Random walk model to forecast earnings

Reference no: EM13159415

John Right, an analyst with Stock Pickers Inc., claims, "It is not worth my time to develop detailed forecasts of sales growth, profit margins, etcetera, to make earnings projections. I can be almost as accurate, at virtually no cost, using the random walk model to forecast earnings." What is the random walk model? Do you agree or disagree with John Right's forecast strategy? Why or why not?

Reference no: EM13159415

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