![]() ![]() ![]() One of the first to recognize the potential information content of stock prices was John Burr Williams (1938) in his work on intrinsic value, which argues that stock prices are based on economic fundamentals. Unfortunately, Bachelier’s work was largely ignored outside mathematics until the 1950s. ![]() This remarkable work documents statistical independence in stock returns-meaning that today’s return signals nothing about the sign or magnitude of tomorrow’s return-and this led him to model stock returns as a random walk, in anticipation of the EMT. French mathematician Louis Bachelier performed the first rigorous analysis of stock market returns in his 1900 dissertation.
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