![]() ![]() Malkiel describes the analyst’s reaction: Malkiel even showed one to a “chartist,” an investor who picks stocks solely by analyzing stock market charts under the assumption that certain patterns repeat themselves. Each day, the stocks either gained or lost fifty cents in value depending on the coin flip.Īs the class soon realized, their stocks’ “investment history” looked realistic. In his Princeton class, economics Professor Burton Malkiel once had his students create charts of fictional stocks by flipping a coin. ![]() Taken to its logical extreme, it means that a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts. It is an epithet coined by the academic world and hurled insultingly at the professional soothsayers. On Wall Street, the term “random walk” is an obscenity. To get occasional notifications when we write blog posts, sign up for our email list.”> Follow him on Twitter here or Google Plus. ![]()
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