The classical theorists resemble Euclidean geometers in a non-Euclidean world who, discovering that in experience straight lines apparently parallel … - Benoit Mandelbrot

"First, price changes are not independent of each other. Research over the past few decades, by me and then by others, shows that many financial price series have a "memory," of sorts. Today does, in fact, influence tomorrow. If prices take a big leap up or down now, there is a measurably greater likelihood that they will move just as violently the next day. It is not a well-behaved, predictable pattern of the kind economists prefer-not, say, the periodic up-and-down procession from boom to bust with which textbooks trace the standard business cycle. Examples of such simple patterns, periodic correlations between prices past and present, have long been observed in markets-in, say, the seasonal fluctuations of wheat futures prices as the harvest matures, or the daily and weekly trends of foreign exchange volume as the trading day moves across the globe."

"Why is geometry often described as ""cold" and ""dry?" One reason lies in its inability to describe the shape of a cloud, a mountain, a coastline, or a tree. Clouds are not spheres, mountains are not cones, coastlines are not circles, and bark is not smooth, nor does lightning travel in a straight line."

Just the opposite appears to happen in the medium term, three to eight years. A stock that was rising over one multi-year stretch has slightly greater odds of falling in the next. A 1988 study by Fama and another economist, Kenneth R. French, documented this. They looked back over the price records of hundreds of stocks and grouped them into portfolios based on their size. They found that about 10 percent of a stock's performance in one eight-year period-that is, there was a small but measurable tendency for a stock doing well in one decade to do poorly in the next. The effect was weaker, but still statistically significant, at shorter time-scales of three to five years. Others have corroborated such findings.