Random Walk Theory

[Profitaker]

Strange, I thought a transaction can only occur when individuals AGREE on a price to exchange. If the market is as unpredictable as you imply, why should there be any disagreement on price? Both are making an exchange at a price they agree is fair. The difference is that one thinks it is cheap at the current price and the other thinks it is expensive.

Perhaps I should have used the word value as opposed to price, so I will concede your point on semantics.

Let me try another angle. If everybody in the world agreed that Vodaphone shares were worth £ 1.71, do you think the price would change on Monday ?

 

[new_trader]

Perhaps I should have used the word value as opposed to price, so I will concede your point on semantics.

Let me try another angle. If everybody in the world agreed that Vodaphone shares were worth £ 1.71, do you think the price would change on Monday ?

Yes.

 

[Profitaker]

Yes.

Fascinating.