Random walk hypothesis

The random walk hypothesis is a financial theory. It says that stock market prices change according to a random walk, Price changes are random and cannot be predicted.
The concept can be traced to French broker Jules Regnault who published a book in 1863. It can also be traced to French mathematician Louis Bachelier. His Ph.D. dissertation, "The Theory of Speculation" (1900), had comments on the subject. The same ideas were later worked on by MIT Sloan School of Management professor Paul Cootner in his 1964 book "The Random Character of Stock Market Prices". The term was was made popular by the 1973 book, "A Random Walk Down Wall Street", by Burton Malkiel. It was used earlier in Eugene Fama's 1965 article "Random Walks In Stock Market Prices", which was a less technical version of his Ph.D. thesis. The theory that stock prices move randomly was earlier said by Maurice Kendall in his 1953 paper, "The Analysis of Economic Time Series, Part 1: Prices".
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Consumption, by Robert E. Hall