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Market prices follow a random walk from "summary" of A Random Walk Down Wall Street by Burton Gordon Malkiel
The idea that market prices follow a random walk may seem counterintuitive to many investors. After all, we like to believe that there is some rhyme or reason behind the movements of stock prices. We want to think that we can predict where the market is headed and make profitable trades based on our analysis. However, the reality is that trying to predict the future movements of stock prices is a futile exercise. As Burton Gordon Malkiel explains in his book "A Random Walk Down Wall Street," market prices are influenced by an almost countless number of factors, many of which are unpredictable and random in nature. Malkiel argues that attempting to outsmart the market by picking individual stocks or timing the market is a fool's errand. The efficient market hypothesis suggests that all avail...
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