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Originally Posted by elainevdw  Hm, a day or two after reading Rich Dad, I've started getting comments from all sorts of people about its worth (or lack thereof)! Oh well, guess it's a hallmark of me being a newb. The interesting thing is that Reed says it makes education sound less valuable than it really is, when the entire book is an argument on reforming what schools teach about finance. To be honest, it mostly reinforced in my mind information from articles like Steve's treatsie on why having a job is stupid, and why you should create multiple streams of passive income for security.
On the topic of books, what's with A Random Walk, anyway? People recommend it and shoot it down all in one breath. I was surprised to hear that it actually has a counter-book: A Non-Random Walk... |
The Random Walk Theory says that all Wall Street price action is random so there is no way to to CONSISTENTLY be profitable trading stocks, which means that all the people who have made seven figure incomes trading securities just got lucky day in and day out. Knowing traders who make seven figure incomes, who CONSISTENTLY make 10-20 *thousand* dollars a day, and have a 95% win rate over a sample of hundreds and hundreds of trades, I don't see how anyone could believe it.
Then you get into watching the markets, and it's obvious that they move in *predictable* waves which follow along certain retracements. You'll see an impulse wave, pullback to about .382 of that move, bigger third wave, another retracement, to either .382 or .618, and weaker 5th wave move as people try to push the market after it's already exhausted. Then it goes into a larger 3-5 wave retracement of the entirety of that first 5 wave setup (A), and the retracement of A (B) will then often lead into a third wave in the direction of A, or B will turn into a full 5 wave move of its own. That was a really crude explanation, but Elliot Wave Theory is incredible when you get into it, in one book about it Elliot Wave Principle, written in around ~82, they successfully predicted the `87 crash, and in each reprint from 82 to 87 they added more evidence based on Elliot Wave Theory. Honestly, anyone who believes in Random Walk just hasn't done their homework.