Random Walk Theory
Random Walk Theory
Random Walk Theory
n predicting what stocks to pull out of the market and which stocks
the stocks w
ith the upward revision to leave in. Martin Weber s studies detract from the rando
m walk hypothesis, because according to Weber, there are trends and other tips t
o predicting the stock market.
Professors Andrew W. Lo and Archie Craig MacKinlay, professors of Finance at the
MIT Sloan School of Management and the University of Pennsylvania, respectively
, have also presented evidence that they believe shows the random walk hypothesi
s to be wrong. Their book A Non-Random Walk Down Wall Street, presents a number
of tests and studies that reportedly support the view that there are trends in t
he stock market and that the stock market is somewhat predictable.