gregory Berns.

Because of word of mouth, investors tend to buy at the wrong time to invest.

What Are the Lessons for Investors from Behavioral Finance?

It has been observed that in ameuter tennis, more points are scored because of your opponents mistakes than your own skill.

Does Behavioral Finance Teach Ways to Beat the Market?

The hottest stocks or funds in one period will be the worst performing in the next.

Large market movements encourage buying and selling that are based upon emotion rather than facts and reason.

Buying/selling too much gains you penalties such as tax implications and making changes at the wrong time.

Paper losses are just as real as monetary losses. Investors will sell at a point where they can enjoy the gains they have made. Or sell when they understand the stock is no longer favorable for them.

11. Potshots at the Efficient-Market Theory and Why They Miss

Note: In the epub book, the title of this chapter is “Is ‘Smart Beta’ Really Smart?” I wonder if this is the difference in editions?

He talks about rations to pay attention to.

• As the P/E increases, the return decreases
• Relationship between the ratio of a stock price to its book value-the value of the company’s assets. The lower the ratio, the more tendency for higher returns in the future.
• Note low figures may also show that there are also risk factors which the numbers may not account for.

It is pointed out that certain funds, such as DFA funds, can be simulated by buying standard index funds.

The core advice of this book: every portfolio should consist of low-cost, tax-efficient, broad=based index funds. If you do want to take a chance that some risk factors will generate excess returns in the future, you can do so most prudently if the core of your portfolio consist of capitalization-weighted broad-based index funds. For additional risk, the most efficient/effective way is to purchase a low-cost, capitalization-weighted fund that follows an index of small-cap stocks.

Part Four A Practical Guide for Random Walkers and Other Investors

12. A Fitness Manual for Random Walkers

Exercise 1: Gather the Necessary Supplies

Make sure you are saving from your income before you invest.

Exercise 2: Don't Be Caught Empty-Handed: Cover Yourself with Cash Resources and

Insurance

Need to make sure you have enough resources to weather storms. To the author, this means:

• Cash reserves-around three months in those who are mature
• Insurance
  • Home
  • Health
  • Car
  • Disability
  • Life
    • Prefers renewable term insurance where you do not need a health check up after being accepted initially
  • Insurances should have at least an “A” rating.
• Deferred Variable Annuities-discourages using tese

Remember the overarching rule for achieving financial security: keep it simple. Avoid any complex financial products as well as the hungry agents who try to sell them to you.

Exercise 3: Be Competitive-Let the Yield on Your Cash Reserve Keep Pace with Inflation

Money-Market Mutual Funds

Rule of thumb: The lower the expense, the higher the return

Bank Certificates of Deposit (CDs)

Reserves can be invested in a safe instrument who maturity matches the date where the fund is needed. We should be doing this with our long term expenses.

Exercise 5: Make Sure the Shoe Fits: Understand Your Investment Objectives

Malkiel has something called his sleep chart. This is where he looks at the amount of risk and how nervous it makes you.

Some keys to investing:

• How do you view sharp declines in the market? Do you take impulsive actions?
• How much of your investment goes to taxes?

There is a wide amount of inconsistency without a plan. Where is your focus? Are your investments consistent with your tolerance and with your needs?

Tax-Exempt Bonds Are Useful for High-Bracket Investors

When buying bonds, try to buy those new with at least a Moody or Standard&Poor’s rating of A.

With bonds when interest rates goes up, the worth of the bond goes down. Make sure your bonds have a ten-year call on them

Exercise 8: Tiptoe through the Fields of Gold, Collectibles, and Other Investments

If you are going to invest in collectables, buy those things because you love them, not because you expect them to appreciate in value.

13. Handicapping the Financial Race: A Primer in Understanding and Projecting Returns from Stocks and Bonds

What Determines the Returns from Stocks and Bonds?

In the long run, two things determine the returns on common stocks:

1. Dividend yield when purchased
2. Future growth rate of earnings and dividends.

Long-term equity return = initial dividend yield + growth rate

14. A Life-Cycle Guide to Investing

Malkiel says that the most important investment decision is how to balance assets categories at the different stages of my life. He quotes that 90% of a person’s return is determined by asset allocation with 10% on the success of the investments.

Five Asset-Allocation Principles

• Risk and Reward Are Related
• Your Actual Risk in Stock and Bond Investing Depends on the Length of Time You Hold Your Investment
  • The longer the time period over which you can hold on to your investments, the greater should be the share of common stocks in your portfolio.
  • Corollary: You can only have the greater chance of a good return by holding onto stocks longer.
    • He is talking 25-30 years.
    • Younger people should have a greater proportion of their portfolio in stocks than older.
• Dollar-Cost Averaging Can Reduce the Risks of Investing in Stocks and Bonds
• Rebalancing Can Reduce Investment Risk and Possibly Increase Returns
• Distinguishing between Your Attitude toward and Your Capacity for Risk

Never take on the same risks in your portfolio that attach to your major source of income.

Three Guidelines to Tailoring a Life-Cycle Investment Plan

• Specific Needs Require Dedicated Specific Assets
• Recognize Your Tolerance for Risk
• Persistent Saving in Regular Amounts, No Matter How Small, Pays Off

The Life-Cycle Investment Guide

What is Total Stock Market index fund? Apparently this is a Vanguard fund-or at least similar to one which Vanguard markets.

Investing a Retirement Nest Egg

Two alternative strategies to ensure you have enough money to last you:

1. Annuitize all/part of the nest egg
2. Can hold the investment portfolio and withdraw at a rate to make sure you do not run out.

Annuities

Sturgeon’s Law: 95% of everything you hear or read is crap.

Malkiel does not believe in sinking all of your nest egg into annuities. But thinks that a partial investment can make sense. Comparison shop at www.valic.com

The Do-It-Yourself Method

Malkiel indicates that you should not spend more than 4% of the nest egg. This is adjustable. The reason for 4% is that On the average, your returns will be 7% annual while a diverified bond will be around 4%. An average of 5½% return. Inflation has been running about 1½%. So you count off inflation from 5 ½% and you get 4%. If inflation goes higher, then you need to back away from what you withdraw from the nest egg.

When tapping resources, try to keep the investment ratio you want between conservative and riskier assets.

15. Three Giant Steps Down Wall Street

How do you buy stocks?

1. No-Brainer-through indexed mutual funds
2. Do-It-Yourself-Pick your own stocks and go through a broker
3. Substitute-Player-use an advisor or manager

A Broader Definition of Indexing

There are many indexes besides the S&P or Dow Jones

• S&P 500-the major companies in the US Market. About ¾ of all common stocks
• Russell 3000-contains all but the smallest stocks
• Wilshire 5000 Total Market Index-all publically traded US Common stock
• CRSP Index
• MSCI US Broad Market Index (Morgan Stanley Capital International)-contains all but the smallest stocks

He favors in an index which has a broader representation than the S&P 500. He prefers those which fall under the Total Stock Market Index funds (not just Vanguard).

One of the biggest mistakes is to hold only US Stocks.

The Do-It-Yourself Step: Potentially Useful

Recommended reading list:

• New York Times-daily
• Wall Street Journal-daily
• Barrons-weekly
• Bloomberg Businessweek-weekly
• Fortune-
• Forbes-
• Standard&Poor’s Outlook
• Value Line Investment Survey

Four rules for successful stock selection:

• Confine stock purchases to sustain above-average earnings growth for at least five years. Earnings growth is the name of the game
• Never pay more for a stock than can be reasonably be justified by form foundation of value. Such as look at price-earnings ratio’s. OK to buy a slightly higher price P/E stock as long as you are getting higher earnings growth expectations.
• Buy stocks which can have stories which generate castles in the air hype.
• Trade as little as possible. Examine you portfolio. He looks at his portfolio towards the end of a year and see which ones are losers and sells those

In mutual funds, he does not buy from funds where the expense ratio is more the 0.% and with turnover more than 50%. Look at the web or Morningstar

The Malkiel Step

I do not understand his thoughts on closed-end funds. Closed-end funds do not accept new money. So he wants you to by discounted shares in closed end funds. He also thinks that the pickings a minimal at this time.

A Paradox

He notes that with the efficient market condition, that any news will be quickly dispersed and that prices will take into account new news. So it is hard to get ahead, except for insider news.

Evaluation:

 This is a book which I should have read 40 years ago at the age of 25. Malkiel goes through popular ways to game the stock market and shows how they will ultimately fail as a means to produce long term returns. His hypothesis is that the best way is not to play the market, but to accept that the market has its own wisdom and will give you the best returns.

The first three parts reviews various ways which people have tried to best the market. Malkiel’s answer: none can do it for long. Even those who are good managers will eventually fail. Only a few have been able to keep their winning ways throughout their careers-Lynch and Buffet come to mind, not many others.

What is Malkiel’s answer? That mostly comes in Part IV, but is talked about in a few places throughout the book. It comes in four ways: Be in the market for the long-term; Buy reasonably priced assets; If you cannot beat the market, at least stay with the market through index funds; and lower the costs of investment-do not trade often.

Malkiel explains jargon. He also talks about both hypothetical and real-life examples of things working and things not working. It is a pretty readable book. The only thing is that he does tend to be a bit repetitive. But I suppose that is to make sure people like me understand what is important. P.S. Even now, it is not too late to have read this book.

 

Book References:

• The Theory of Investment Value by John B. Williams - presented a formula for determining the intrinsic value of a stock
• Security Analysis by Benjamin Graham and David Dodd- buy undervalued stock/sell overvalued
• The General Theory of Employment, Interest and Money by John Maynard Keynes
• Irrational Exuberance by Robert Shiller
• The Crowd: A Study of the Popular Mind by Gustave Le Bon
• Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay
• The South Sea Bubble by John Carswell
• Once in Golconda by John Brooks
• The Great Myths of 1929 by Harold Bierman Jr
• Making It In America by Barry Minkow - story of a fraudulent boy wonder
• Cleaning Up and Down, But Not Out by Barry Minkow - religious
• Technical Analysis of Stock Trends by John Magee
• Bulls, Bears and Dr. Freud by Don D, Jackson and Albert Haas, Jr
• Where Are the Customers’ Yachts? By Fred Schwed, Jr.
• The Intelligent Investor by Benjamin Graham
• A Non-Random Walk Down Wall Street by A. Craig MacKinlay
• Beating the Dow by Michael O’Higgins
• The Incredible January Effect by Robert A. Haugen
• The Beardstown Ladies Common-Sense Investment Guide
• Master Trader by Laszlo Birinyi
• Flash Boys
• Portfolio Selection by Harry Markowitz
• In Search of Excellence by Tom Peters and Waterman
• Winning the Loser’s Game by Charles Ellis

Good Quotes:

• First Line: It has now been over forty years since the first edition of A Random Walk Down Wall Street.
• Last Line: It may be worth checking, however, to see whether discounts widen in the future during unsettled market conditions.
• In crowds it is stupidity and not mother wit that is accumulated. Gustave Le Bon, The Crowd: A Study of the Popular Mind, pg 33
• Stupidity well packaged can sound like wisdom. Chp 3
• It’s far more profitable to sell advice than to take it. Steve Forbes quoted in chapter 10, Behavior Finance

Table of Contents:

• Contents
• Preface
• Acknowledgments from Earlier Editions
• Part One Stocks and Their Value
  • 1. Firm Foundations and Castles in the Air
    • What Is a Random Walk?
    • Investing as a Way of Life Today
    • Investing in Theory
    • The Firm-Foundation Theory
    • The Castle-in-the-Air Theory
    • How the Random Walk Is to Be Conducted
  • 2. The Madness of Crowds
    • The Tulip-Bulb Craze
    • The South Sea Bubble
    • Wall Street Lays an Egg
    • An Afterword
  • 3. Stock Valuation from the Sixties through the Nineties
    • The Sanity of Institutions
    • The Soaring Sixties
    • The New "New Era": The Growth-Stock/New-Issue Craze
    • Synergy Generates Energy: The Conglomerate Boom
    • Performance Comes to the Market: The Bubble in Concept Stocks
    • The Sour Seventies
    • The Nifty Fifty
    • The Roaring Eighties
    • The Triumphant Return of New Issues
    • Concepts Conquer Again: The Biotechnology Bubble
    • ZZZZ Best Bubble of All
    • What Does It All Mean?
    • The Nervy Nineties
    • The Japanese Yen for Land and Stocks
  • 4. The Biggest Bubble of All: Surfing on the Internet
    • How Bubbles Arise
    • A Broad-Scale High-Tech Bubble
    • An Unprecedented New-Issue Craze
    • TheGlobe.com
    • Security Analysts $peak Up
    • New Valuation Metrics
    • The Writes of the Media
    • Fraud Slithers In and Strangles the Market
    • Should We Have Known the Dangers?
    • A Final Word
• Part Two How the Pros Play the Biggest Game in Town
  • 5. Technical and Fundamental Analysis
    • Technical versus Fundamental Analysis
    • What Can Charts Tell You?
    • The Rationale for the Charting Method
    • Why Might Charting Fail to Work?
    • From Chartist to Technician
    • The Technique of Fundamental Analysis
    • Three Important Caveats
    • Why Might Fundamental Analysis Fail to Work?
    • Using Fundamental and Technical Analysis Together
  • 6. Technical Analysis and the Random-Walk Theory
    • Holes in Their Shoes and Ambiguity in Their Forecasts
    • Is There Momentum in the Stock Market?
    • Just What Exactly Is a Random Walk?
    • Some More Elaborate Technical Systems
    • The Filter System
    • The Dow Theory
    • The Relative-Strength System
    • Price-Volume Systems
    • Reading Chart Patterns
    • Randomness Is Hard to Accept
    • A Gaggle of Other Technical Theories to Help You
    • Lose Money
    • The Hemline Indicator
    • The Super Bowl Indicator
    • The Odd-Lot Theory
    • A Few More Systems
    • Technical Market Gurus
    • Why Are Technicians Still Hired?
    • Appraising the Counterattack
    • Implications for Investors
  • 7. How Good Is Fundamental Analysis?
    • The Views from Wall Street and Academia
    • Are Security Analysts Fundamentally Clairvoyant?
    • Why the Crystal Ball Is Clouded
      • 1. The Influence of Random Events
      • 2. The Production of Dubious Reported Earnings through "Creative" Accounting Procedures
      • 3. The Basic Incompetence of Many of the Analysts Themselves
      • 4. The Loss of the Best Analysts to the Sales Desk, to Portfolio Management, or to Hedge Funds
      • 5. The Conflicts of Interest between Research and Investment Banking Departments
    • Do Security Analysts Pick Winners?-The Performance of the Mutual Funds
    • Can Any Fundamental System Pick Winners?
    • The Verdict on Market Timing
    • The Semi-strong and Strong Forms of the Efficient-Market Theory
    • The Middle of the Road: A Personal Viewpoint
• Part Three The New Investment Technology
  • 8. A New Walking Shoe: Modern Portfolio Theory
    • The Role of Risk
    • Defining Risk: The Dispersion of Returns
    • Illustration: Expected Return and Variance Measures of Reward and Risk
    • Documenting Risk: A Long-Run Study
    • Reducing Risk: Modern Portfolio Theory (MPT)
    • Diversification in Practice
  • 9. Reaping Reward by Increasing Risk
    • Beta and Systematic Risk
    • The Capital-Asset Pricing Model (CAPM)
    • Let's Look at the Record
    • An Appraisal of the Evidence
    • The Quant Quest for Better Measures of Risk: Arbitrage Pricing Theory
    • A Summing Up
  • 10. Behavioral Finance
    • The Irrational Behavior of Individual Investors
    • Overconfidence
    • Biased Judgments
    • Herding
    • Loss Aversion
    • The Limits to Arbitrage
    • What Are the Lessons for Investors from Behavioral Finance?
    • Does Behavioral Finance Teach Ways to Beat the Market?
  • 11. Potshots at the Efficient-Market Theory and Why They Miss
    • What Do We Mean by Saying Markets Are Efficient?
    • Potshots That Completely Miss the Target
    • Dogs of the Dow
    • January Effect
    • "Thank God It's Monday Afternoon" Pattern
    • Hot News Response
    • Why the Aim Is So Bad
    • Potshots That Get Close but Still Miss the Target
    • The Trend Is Your Friend (Otherwise Known as Short-Term Momentum)
    • The Dividend Jackpot Approach
    • The Initial P/E Predictor
    • The "Back We Go Again" Strategy (Otherwise Known as Long-Run Return Reversals)
    • The Smaller Is Better Effect
    • The "Value Will Win" Record
    • Stocks with Low Price-Earnings Multiples Outperform Those with High Multiples
    • Stocks That Sell at Low Multiples of Their Book Values
    • Tend to Produce Higher Subsequent Returns
    • But Does "Value" Really Trump Growth on a Consistent Basis?
    • Why Even Close Shots Miss
    • And the Winner Is . . .
    • The Performance of Professional Investors
    • A Summing Up
• Part Four A Practical Guide for Random Walkers and Other Investors
  • 12. A Fitness Manual for Random Walkers
    • Exercise 1: Gather the Necessary Supplies
    • Exercise 2: Don't Be Caught Empty-Handed: Cover Yourself with Cash Resources and Insurance
      • Cash Reserves
      • Insurance
      • Deferred Variable Annuities
    • Exercise 3: Be Competitive-Let the Yield on Your Cash Reserve Keep Pace with Inflation
      • Money-Market Mutual Funds
      • Bank Certificates of Deposit (CDs)
      • Internet Banks
      • Treasury Bills
      • Tax-Exempt Money-Market Funds
    • Exercise 4: Learn How to Dodge the Tax Collector
      • Individual Retirement Accounts
      • Roth IRAs
      • Pension Plans
      • Saving for College: As Easy as 529
    • Exercise 5: Make Sure the Shoe Fits: Understand Your Investment Objectives
    • Exercise 6: Begin Your Walk at Your Own Home-Renting Leads to Flabby Investment Muscles
    • Exercise 7: Investigate a Promenade through Bond Country
      • Zero-Coupon Bonds Can Generate Large Future Returns
      • No-Load Bond Funds Are Appropriate Vehicles for Individual Investors
      • Tax-Exempt Bonds Are Useful for High-Bracket Investors
      • Hot TIPS: Inflation-Indexed Bonds
      • Should You Be a Bond-Market Junkie?
    • Exercise 8: Tiptoe through the Fields of Gold, Collectibles, and Other Investments
    • Exercise 9: Remember That Commission Costs Are Not Random; Some Are Cheaper than Others
    • Exercise 10: Avoid Sinkholes and Stumbling Blocks: Diversify Your Investment Steps
    • A Final Checkup
  • 13. Handicapping the Financial Race: A Primer in
    • Understanding and Projecting Returns from Stocks and Bonds
    • What Determines the Returns from Stocks and Bonds?
    • Three Eras of Financial Market Returns
    • Era I: The Age of Comfort
    • Era II: The Age of Angst
    • Era III: The Age of Exuberance
    • The Age of the Millennium
  • 14. A Life-Cycle Guide to Investing
    • Five Asset-Allocation Principles
      • 1. Risk and Reward Are Related
      • 2. Your Actual Risk in Stock and Bond Investing Depends on the Length of Time You Hold Your Investment
      • 3. Dollar-Cost Averaging Can Reduce the Risks of Investing in Stocks and Bonds
      • 4. Rebalancing Can Reduce Investment Risk and Possibly Increase Returns
      • 5. Distinguishing between Your Attitude toward and Your Capacity for Risk
    • Three Guidelines to Tailoring a Life-Cycle Investment Plan
      • 1. Specific Needs Require Dedicated Specific Assets
      • 2. Recognize Your Tolerance for Risk
      • 3. Persistent Saving in Regular Amounts, No Matter How Small, Pays Off
    • The Life-Cycle Investment Guide
    • Life-Cycle Funds
    • Investment Management Once You Have Retired
    • Inadequate Preparation for Retirement
    • Investing a Retirement Nest Egg
    • Annuities
    • The Do-It-Yourself Method
  • 15. Three Giant Steps Down Wall Street
    • The No-Brainer Step: Investing in Index Funds
    • The Index-Fund Solution: A Summary
    • A Broader Definition of Indexing
    • A Specific Index-Fund Portfolio
    • ETFs and the Tax-Managed Index Fund
    • The Do-It-Yourself Step: Potentially Useful
    • Stock-Picking Rules
      • Rule 1: Confine stock purchases to companies that appear able to sustain above-average earnings growth for at least five years
      • Rule 2: Never pay more for a stock than can reasonably be justified by a firm foundation of value
      • Rule 3: It helps to buy stocks with the kinds of stories of anticipated growth on which investors can build castles in the air
      • Rule 4: Trade as little as possible
    • The Substitute-Player Step: Hiring a Professional Wall Street Walker
    • The Morningstar Mutual-Fund Information Service
    • A Primer on Mutual-Fund Costs
      • Loading Fees
      • Expense Charges
      • Turnover Costs
      • The 50-50 Rule
    • The Malkiel Step
    • A Paradox
    • Some Last Reflections on Our Walk
    • A Random Walker's Address Book and Reference Guide to Mutual Funds
• Index

References:

• Publisher's Web Site for Book
• Author's Web Site
• Wikipedia-Book
• Wikipedia-Author
• Amazon-Book
• Amazon-Author
• Barnes and Noble
• GoodReads-Book
• GoodReads-Author
• New York Times Review
• NPR Review
• Simple Dollar review - gives a chapter by chapter synopsis of Malkiel’s thoughts.
• Investopia review

The Ravenmaster- My Life with the Ravens at the Tower of London

Book:  The Ravenmaster- My Life with the Ravens at the Tower of London
Basic Information : Synopsis : Characters : Expectations : Thoughts : Evaluation : Book Group : New Words : Book References : Good Quotes : Table of Contents : References

Basic Information:

Author: Christopher Skaife

Edition: epub on Overdrive from the San Francisco Public Library

Publisher: HarperCollins Publishers

ISBN: 1443455938 (ISBN13: 9781443455930)

Start Date: May 25, 2019

Read Date: May 28, 2019

256 pages

Genre: Biography

Language Warning: None

Rated Overall: 3½ out of 5

History:3 out of 5

Synopsis (Caution: Spoiler Alert-Jump to Thoughts):

Christopher Skaife is the Ravenmaster at the Tower of London. He talks about what does this mean-he and his team takes care of seven ravens, which depending on which tradition you go by starts in the mid 1800’s or the 1400’s. Either way, the legend has it that if the ravens , and there must be at least six of them, leave the Tower of London, the kingdom will collapse.

Skaife talks about his background and why he joined the army. He walks through the discipline he learned and then the requirements to be part of the Guard at the Tower of London.

He then talks about the ravens. First there is the individual ravens and their characteristics. But also ravens in general, as well as his philosophy of care. Of course there are numerous stories of the ravens and their escapades.

Cast of Characters:

• Christopher Skaife-author, former army Drum Major, Yeoman Warder, Ravenmaster
• Ravens:
  • Munin-female. Started in May 1995 Oldest raven in the tower. Named after Odin’s ravens in Norse mythology
  • Merlina-female. Started May 2007. Originally thought she was a male (Merlin).
  • Erin-female. Started in 2006. Not named after Ireland
  • Rocky-male. Started in July 2011. Named after a former Ravenmaster.
  • Jubilee II-male. Started in May 2013. Named because of the Queen’s Jubilee.
  • Gripp II-male. Started in May 2013.
  • Harris-male. Started May 2016

There was once a Tower raven named Ronald Raven.

Expectations:

Recommendation: OSHER Book Group

When: May 2019

Date Became Aware of Book: May 2019

How come do I want to read this book: Part of the OSHER Book Group Fall 2019 reading list

What do I think I will get out of it? Unknown

Thoughts:

Silhouette

Ravenmaster

Skaife points out that it is common to say that every man’s home is his castle. In his case, it really is a castle.

He then goes on and talks about the history of the Tower of London. From its inception as a statement of power and conquest to being a palace and a prison.

Skaife feels privileged that he has been in close contact with the ravens. In learning about the ravens, I’ve learned to listen, to observe, and to be still. The ravens have been my teachers and I have been their pupil.

Skaife’s goal for the book is that in reading this book you too will become fascinated [with birds].

The rules

• DO NOT hurry the ravens
• DO NOT attempt to change the pecking order
• DO NOT try to cut corners
• DO remain calm at all times
• DO allow the ravens to follow the same routine every day
• DO prepare for chaos if you break any of the above rules.

Roll call

Bird life

Tower Green

He has a ten point check off list for caring for the ravens. Nothing exotic, really pretty mundane. But he describes even just filling the water bowls as part of his quiet time. It allows him to think about his day. This is a good example. There is nothing to mundane in our lives which cannot be filled with thoughts of God.

He thinks that the Tower of London is not only a set of buildings, but a storehouse of people's imagination. The ravens are the guardians. It also is the place people live- there are births and burials, weddings and executions.

On his keychain is a skull a cross bones-a reminder of death

Biscuits and blood

in the military you learn the wisdom of routine. Also of doing things right. (As a note: read Endurance by Scott Kelly right after this. This is close to what Kelly figured out when he joined the military.)

The raven team keeps a calendar which has the dates of important tasks and events. But they also keep a logbook. It allows the whole team to keep abreast of what is happening. Sort of like in our fire lookouts. Or what we did at work in Operations.

What medical or musical purposes do raven feathers have?

Yeoman warders are also called Beef Eaters. but prefer the term yeoman warder.

The Menagerie

ravenmaster-zookeeper of only single-species open-air zoo.

The Blackbirds

Sometimes the only way to learn the character of a person is to be thrown into a challenge.

The raven spreads his wings

Skaire knows the patterns of his bird's f)light. he says they all look the same until you slow down their flight on your minds eye.

Sounds like the challenge with ravens is similar to the challenge of child-rearing. How to allow the maximum amount of freedom without total escape. That sort of says you are in control. At least in child-raising that is illusional. With ravens, he tries to do a minimal wing clipping.

Traditions are to be kept, but in keeping with current standards and needs.

Citizens of the world

You can find ravens almost anyplace in place in the world. During the 1800's there was an effort to exterminate them from England

The story

There is a standard story told by the guides. They must have it memorized and it is about an hour long. But once down, they can add parts and pieces to it to make it more interesting. He comments that there must be a satisfying shape to the story when told. Interesting term. Must remember that in my talks.

Application

He comments that a lot of ex-military cannot live with life outside of the military. To him, being with the ravens was his salvation.

Ravens are creatures of habit. Any disturbance causes stress.

Speaking in Ravenish

orvus corax-from greek:korax, meaning croaker

The Miwok Indians took the raven as a symbol of the trickster

Ravens communicate by their voice, tones and inflections, as well as body language. Pointing the beak is one thing. They can also mimic other noises.

Always remember: ravens are watching you.

Skaire feels that it is taking away from the ravens teaching them tricks, such learning how to talk. Animals are not toys.

Bird brains

Ravens are smart enough to operate in military fashion. They will lure a pigeon into a trap.

Ravenology

He has acquired a whole collection of raven books, articles, stories and artifacts. Skaife considers himself an amateur. They are paradoxical. Ravens can be evil as well as good. An animal waited on by humans.

The legend of the ravens at the Tower

The legend has it that the ravens were in the tower starting in the 1400's and that without them the kingdom would fail. no proof of the start of this legend.

It is possible that the observatory at Greenwich was established to escape the ravens.

Blood swept lands and seas of red

The basic disciplines teach you the art of being intensely observant. He shows how everything being perfect for inspections caused you to recognize when things were out of place. This transferred to the importance of cleaning cages. He makes sure the cages are clean, fit and ready to be used

My mistress' eyes are raven black

One of the ravens fell in love with a metal monkey. She would go and talk with it each day, giving it food. one day she gave up. His comment is there is a mystery of love and loss.

Death and the raven

Ravens seem to always be around death. Several battlefields are called "ravenstone." Ravens have been known to devour anything from worms to whales.

Lesson: Think before you act.

And so to bed

Anthropomorphizing will get you into trouble. Animals may mimic human characteristics, but they are not human.

Great traditions

Whoever you are, wherever you are, whatever you do in life, you have to learn to adapt.

Sentinels of the White Tor

Ravenmasters in the past would try to keep their trade a secret. Skaife feels that he needs to have people understand what the ravens are all about. I suppose, hence this book.

His philosophy: animals are individuals just like us and they deserve to be treated with respect.

Evaluation:

 Lets approach this review with what the book does not claim to be: a scientific study of ravens, nor a history ravens, nor a cultural rendering of the importance of ravens. Even though the book does touch on all of those things.

It is an autobiography of a man who seemed destined to drift through life, but grew up through his time in the military to become a Yeoman Warder at the Tower of London and to be the chief carer of its ravens. The RavenMaster. A dream job if there ever was one. But there is more here than just an autobiography.

Sure, Skaife goes through his life story and talks about what being in the military meant for him. How even the mundane tasks were there for the purpose of shaping a person. If you were

Inclined to this regime, you could become an outstanding person.

As the Ravenmaster, he has taken the skills of observation he learned in the military to learn from the ravens. He goes through their schedules, their mannerisms, and their needs. He makes it so that you want to visit the Tower if for no other reason than to see the ravens for yourself.

Skaife’s writing is told in interesting, but common speech manner. You can quickly read and enjoy the story. But this is not one of those books where you enjoy the words, but the images.

The ravens are still at the Tower of London. So the Kingdom has not fallen, even with Brexit, and will not fall as long as their are ravens in the Tower.

 
Notes from my book group:

OSHER Book Club: December 2019

Skaife gives us rules for caring for ravens in chapter 3. How does he illustrate what happens if the rules are not followed? Are there similar rules for being in relationship with people? Or are our rules similar to ravens?

Many of these questions are either from or adapted from LitLovers.

• Why the Ravenmaster is appropriate title for the book?
• Does this story work as an autobiography?
• Did the ending seem fitting? Satisfying? Predictable?
• Every story has a world view. Were you able to identify this story’s world view? What was it? How did it affect the story?
• In what context was religion talked about in this book?
• Why do you think the author wrote this book? (reading this book you too will become fascinated [with birds].) Do you think he accomplished his goal with you?
• What would you ask the author if you had a chance?
• What “take aways” did you have from this book?
• What central ideas does the author present?
• Describe the culture talked about in the book.
  • How is the culture described in this book different than where we live?
  • What economic or political situations are described?
  • Does the author examine economics and politics, family traditions, the arts, religious beliefs, language or food?
• How did this book affect your view of the world?
  • What questions did you ask yourself after reading this book?
• Talk about specific passages that struck you as significant—or interesting, profound, amusing, illuminating, disturbing, sad...?
  • What was memorable?

New Words:

• memento mori: a Latin phrase meaning 'remember you must die'.
• passerine (used with birds): relating to or denoting birds of a large order distinguished by feet that are adapted for perching, including all songbirds
• neophobic-needing ritual, having an extreme or irrational dislike of anything new or unfamiliar.
• tabard: a sleeveless jerkin consisting only of front and back pieces with a hole for the head.
• Syrinx: the lower larynx or voice organ in birds, situated at or near the junction of the trachea and bronchi and well developed in songbirds.

Book References:

• Survey of London by John Stow
• A Song of Fire and Ice by George R. R. Martin-references the name Bran which means raven
• History of England bt Thomas Macauley
• Domesday Book
• daphne du maurier which the movie The Birds was based upon
• Birds of the Western Paleartic
• Birds of the British Isles by Bannerman
• The Raven: A Natural history in Britain and Itreland by Derek Rickman
• The Raven's Nest by John Clare
• desert Notes: Reflections in the Eye of a Raven by Barry Lopez
• Barnaby Ridge by Charles Dickens
• The Snow Queen by Hans Christian Andersen
• Bird Brain by Nathan J Emery
• Naturalis Historia (Of Natural History) by Pliny rhe Elder
• Mind of the Raven by Bernd Heinrich
• Authorized Guide to the Tower of London by W.J. Loftie
• The Tower of London byWilliam Benham
• Her Majesty's Tower of London by Colonel E.H.Carkeet-James
• London Town by Felix Leigh
• Birds in London by W.H. Hudson
• The Tower from Within by Major-general Sir George Younghusband
• A Short History of the Tower of London by Major-general Sir George Younghusband
• Ravens in Winter by Bernd Heinrich
• The Faerie Queen by Edmund Spencer
• Macbeth by William Shakespeare
• Julius Casear by William Shakespeare
• The Green Crow by Sean O'Casey
• Game of Thrones by George R. R. Martin
• The Complete Jane Austen
• Truman Capote
• The Old Curiosity Shop by Charles Dickens
• David Copperfield by Charles Dickens
• Great Expectations by Charles Dickens
• Bird Life and Bird Lore by Reginald Bosworth Smith
• Ghosts of the Tower of London by Geoffrey "Bud" Abbott

Good Quotes:

• First Line: It’s 0530.
• Last Line: They rise above it still.
• Lesson: Think before you act. chp 24-Death and the Ravens

Table of Contents:

• Silhouette
• Ravenmaster
• The rules
• Roll call
• Bird life
• Tower Green
• Biscuits and blood
• The menagerie
• Black birds
• The raven spreads his wings
• The great escape
• Resistance to interrogation
• Citizens of the world
• Double hatting
• The story
• Application
• Speaking in Ravenish
• Bird brains
• Ravenology
• The legend of the ravens at the Tower
• Blood swept lands and seas of red
• My mistress' eyes are raven black
• Birds and books
• Death and the raven
• The ghosts of my life
• And so to bed
• Great traditions
• Sentinels of the White Tor
• Rising above.

References:

• Publisher's Web Site for Book
• Author's Web Site
• Wikipedia-Author
• Amazon-Book
• Amazon-Author
• Barnes and Noble
• GoodReads-Book
• GoodReads-Author
• NPR Review
• The Guardian’s review
• Atlas Obscura
• Publisher’s Weekly review
• Mental Floss - 13 points from the RavenMaster 
  The Atlantic review