"Turning back is how the way moves." ~ Lau Tzu
Investors and traders often argue as to whether stock price movement is random or not: The prior camp believes price movement is unpredictable, and thus a passive, buy-and-hold investment strategy is prudent; and the latter believes price movement is predictable, and thus an active trading strategy is prudent.
Volumes of books have been written and millions of pixels have been posted to the Internet arguing, often quite convincingly, both for and against the idea of randomness as it pertains to investing.
In true philosopher fashion, I will not explicitly tell you which side you should choose; but rather I will share a story first, and make a few points afterward:
This is from Eckhardt Tolle's book, A New Earth: Awakening to Your Life's Purpose :
The interconnectedness of all things and events implies that the mental labels of 'good' and 'bad' are ultimately illusory. They always imply a limited perspective and so are true relatively and temporarily.
This is illustrated in the story of a wise man who won an expensive car in a lottery. His family and friends were happy for him and came to celebrate. 'Isn't it great!' they said. 'You are so lucky.' The man smiled and said, 'Maybe.'
For a few weeks he enjoyed driving the car. Then one day a drunken driver crashed into his new car at an intersection and he ended up in the hospital, with multiple injuries. His family and friends came to see him and said, 'That was really unfortunate.' Again the man smiled and said, 'Maybe.' While he was still in the hospital, one night there was a landslide and his house fell into the sea. Again his friends came the next day and said, 'Weren't you lucky to have been here in the hospital.' Again he said, 'Maybe.'
The wise man's 'maybe' signifies a refusal to judge anything that happens. Instead of judging what is, he accepts it and so enters into conscious alignment with the higher order. He knows that often it is impossible for the mind to understand what place or purpose a seemingly random event has in the tapestry of the whole. But there are no random events, nor are there events or things that exist by and for themselves, in isolation.
This story of the wise man is a modern version of an old Taoist lesson on fu, which is a Chinese word for return; a principle stating that all extremes return to a state of equilibrium or balance with their opposites.
The perpetual argument between investor and trader as to whether or not stock prices are random, in my humble opinion, makes most arguments on both sides wrong; or, at a minimum, only partially right.
In the short-term, the movement of stock prices appears random ("good luck" or "bad luck" in isolation), primarily because precise and consistent predictability is nearly (or apparently) impossible. Over time, however, stock prices will return to equilibrium or, in investor jargon, "revert to the mean."
Dogmatically stating that stock price movement is either random or not random can be dangerous. Randomness, or chaos, is part of the natural order of things, which paradoxically makes the big picture of nature (and the stock market) non-random -- predictable chaos, if you will.
Price fluctuations in the short-term and price reversion over time makes success possible for either a passive or active (or combined) investing strategy. This explains why there are many examples of investors and traders demonstrating their success at adhering to the ideas of either randomness or non-randomness in their investing and trading strategies. Both can be "right." It is only in poor application that one or the other can be wrong.