A random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

Part Two

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HOW THE PROS PLAY
THE BIGGEST GAME IN
TOWN

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5

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TECHNICAL AND
FUNDAMENTAL
ANALYSIS
A picture is worth ten thousand words.
—Old Chinese proverb
The greatest of all gifts is the power to estimate things at
their true worth.
—La Rochefoucauld, 
Réflexions; ou sentences et maximes
morales
O
N A TYPICAL
trading day, shares with a total

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market value of hundreds of billions are traded on the New
York Stock Exchange, the NASDAQ market, and various
electronic crossing networks across the country. Including
markets for futures, options, and swaps, trillions of dollars of
transactions take place each day. Professional investment
analysts and counselors are involved in what has been called
the biggest game in town.
If the stakes are high, so are the rewards. When Wall Street
is having a good year, new trainees from the Harvard
Business School routinely draw salaries of $200,000 per year.
At the top of the salary scale are the high-profile money
managers themselves—the men and women who run the large
mutual, pension, and trust funds and who manage over $1
trillion of hedge-fund assets. “Adam Smith,” after writing 
The
Money Game
, boasted that he would make a quarter of a
million dollars from his best-selling book. His Wall Street
friends retorted, “You’re only going to make as much as a
second-rate institutional salesman.” It is fair to conclude that,
although not the oldest, the profession of high finance is
certainly one of the most generously compensated.