There are many people believe that the events are correlated with each other, which come in a cluster and streak even if the streak appears in random data like coin tosses. The random walks theory depicted that the entire methods of anticipating security price are useless in the end. According to Malkiel (2016), the perception of intrinsic value is undependable as it depends on the subjective estimation of the future earnings of the stock market. In this matter, he suggests using the factor like expected dividend pay-out, expected growth rate, estimated risk along with the interest rate, which support in assuming the intrinsic value of the security (Semenov, 2014).
According to the random walk theory, the technical analysis is undependable as the Chartist used to buy only the after price trends, which are established with the sell after the selling price trends are broken down. Importantly, the chartists use to buy or sell too late and fail to spot the boat. As per the theory, this occurs as the stock price replicates the information and the technical analyst moves on the stock. As per Malkiel (2016), the wide usages of technical analysis decrease the benefits of the approach.
Furthermore, according to Malkiel (2016), the fundamental analysis is imperfection, and the reason is the analyst often gathers information which is bad, worthless or incorrect interpretation of that information. It leads to the bad prediction of the stock value. Therefore, the analyst often predicts wrongly about the future price of the security. The exterior factors of an organization or the relevant industry may influence badly on the stock price, which makes the fundamental analysis inappropriate and irrelevant.