Business Week magazine trashed the book, and, ever since, experts have debated the Random Walk theory - that investors can't beat the market by studying historical trends in stock prices.
Malkiel's ideas weren't completely original. Academics had bandied them about for years. But by presenting ivy-tower theories in a way the average person could understand, Malkiel contributed to the huge popularity of index funds, which seek not to beat the market but simply to match the returns of broad stock indexes such as the Standard & Poor's 500 or Wilshire 5000.
"His book was sort of a landmark," said John Bogle, founder of Vanguard Group, the Malvern company where Malkiel is a director. "He said there was no point in trying to beat the market, that it was kind of like watching a drunk wander around in a hay field and trying to predict where he would fall."
In May, Malkiel revised A Random Walk for the seventh time. He updated it to include newer investment ideas such as inflation-indexed Treasury bonds (he likes them), and manias such as the Internet craze (a revolutionary industry, but one that will lead many investors to losses, he says).
At first glance, Malkiel, 66, is every bit the buttoned-down former investment banker. On a recent 80-degree day, he wore gray pants, a blue-and-white-striped shirt, and a red-and-blue diagonally striped tie.
His office, however, gave him away as someone who doesn't always stick to the tried and true. Books on winning at the race track sit alongside investing textbooks on his shelves. Stock prices scroll across the bottom of his computer screen.
Burton Malkiel, the man who popularized the idea that no one can beat the market, tries to pick winning stocks.
Heresy?
