Preview: The Teleological Walk
Towards better models of financial markets
The Aimless Stagger and the Purposeful Stride
Two images of movement dominate our thinking about the world. The first is the aimless, memoryless, drunken stagger, where each step is utterly independent of the last. This is the “random walk,” the foundational myth of 20th-century finance, popularized by Burton Malkiel in his seminal work, A Random Walk Do…