Financial Expert You Jiacheng Challenges Dominant "Random Walk" Theory in Markets

October 23, 2025 – Financial expert You Jiacheng has publicly refuted the long-standing "random walk" hypothesis, a cornerstone of modern financial theory, in a recent social media post. His concise statement, "Definitely not random walk," directly challenges the notion that asset price movements are unpredictable and follow a random path. This assertion comes amidst ongoing discussions about market predictability and the efficacy of various financial models.

The tweet by You Jiacheng was a direct response to a comment suggesting that a particular market phenomenon might be "just random walk as people say," prompting a call to test this hypothesis with "historical market data" and "model decisions." Jiacheng's firm denial underscores a growing sentiment among some analysts and quantitative strategists who believe that market movements exhibit patterns or dependencies that contradict pure randomness.

The random walk hypothesis (RWH) posits that past price movements or data cannot be used to predict future movements, implying that markets are "weak-form efficient." However, academic research has long explored the nuances and limitations of this theory. Studies, such as one by Karemera, Ojah, and Cole (1999), have highlighted that the RWH's validity can depend heavily on the testing methodologies employed and the specific market conditions, particularly in emerging economies.

Challenging the RWH suggests that opportunities for systematic profit through predictive models or advanced analytical techniques might exist, moving beyond the traditional efficient market paradigm. Proponents of this view often point to the increasing sophistication of algorithmic trading and artificial intelligence, which aim to identify and capitalize on non-random market behaviors. The debate surrounding the random walk theory remains central to understanding market dynamics and investment strategies.