Give a monkey enough darts and they'll beat the market. So says a draft article by Research Affiliates highlighting the simulated results of 100 monkeys throwing darts at the stock pages in a newspaper. The average monkey outperformed the index by an average of 1.7 percent per year since 1964. That's a lot of bananas!

What is all this monkey business? It started in 1973 when Princeton University professor Burton Malkiel claimed in his bestselling book, A Random Walk Down Wall Street, that "A blindfolded monkey throwing darts at a newspaper's financial pages could select a portfolio that would do just as well as one carefully selected by experts."

To test their idea, the writers threw darts at a stock list in the newspaper. From those random hits they built a portfolio to stack up against highflying financial elites.

Those elites meet at the Sohn Investment Conference, held each May in New York. The attendees are full-time active investors, people who spend 365 days and nights a year thinking hard about what investments to own and why.

So how did the dart-throwing journalists do this year? "The results were brutal," recounts Spencer Jakab of the Journal.

The random writer picks beat the pros by 27 percentage points in the year through April 22. "Only 3 of 12 of the Sohn picks even outperformed the S&P 500 SPX, +1.00%," Jakab said.

Random walk theory suggests that changes in stock prices have the same distribution and are independent of each other. Therefore, it assumes the past movement or trend of a stock price or market cannot be used to predict its future movement. In short, random walk theory proclaims that stocks take a random and unpredictable path that makes all methods of predicting stock prices futile in the long run.

but these data can help us make better predictions.
Predictions backed up by relevant data are way better than predictions without any basis. hmmmm