a chunk of Wall Street prices your stocks with one model - a drunk stumbling across a field.
filmed at MIT. the math hasn't moved.
Prof John Guttag walks through it live, in code.
a drunk with no memory of his last step drifts only √n from the start - 10,000 steps out, he's about 100 away. motion without progress.
"the movement of prices in the stock market is best modeled as a random walk." no edge, and that's you: lots of trades, almost no ground.
add the smallest bias and distance stops crawling as √n - it grows in a straight line. the edge was never speed. it was direction.
a chunk of Wall Street prices your stocks with one model - a drunk stumbling across a field.
filmed at MIT. the math hasn't moved.
Prof John Guttag walks through it live, in code.
a drunk with no memory of his last step drifts only √n from the start - 10,000 steps out, he's about 100 away. motion without progress.
"the movement of prices in the stock market is best modeled as a random walk." no edge, and that's you: lots of trades, almost no ground.
add the smallest bias and distance stops crawling as √n - it grows in a straight line. the edge was never speed. it was direction.