Cootner concludes that the stock market is not a random walk.

The argument presents a false dichotomy, an "either-or" that is not necessary. Random walk is a possible answer to the more general question of why few people do well at investing but hardly a necessary one. Impulsive herding behavior would explain why most people do not perform brilliantly in financial markets. It also happens to be the actual reason.

Malkiel first publishes the classic A Random Walk Down Wall Street.

This does not mean that movements inthose prices are random in the sense of being without purpose.

The Random Character of Stock Market Prices,pp.

If professionals are operating under false premises, the patterns they perceive would be inconstant and therefore inadequate for reliable forecasting. In this case, their failures would not prove randomness, but epistemological error.

, The Random Character of Stock Market Prices, P.

As the Wave Principle reveals, the overall pattern of stock price movement is nonrandom and indeed so formally constructed that price fluctuation cannot (as argued in Chapter 18) be the result of reasoned decisions by well-informed individuals dealing continually with new information, as is commonly assumed.

For a random-walk--drift, the forecast standard error is the of the period-to-period changes.

Random Walk Theory | Efficient Market Hypothesis

(3) To demand that professional investors beat a bull market is to create a negative-sum game and then insist that the majority win at it. Every manager has to have some cash, and every manager pays commissions. By definition, it is impossible for the majority to beat a bull market. Even random walkers must reject this cute ruse. It is quite certain that if we were to isolate a bear market period in which many money managers beat the market simply because many of them held some cash, random walk proponents would not then declare such performance as evidence against their model.

This is the so-called random-walk-without-drift model: ..

WHAT IS SPREAD BETTING? Spread betting on financial products is a way investors and gamblers can speculate on the movements of a wide range of financial products not usually available to people outside major financial institutions. EXPERTISE...

Random walk theory - SlideShare

A champion of random walk, still plying his axioms in the very latest issue of Bloomberg's Personal Finance magazine, uses this common argument in favor of market randomness:

Hacking the Random Walk Hypothesis - Turing Finance

Because the variance of a sum of independentrandom variables is the sum of the variances, it follows that the variance ofthe k-step-ahead forecast error is larger than that of the one-period-aheadforecast by a factor of k.

The Random Walk and the Efficient Market Hypotheses

(5) Nonrandomness hardly means that earning excess returns should be "that easy." This is a blanket substitution of one idea for another. Chapter 8 explains why it is anything but easy.

Random walk hypothesis - Simple English Wikipedia, …

(4) Beating the market is a false standard. To be consistent, random walkers should also insist that portfolio managers beat the market on the short side in bear markets. After all, market prices are simply ratios, making direction irrelevant. Carried to its extreme, their benchmark demands no less than constant outperformance in every market fluctuation, which is absurd. The only valid question is whether a manager makes enough money to make investing with him a good idea relative to what you would do as an individual.