Now technically, this chapter summary is in itself a summary of provided by Bernstein. For the sake of summarizing the whole book, I will essentially semi-copying what he summarizes for your pleasure.

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CH. IV - The Name of the Game

• Risk & return are linked (the promise of high returns & small risk = fraud).
• To prevent panicking, one needs to learn all about financial market history.
• Gordon Equation. For stocks = growth rate + dividend yield, for bonds = interest rate - default rate
• Don’t be overconfident!
• Diversify.
• There are no patterns.
• Avoid brokers/brokerage houses at all cost.
• Choose fund companies that are nonprofit.
• Save as much as possible.
• It’s not about getting rich but about not dying poor.

And Bernstein ends his fabulously useful book with other books we should probably tackle.

On Theory:

A Random Walk Down Wall Street by Burton G. Malkiel

On History:

Devil Take the Hindmost by Edward Chandellor

On Psychology:

Your Money and Your Brain by Jason Zweig

On Business:

Common Sense on Mutual Funds by Jack Bogle

On Math:

Value Averaging : The Safe and Easy Strategy for Higher Investment Returns by Michael Edleson (foreword by Bernstein!)