Are Changes in Stock Prices Random? Can we really tell? - Many psychologists and statisticians believe that most people want to see patterns even when faced with pure randomness. People claiming to see patterns in stock price movements are probably seeing optical illusions. -A matter of degree - Even if we can spot patterns,we need to have returns that beat our transactions costs. Random stock price changes support weak- form efficiency. 2121 Are Changes in Stock Prices Random? Are Changes in Stock Prices Random? ƒ Can we really tell? – Many psychologists and statisticians believe that most people want to see patterns even when faced with pure randomness. – People claiming to see patterns in stock price movements are probably seeing optical illusions. ƒ A matter of degree – Even if we can spot patterns, we need to have returns that beat our transactions costs. ƒ Random stock price changes support weak￾form efficiency