|  SEP 1984

Is The Stock Market Random? by Bill Dunbar

Is The Stock Market Random? by Bill Dunbar Professor Aikinheit of the Economics Department strokes the bottom of his mustache up out of the way, tips his martini glass and drains the last precious drops. ""Have another?"" Joe Grubber licks his upper lip and belches, ""Yeah!"" The professor leans forward with fervent intensity. ""As I was saying, you take this drunk and turn him loose in the middle of a football field, right on the fifty yard line, see, then watch him stagger around. As he lurches this way and that it's a good imitation of stock prices. If he staggers toward the east goal it's a gain, if he staggers west it's a loss, and if he stumbles toward the sidelines it's zero. It's called the Random Walk Hypothesis."" ""That means I'll do better in the stock market if I stay drunk all the time."" ""No it doesn't. It doesn't mean any such thing."" Joe holds his cocktail glass up to the light and peers into its limpid soul as if expecting a revelation of some ancient wisdom. ""Well, what the hell does it mean?""

by Bill Dunbar