Chapter 18

Investing at Random and with the Intellectuals

In This Chapter

arrow Choosing shares with the pin-in-the-newspaper approach

arrow Examining the fund managers’ worth

arrow Looking at the limits of random choice

arrow Evaluating Modern Portfolio Theory

arrow Understanding high-frequency trading

Don’t worry about the title of this chapter. You don’t have to have worked through Aristotle or Einstein or Freud, or worried about the point of life with the French writers of the 1950s (although Existentialism For Dummies is a really good read). Instead, this chapter looks at how some of the leading investment brains in the world view the subject and what you can do with their knowledge.

You don’t have to follow these intellectuals’ thoughts. But you do need to know what they think so you can better understand the investment process and how it affects your savings. It doesn’t matter whether these theories are right or wrong now. They’ll have been right at some stage and they have a huge influence on the way ...

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