Lately, the idea of randomness in stock prices has come under attack; prices for individual stocks (but not the market on the whole) often show small momentum effects: stocks that go up tend to keep going up, and stocks that are going down tend to keep going down. But the metaphor of a coin flip for randomness remains unquestioned. We use coin tosses to settle disputes and decide outcomes because we believe they are unbiased, with 50-50 odds.
Yet recent research into coin flips has discovered that the laws of mechanics determine the outcome of coin tosses: The startling finding is that they aren’t random. Instead, for natural flips, the chance of a coin landing in the same position as it started is about 51 percent. Heads facing up predicts heads; tails predicts tails.