They did not know the technology was bogus.
B. During the 1960's there was a new-issue craze and at the bottom of it was the tronics suffix. Companies that had nothing to do with the electronics industry were adding tronics to their roster and going public. Similar themes can be found in the biotechnology/internet offerings of the 80's and 90's. Simply add a com, tech, net, to your name or make an announcement regarding a potential anything and they will buy! Many of these companies have yet to turn a profit.
C. Just like anything else, the stock market has trends and these trends often influence the prices of securities.
D. There are four fundamental determinants pertaining to stock prices. They are expected growth rate, expected dividend payment, market interest rates, and the degree of risk held by the stock.
Chapters 5 & 6.
A. Technical analysis involves creating and analyzing stock charts. People that do this for a living are called chartists. According to Malkiel, chartists are worthless miserable people. They are worthless because their profession is pointless, and miserable because deep down inside, although they won't admit it, they understand that they are nothing more than erroneous expensive middlemen. Charts/chartists do nothing but try to predict the future using the past.
B. Fundamental analysis uses the four determinants to stock prices to predict future earnings. Malkiel believes that to some degree fundamental analysts are useless but not as useless as chartists.
C. Fundamental and technical analysis are often used together to dissect a stock's past and predict it's future.
D. Malkiel demonstrates the Random Walk theory by using a coin to determine the future of a stock. If the toss was a head the stock went up ½ point and if the toss was tail the stock then went down ½ point. This experiment displays a pattern (similar to any stock) and the chartist is put to shame again.