MAIN IDEA
This is basically affirmation of week form of efficient market theory. In strong form theory states that all existing information is immediately incorporated into pricing of securities and therefore it is not possible to beat market. Based on empirical evidence collected over last couple centuries it does not sound as correct statement. The week form of the theory does not claim market perfection; it rather limits itself to claiming market unpredictability. Again based on empirical evidence and unaccountable numbers of individuals who lost money trying to predict market movements, it sounds like a pretty correct statement.

In addition to review of different approaches to securities market: castles in the air and bubbles; technicians and fundamentalists; risk / reward ratios; this books provide quite commonsensical advice on investment in securities market correlative with individual’s life cycle and objectives.
DETAILS:
Part One: STOCKS AND THEIR VALUE
1. FIRM FOUNDATIONS AND CASTLES IN THE AIR
Investing is a necessary part of life for everybody who does not want to lose wealth to inflation at minimum or is capable to increase wealth at maximum. A very nice table is provided to illustrate this thesis by comparing prices in 1962 to prices in 2010 (average increase 10-15 times). Two types of investment theory reviewed – firm foundation which states that securities have intrinsic value based on fundamentals of underplaying businesses; and The Castle in the Air theory which states that all depends on perception of investors and securities prices moved by passions and human psychology.
2. THE MADNESS OF CROWDS
This chapter dedicated to review of long history of investment bubbles confirming validity of the castle in the air approach. It starts with famous Tulip bubble 1633 – 1637 and ends with stock market bubble preceding great depression of 1922-1929

3. SPECULATIVE BUBBLES FROM THE SIXTIES INTO THE NINETIES
The bubbles review continues with review of New Issue / Growth stock craze of 1960s when in 3 years 1959-1962 more new issues were created then ever before. The next was Conglomerate boom of mid 60s when conglomeration of various companies allowed increase shares price / earnings evaluation by bringing up lower priced parts of conglomeration to the level of higher priced. After crash of conglomerates the next magic was created by “performance” this time representing mutual-fund investment into “concept” companies, which really did not produce anything real, but represented a great idea of something. The pick of this phase was achieved in 1968. The next was psychologically well-motivated return to “sound” investment in Nifty-Fifty big specialized companies such as IBM or McDonalds. As usual even with if these companies did produced real goods and services it was quite possible to pump enough money into them to go through High up / Low down bubble cycle. For example McDonalds P/E was 83 in 1972 and 9 in 1980.
From 1983 it were High-tech stocks going through IPOs especially in Biotechnology in the mod 80s and Internet in mid 90s. In between in was boom/bust cycle in Japanese Yen and Land.
4. THE EXPLOSIVE BUBBLES OF THE EARLY 2000s
This chapter starts with Internet crash that wiped out $8 trillions in market value quickly substituted by housing bubble that duly crashed in late 2000s. All this history of bubbles makes a great illustration of irrationality of market in the short run, while its efficiency on the long run. But the core lesson is that it is unpredictable at any given moment so if an investor reasonably shorts a crazy growing stock of company that is bound to crash, he still stands a good chance to loose money because it did not crash fast enough.

PART Two: HOW THE PROS PLAY THE BIGGEST GAME IN TOWN
This part reviews more in details how professionals divided into two main groups –technicians and fundamentalists play the game.
5. TECHNICAL AND FUNDAMENTAL ANALYSIS
Definitions and examples provided for technical analysts who do not care about companies’ business, but mainly about their securities movements trying to find pattern to predict future movements; and fundamentalists who are not that much concerned with charts of previous movements and patters, but trying to predict future movements based on parameters of company business and markets it is in. The experience shows that both methods do not work reliably so author comes up with quite reasonable rules:
1. Buy only companies that expected to have 5+ years of more then average growth.
2. Never pay more for the stock then its firm foundation of value
3. Looks for the stock with good stories so investors would build castle in the air for them.
6. TECHNICAL ANALYSIS AND THE RANDOM-WALK THEORY
It is the review of technical analysis that leads to conclusion that it basically useless.
7. HOW GOOD IS FUNDAMENTAL ANALYSIS?
The functional analysis fares a bit better but not that much. There are 5 different reasons why fundamental analysis mostly fails.

Overall conclusion for Part Two is that the best way is the middle of the road – analyze market trying to find the bigger fool, the guy who buy your stock when market going to crash and you getting out and sell you stock when market is at the bottom and about to go up. One does not need to know when exactly top a bottom going to happen. It is good enough to figure it out before the other guy.
Part Three: THE NEW ~ TECHNOLOGY
8. A NEW WALKING SHOE: MODERN PORTFOLIO THEORY
This theory mathematically links risk level / direction and price of securities in such manner as to achieve optimum combination of risk and returns with stress on diversification.
9. REAPING REWARD BY INCREASING RISK
This is a similar exercise with stress on risk control. Represented by Capital Assets Pricing Model (CAPM). This thing produce some Nobel prizes, but pretty much failed in reality.
10. BEHAVIORAL FINANCE
This one is not really theory, but rather result of research of human behavior of identifying and formalizing all irrationalities that human action prone to. This chapter provides quite good list of specific behaviors to avoid.

11. POTSHOTS AT THE EFFICIENT-MARKET THEORY AND WHY MISS
This is a list of critics of efficient market theory. Funny, but can be easily refuted by stress of weakness of efficient market and real life data of professional investors dismal results.

Part Four: A PRACTICAL GUIDE FOR RANDOM WALKERS AND OTHER INVESTORS
12. A FITNESS MANUAL FOR RANDOM WALKERS
13. HANDICAPPING THE FINANCIAL RACE: A PRIMER IN UNDERSTANDING AND PROJECTING RETURNS FROM STOCKS AND BONDS
14. A LIFE-CYCLE GUIDE TO INVESTING
15. THREE GIANT STEPS DOWN WALL STREET
The whole Part Four is detailed investment advice that could be very useful for novices.
MY TAKE ON IT:
I am pretty much in agreement with very weak form of efficient market. I would only add a lot more of behavior analysis and I definitely do not trust all mathematical models because of my education and lifetime experience in computer science. This experience tells me that level of simplification unavoidable in models could not possibly represent reality with enough precision necessary for effective investment.