MIB: Burton Malkiel on Dart Throwing Monkeys

This week on a special rebroadcast edition of our Masters in Business podcast, we speak with Burton Malkiel, chairman’s professor of economics at Princeton University, and is a two-time chairman of the economics department.[i] Malkiel is best known for A Random Walk Down Wall Street, with over 1.5 million copies sold.

Vanguard Group’s Chairman and CEO, Bill McNabb recently toldconference 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.” The rise in CFAs may have created “an increasingly crowded space of professionals all trying to beat the market” – what Michael Mauboussin calls the “paradox of skill.” Perhaps the correlation between the number of CFAs and the popularity of indexing is a partial cause, or perhaps its entirely coincidental.

What is not a coincidence is that Malkiel and McNabb sharing a similar investing philosophy – Malkiel was a director at the Vanguard Group for 28 years. Our conversation covered many topics, including the creation of Malkiel’s “blindfolded monkey throwing darts at a newspaper’s financial pages.”

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

All of the books referenced are here.

Next week, the return of Ken Fisher of FI.

 

 

 

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[i] Professor Malkiel also served as a member of the Council of Economic Advisers (1975–1977), president of the American Finance Association (1978), and Dean of the Yale School of Management (1981–1988).

 

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